Australian researchers are forced to close a promising clinical trial using the drug ketamine to treat depression as they struggle for funding.

Their struggle to attract funding intensified after an unrelated chain of commercial ketamine clinics was shut down amid a health watchdog investigation into dodgy prescribing practices.

Ketamine is a sedative and a painkiller which can have hallucinogenic side effects.

It also circulates on the black market as a party drug but has shown remarkable short-term results in treatment-resistant depression.

University of New South Wales psychiatrists say they are receiving huge volumes of calls for help from distraught patients but do not have the money to continue their work.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 4 minutes 42 seconds 4 m 42 s Depression researchers call for ketamine funding ( Elise Worthington ) Download 8.6 MB

Colleen, a 67-year-old grandmother, has struggled with depression since the early 1980s.

"It's like the colour has just gone out of your world and your feelings," she said.

"It's just there but you're not operating within the world as a normal person, it's more like you're observing and you can't access it, it's just happening.

"I didn't want to do anything. The things that I had enjoyed - gardening, doing puzzles and things like that - I really just couldn't get interested in them."

As a last resort, Colleen enrolled in a clinical trial using ketamine injections that was being run by the UNSW and the Black Dog Institute.

"After the second last one my mood did start to lift and after the last one I had quite a noticeable improvement in my mood, so yes it has helped tremendously," she said.

Most patients completely well after seven days: doctor

Colleen is one of the many participants who noticed surprising results according to researcher Duncan George.

"I would describe the results that I've seen as extraordinary," Dr George said.

"The patients who have come to us and have been enrolled in the study have, on average, tried over five antidepressant medications before and the vast majority of them have shown substantial improvements, most of them becoming completely well seven days after an injection."

Ketamine was developed as anaesthetic and is used by vets as a horse tranquiliser, but in recent years it has also been abused as a party drug.

Psychiatric researchers found it also caused rapid improvement in what was known as treatment-resistant depression.

Professor of psychiatry Colleen Loo is from the UNSW.

"We've made some really important findings from this research, which are world firsts," she said.

"The first one is that we trialled giving ketamine by quite a simple method, a simple injection under the skin, and we found that it worked just as well as the much more complicated methods used overseas."

Professor Loo said the complicated structure of clinical trials using ketamine in titrated doses also made attracting grants hard.

"The individual approach doesn't lead to neat statistics for example which is what you need for research, so it's a bit of a tension I guess for trying to develop a really clinical useful way of using ketamine and developing trials that get funded by grant schemes."

Aura Medical probe 'bad timing' as researchers seek funding

While ketamine is not approved for clinical use, one Australian company began selling injections of the drug for around $150 an injection to depressed patients last year.

Ketamine is a schedule 8 restricted drug.

The Aura Medical chain of clinics is under investigation by the health watchdog for giving out vials to patients to inject at home and was shut down last month.

Professor Loo said she hoped the negative publicity would not taint legitimate trials.

"So the timing has been bad because the Aura Medical Clinic, which was giving ketamine clinically on a fee-for basis kind of commercial context, has had to stop and so I've had a lot of frantic emails and phone calls," she said.

"But it has left the public in a sense in the lurch with this kind of gap where at the moment in New South Wales and in much of Australia there is no way of receiving ketamine treatment if you're depressed."

Dr George from UNSW said researchers had struggled to respond to desperate calls from patients.

"And so they often ring up and say to us that they feel desperate, that they feel this is their last chance to get better and they put a lot of faith and hope into it and so it's really crushing to them when they're told they have to be on a waiting list because we've had to close off new recruitments," he said.

"And we can't actually tell them with any certainty when they might be able to begin the study, simply because of a lack of funding."

Drug companies unlikely to invest in ketamine: doctor

Efforts to secure ongoing funding for the ketamine trial from the National Health and Medical Research Council in Australia have been rejected numerous times.

Ketamine has been on the market for decades and Dr George says he believes that is another reason grant money is difficult to access.

"Ketamine is already off-patent and so the drug companies don't feel that they're likely to be able to make a lot of money from it unless they can somehow tweak it and bring it out in another form," he said.

"Most of the research has been done by universities, which of course don't have access to as much money as the big pharmaceutical companies."

Former trial patient Colleen said she wanted to see Ketamine made available to those who really needed it.

"I know it can be very dangerous and it's used as a party drug if it can somehow be controlled and those doses are all you can get, then yes, I do think it should be made much more widely available," she said.

Those wanting more information can contact the UNSW or the Black Dog Institute.