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3 Psychedelic Stocks With The Highest Chance Of Successfully Bringing A Psychedelic Therapy To Market

Oct 9, 2020 • 6:52 AM EDT
5 MIN READ  •  By Michael Berger
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One of the most exciting growth stories in the biotech sector relates to the studies on psychedelic substances. The companies that focus on this vertical are working to develop treatments for mental illness. We are bullish on this opportunity due to the size of the total addressable market (TAM).

Although we have seen a significant increase in the number of companies that focus on developing psychedelic therapy, only a handful of these operators are working to bring these treatments to market through U.S. Food and Drug Administration (FDA) clinical trials.

When it comes to analyzing a company that focuses on the psychedelic therapy market, we are most interested in businesses led by a management team with experience with bringing therapies to market through FDA trials. We also prefer companies that have been able to raise capital, own valuable intellectual property, and execute on previously announced growth initiatives.

Today, we want to highlight three companies that fixate on the psychedelic therapy market. We believe these operators are some of the best positioned to be successful with the FDA clinical trial process. We think that our readers should be aware of and consider these to be more advanced opportunities.

Compass Completes IPO on the Nasdaq

Last month, United Kingdom-based Compass Pathways (CMPS) became the first psychedelic therapy company to complete an initial public offering (IPO) on the Nasdaq. The market well received the offering. We are closely following this trend.

According to data from Crunchbase, Compass has raised more than $115 million since its inception and has one of the most substantial balance sheets compared to other companies in the sector. Compass Pathways is in the process of conducting Phase 2b studies on Treatment-Resistant Depression (TRD). We are following how it can execute on this.

In 2018, Compass announced that the FDA had granted it “breakthrough therapy” status, which expedited the development process and put the company in a league of its own. In 2019, the company’s Phase 1 study with 89 participants on COMP360 (psilocybin) reportedly tolerated the treatment well.

Later this year, Compass is expected to complete the world’s most extensive Phase 2b psilocybin study (216 participants). The company is conducting a dose-ranging study in the United States, Canada, and Europe. We are excited about this opportunity. We believe that Compass represents one of the top plays on the psychedelic therapy market. We will monitor how the story continues to evolve.

Be Aware of Cybin’s Execution Story

Last month, we highlighted Canada-based Cybin Corp. as an attractive play on the psychedelic therapy market. We are favorable about the similarities that it has to Compass. From a clinical trial standpoint, Cybin is conducting a Phase 2a and 2b study on Major Depressive Disorder (MDD). We are favorable regarding the size of that market.

Before the end of the year, Cybin expects to start dosing for its first study designed to treat patients who suffer from MDD. Once the research is complete, Cybin plans to investigate the potential use of psychedelics for anxiety, addiction, ADHD, and PTSD. We are favorable on these indications and the potential that Cybin has to help people who suffer from these indications.

When comparing the MDD market’s size to the TRD market, you will notice that the market opportunity for MDD is much larger1. Cybin plans to target more markets than Compass. We are favorable on the potential value associated with the potential for Cybin to gain market share in these territories.

Cybin is laser-focused on developing novel drug formulations and investigating improved natural and synthetic psychedelic molecules that will ultimately create a broad IP portfolio. When we compare Cybin to other psychedelic therapy companies (besides Compass), we determined that it is the best positioned for long-term success. We find this aspect of the company to be note-worthy.

We are favorable on the approach that Cybin takes to the psychedelic therapy market. We believe that the strength of its strategy is a testament to the management team. Cybin has one of the most impressive management teams in the psychedelic therapy industry and considers this a core pillar for the business.

Field Trip is a Psychedelic Therapy Story to be Following

Another operator that focuses on the psychedelic therapy market that we are excited about is Field Trip. The company is taking an integrated approach to using ketamine-enhanced psychotherapies to improve mental health. We are favorable on how the story differentiates from Compass and Cybin.

The ketamine-enhanced studies Field Trip is performing are conducted at lower doses than what is used in anesthesia and in a safe setting alongside psychotherapy. The lower doses can promote better mental health by disrupting thought patterns or loops. We will monitor how the story continues to evolve.

Regarding Field Trip’s clinical trial strategy, FT-101 is the first molecule in development and is currently in pre-clinical trials. Field Trip expects to start a Phase 1 clinical trial on FT-101 in the fourth quarter of 2020. We will monitor how the management team can execute on this opportunity.

Through a personalized approach to mental wellness that blends legal psychedelic medicine, mindfulness, and self-care with psychotherapy, Field Trip has created a platform for growth. The company is building out a network of clinics to provide ketamine-enhanced psychotherapies to treat depression initially. We are favorable on the potential value associated with Field Trip’s platform for growth. We will be following this opportunity closely.

 

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4357355/).

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Pursuant to an agreement between StoneBridge Partners LLC and Cybin Corp. we have been hired for a period of 180 days beginning July 1, 2020 and ending January 1, 2021 to publicly disseminate information about (Cybin Corp.) including on the Website and other media including Facebook and Twitter. We are being paid $7,500 per month (Cybin Corp.) for or were paid “0” shares of restricted common shares. We own zero shares of (Cybin Corp.), which we purchased in the open market. We plan to sell the “ZERO” shares of (Cybin Corp.) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (Cybin Corp.) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information. StoneBridge Partners own 100 shares of Compass Pathways that we purchased in the open market.

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Authored By

Michael Berger

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