A lot of original psych drugs were also discovered by accident, intending to address some other medical issue. For example MAOIs were found to have antidepressant effects during a trial to use them for tuberculosis. Development of SSRIs (e.g. Prozac) then came from trying to create a similar drug with less side effects.
Also, the many dead ends thing is true in general for pharma, but at some point there are too many dead ends for it to be profitable even given their bankroll. This is happening a lot lately with neuro-related drug development. In the last 10 years I know Amgen, Pfizer, Novartis, Eli Lilly have all had shut downs/lay offs in their neuroscience research divisions.
Also, the many dead ends thing is true in general for pharma, but at some point there are too many dead ends for it to be profitable even given their bankroll. This is happening a lot lately with neuro-related drug development. In the last 10 years I know Amgen, Pfizer, Novartis, Eli Lilly have all had shut downs/lay offs in their neuroscience research divisions.