Psychedelic drugs are poised to lead a healthcare revolution that will address the global Mental Health Crisis that already afflicts roughly 1 in every six people. Globally, that translates to approximately 1 billion potential consumers of psychedelic drugs.
According to the National Institute of Mental Health data, over 17 million Americans experience at least one "major depressive episode" each year.
Psychedelics such as MDMA, Ketamine, Psilocybin, and Ayahuasca (DMT) have long been researched to be used to treat depression and mood disorders. However, they became outlawed in the U.S. in the 1960s after being linked to the "hippie culture. They were later classified under the "controlled substances act." Like cannabis, most of these compounds have suffered the injustices of the failed "war on drugs."
Almost half a century and the U.S. lawmakers are reconsidering their hard stance on psychedelics, especially for medicinal use. In November 2020, Oregon became the first state to decriminalize psilocybin (magic mushrooms) and legalize it for therapeutic use.
Currently, researchers are looking into the therapeutic potential of psychedelics in managing treatment-resistant depression.
One randomized clinical trial found that "psilocybin-assisted therapy is effective in producing large, rapid, and sustained antidepressant effects in patients with major depressive disorder."
Consequently, psilocybin-assisted therapy for major depressive disorders is attracting the attention of many pharmaceuticals. And as alluded to earlier, the potential of this market is close to infinite.
To that end, we have compiled a list of the top companies making waves in the medicinal psychedelic space.
1. Compass Pathways (NASDAQ: C.M.P.S.)
This company is developing a synthetic, psilocybin-like compound called COMP360 that will be used to treat severe depression. Preliminary investigations to date demonstrate that psilocybin is effective in alleviating depressive symptoms. By the close of the year, the company hopes to release the findings of a phase 2 study spearheading.
Compared to its peers, this company is leading in research. COMP360 will likely get from five to 11 years of market exclusivity within the U.S. and E.U if they get approval.
Despite the stock depreciating by 10% in the last year, they still have a broad trading range on average of $30 to $60 per share. They will likely be able to leverage their intellectual property exclusively and be able to monetize it.
For these reasons, we consider this an excellent psychedelic stock to invest in for the long haul.
2. Mind Medicine (NASDAQ: M.N.M.D.)
The study, which commences in Q4 2021, compares the effects of 20 micrograms of L.S.D. to placebo. The company will also include L.S.D. Neutralizers to abort hallucinogenic effects if the participants experienced adverse events.
The company has also partnered with the University Hospitals of Basel to create L.S.D. Therapies for different indications such as treating cluster headaches. They are also running a series of clinical trials on psychedelic use in the early stages.
MindMed, which Bruce Linton of Canopy Growth backs, has raised $240 million from investors. We consider this a good stock to invest in because the company has spread its risk by broad exposure to various indications.
3. Cybin's (O.T.C.:CLXP.F)
Cybin's is known for developing a psilocybin extract delivered via a sublingual film currently under investigation to manage treatment-resistant depression. They are preparing for a placebo-controlled phase 2 study bound to start later this year and last approximately 12 months.
They have also partnered with Kernel (a neurotechnology company) to describe psychedelic experiences in real-time. The information generated from this study will provide deep insight into how psychedelics address neurological disorders.
So far, the company has managed to raise over 88 million Canadian dollars from investors. Their current market cap stands at $308 million (U.S.U.S.). We consider this a good stock to invest in because of the moment that the company has demonstrated.
4. Field Trip Health (F.T.R.P.F.)
Field Trip Health is known for developing a synthetic psilocybin molecule (FT-104) with a similar potency to psilocybin. However, FT-104 has a shorter psychoactivity activity period which makes it preferable for most patients.
In February this year, the company opened a new psychedelic facility in Fungi in Mona, Jamaica. This is the world's premier legal psychedelic research facility.
The Field Trip Stock was listed on the Nasdaq exchange in June this year. Given the company's solid fundamentals, we consider this a good stock for long-term investment.
5. Numinous Wellness (L.K.Y.S.F.)
Numinous Wellness has earned a reputation for becoming the first public company in Canada to be awarded a cultivation license to produce and extract psilocybin. Together with this, they also have exclusive rights to import, export, and distribute D.M.T., psilocybin, and other psychedelic drugs.
Numinous is committed to psychedelics-focused research and has been leading psychedelic research since 2012. They have also partnered with MAPS Public Benefit Corp to conduct clinical trials investigating MDMA for relieving post-traumatic stress disorder and psilocybin to address substance-use conditions.
In April, they launched phase 1 clinical trials to provide helpful information comparing the potential benefits of natural psilocybin to synthetic versions. Numinous is also involved in third-party cannabis testing. We love their diversification and thus think that they are an excellent company to invest in.
With the whole-fledged mental health crisis, there is immense opportunity in psychedelic drug development. And as psychedelic Drug R&D continues to advance, more investors are likely to troop into the scene, making the market very competitive.
The stocks mentioned above show a lot of promise for long-term investment; their fundamentals are correct. However, the stock market is rarely predictable.
If you want to invest in psychedelic stocks, closely monitoring the above well-capitalized stocks would be advisable. As it is said, only invest money that you are ready to lose.