MDMA and psilocybin manufactured for therapeutic use in Australia

For decades, MDMA, also known as ecstasy or molly, has been traded underground and illegally ingested in the shadows of parties and nightclubs.

It is a hard drug known for its euphoric high, and side effects can be fatal.

Possessing or selling the drug can lead to jail time.

But at a manufacturing hub in Brisbane, MDMA is being packed into capsules for hospitals and clinics across the country.

It isn't the only drug processed at the lab.

Bags of mushrooms will be weighed before the active ingredient inside, known as psilocybin, is extracted.

On the black market they are known as magic mushrooms and are sold for their hallucinogenic effects.

But in this facility, they have a therapeutic use.

The business manufacturing these drugs is Breathe Life Sciences, granted one of the highly regulated licences to work with these drugs in Australia.

For the first time, the ABC can take you behind the scenes of its production line, inside the vaults, and all the way to the patients in therapy.

Australia rides wave of psychedelic medicine

It was just over two years ago when chief executive Sam Watson said his company was given the green light to start manufacturing both MDMA and psilocybin.

Up until this point, Breathe Life Sciences was focused solely on medicinal cannabis.

But in 2023, Australia changed its laws, becoming the first country to allow authorised psychiatrists to prescribe MDMA for post-traumatic stress disorder (PTSD) and psilocybin for treatment-resistant depression.

"For us and for any business trying to operate in this space, it's obviously a challenge," Mr Watson says.

"It took us a long time and it took us a lot of investment and it took us a lot of expertise to get to where we are."

The facility houses four major vaults that store millions of dollars' worth of pharmaceutical drugs.

Mr Watson says more than 3 million products are manufactured each year for more than 300 clients.

MDMA and psilocybin require a "more controlled" environment and are stored in a separate, smaller vault, which can only be accessed by select staff.

Some of the drugs are grown in Australia, while others arrive from overseas, but all go through rigorous testing.

"Before we buy it, bring it into our site, it's tested. When it arrives to our site, it's tested in its raw form. When it goes into a finished product, it's then tested again," Mr Watson says.

One patient's life-saving experience

Jess Yugovich underwent MDMA-assisted psychotherapy in November last year, after being diagnosed with PTSD.

In 2024, the Perth mother tragically and unexpectedly lost her three-year-old daughter.

"I just went downhill really quickly and nothing seemed to, nothing seemed to help," she says.

It was then her psychologist suggested exploring MDMA-assisted therapy.

"I was a bit hesitant. I was like, I don't know what MDMA is going to do to help fix the situation that I'm in but I guess I'll give it a go, I've got nothing to lose at this point."

The therapy involved three dosing days spread across a few weeks, where the drug was taken orally in the morning.

Once it was working in her system, Jess spent the next 6 hours working with her therapist.

"The actual experience was nothing like I thought it was going to be," she recalls.

"It was almost like having a bird's eye view of my entire life.

"It was like being able to step out of the actual situation and view it from the outside to see every part of what's actually going on."

She says since losing her daughter, it was the first time she let herself feel her emotions.

"I was able to revisit my traumas in a way that actually allowed me to process them for the first time ever," she says.

"Up until the first session, I genuinely felt like my feelings and emotions were going to kill me if I allowed myself to feel them.

"But they didn't kill me, I'm still here, and I was able to connect with myself in a way that I haven't ever been able to do my entire life."

The chemical release from the MDMA meant Jess could enter a different state of being.

But she emphasises the therapy aspect was just as important as the drug.

"It's not a magic pill … you need to put in the work before, during, and after," she says.

"It didn't resolve all my trauma, it didn't take it away, but it allowed me to process it, it allowed me to revisit it and learn to be able to live with it."

Hope, but caution, from experts

As it stands, MDMA and psylocibin make up about 1 to 2 per cent of sales at Breathe Life Sciences.

One of those sales is to the Empax Centre in Perth, where Jess Yugovich's treatment took place.

It is one of the few clinics across the country that offer the psychedelic-assisted therapies.

