The following article is sponsored by Mind Cure. The information contained in this article in no way represents investment advice or opinion on the part of Benzinga or its writers and is intended for informational purposes only.
Over the past decade, big pharma has largely stepped away from the research and development of psychiatric drugs. This came after what was a fruitful period for the pharmaceutical industry during the 1990s and early 2000s. This renaissance was caused largely in part to the release of Eli Lilly And Co’s (NYSE: LLY) Prozac, an antidepressant, in 1988.
This SSRI (Selective Serotonin Reuptake Inhibitor) was seen as a major development in the field of neuroscience. Although since then, many major pharmaceutical companies have either devoted fewer resources to neurological research or have cut spending altogether. The industry has seen this with companies such as Pfizer Inc. (NYSE: PFE), Amgen, Inc. (NASDAQ: AMGN), AstraZeneca plc (NASDAQ: AZN), Eli & Lily and Merck & Co., Inc. (NYSE: MRK), among others.
The difficulty to bring psychotropic drugs to market, problems with testing, and the high cost of development have all contributed to the decline in psychiatric drug programs.
But perhaps the most significant factor has been the competition from generic drugs. As generic drugs came on the market, big-name pharmaceutical companies took a substantial loss to their previous profits.
Yet, while interest from big pharma in psychiatric drugs has largely diminished, the field of neuroscience has seen recent interest from none other than Silicon Valley.
Silicon Valley Takeover
At last year’s Y Combinator demo day event, Silicon Valley made what could be considered its debut into the world of psychiatric research. Y Combinator is an annual Silicon Valley VC convention that has resulted in more than a dozen unicorns. The event is notoriously exclusive with an acceptance rate of roughly 1.5% for presenting companies.
Given the low acceptance rate, …