The treatment was first offered at the centre in October 2023 and since then, more than 80 patients have been treated with MDMA-assisted therapy, and about 10 patients with psilocybin therapy.

A Therapeutic Goods Administration (TGA) spokesperson says 40 psychiatrists hold both MDMA and psilocybin approvals outside of clinical trials.

Across the country, about 164 patients have received MDMA-assisted therapy and 74 patients psilocybin therapy outside of clinical trials.

While some studies indicate there is no evidence that psychedelic therapy is effective at treating mental health conditions, others in the industry believe it's a breakthrough.

"You've got these medicines that seem to do something quite special in terms of the way they open up brain networks or open up mental rooms, you might say, metaphorically," psychiatrist Jon Laugharne says.

He is the medical director at the Empax Centre and says the treatments are unconventional.

"People can start experiencing things in their lives and experiencing things in new ways, but taking very fresh perspectives on very important things that they're stuck with."

Trauma therapist Danielle Desforges says that's because the brain has fundamentally changed once the MDMA enters a patient's system.

"The MDMA turns down the amygdala, which is the part of the brain which sets off your fight–flight system and that's often triggered really easily with PTSD."

"When that's turned off then people are actually able to think about and consider and look at material that's normally really painful or frightening or really difficult to look at."

She says she's seen the impact firsthand.

"I've had clients who've had trauma all of their lives and have not been able to shift the trauma for years, and they've come to have MDMA-assisted therapy and it has been life-changing for them."

But it comes at a cost.

Treatments not suitable for everyone

At the Empax Centre, the MDMA treatment costs about $30,000 and the psilocybin therapy costs about $20,000.

In June last year, Medibank private became the first health insurer to fund psychotherapy as part of its $50 million mental health commitment, something Jess Yugovich accessed.

Medibank's chief medical officer and practising psychiatrist Andrew Wilson said in a statement: "For many people, the current system is not working for them and is creating more problems for our stretched health system.

"Unless treated effectively, mental ill-health is a major cause of premature death and disability."

The Department of Veterans' Affairs (DVA) is also providing veterans with access to psychedelic-assisted psychotherapy for those with severe PTSD and treatment-resistant depression, where other treatments have not worked.

And while mental health experts say early clinical results are promising, it's early days.

"The only adverse effects we've seen have been mild and self-limiting within a few hours, so I'm confident that we're not seeing any frequent severe adverse effects, but that needs to be monitored in an ongoing way, particularly as new protocols are developed," Dr Laugharne says.

Adam Guastella from the University of Sydney's Brain and Mind Institute says the treatments may not be suitable for everyone and should only occur under medical supervision.

"A smaller portion of people could experience nausea and vomiting immediately," Professor Guastella says.

"Longer term, there are reports of more significant side effects around hallucinogenic experiences that happen in a small number of people.

"We know for MDMA … having serious cardiac issues is a contraindication to receiving it."

Professor Guastella says it's important to separate the illicit drug from the drug taken in the therapy room.

"When you access them on the street they are dangerous, maybe not because of the active ingredient or maybe it's the way that it's been taken or the dose that's been taken.

"Under good regulation … it's vastly different. The amount of appropriate regulation, safety procedures placed around the therapy really reduces the risk.

"The risk isn't zero but it reduces the risk dramatically."

Early days for legal market

Despite the regulation and safety procedures, some warn it's still too early to tell what the future of this market will look like.

"New technologies, whether they're medical technologies or something else, are always super exciting, right? Because the sky is the limit," says Scott Phillips, chief investment officer at The Motley Fool.

The Motley Fool analyses publicly listed companies on the Australian share market. Breathe Life Sciences is listed on the ASX.

"What we don't know is where the end point is for the size of the market of this sort of thing," Mr Phillips says.

"If this is the next big [drug], then this is a massive, massive market. If it does flame out and remains a niche therapy … it will disappoint a whole lot of people, including investors in these companies."

Credits

Reporting: Adelaide Miller

Digital production and graphics: Eric Hao Zheng

Photography: Adelaide Miller, John Gunn, Mitchell Edgar, Julian Robins

Video: Curtis Rodda