Psychedelic Stocks – November Market Newsletter

As if the biotech space hasn’t already gone crazy enough. There is a new segment of the space taking aim at Big Pharma. Where many of the difficulties they have caused to the world’s population continue today. Psychedelic medicine biotech companies have begun focusing on the body’s natural chemicals to fight some of the most common disorders. Disorders that affect large portions of the world. 

Introducing the Problem

According to the CDC, the US consumes 75% of the world’s prescription drugs. Slowly, parts of the population continue to grow weary of Big Pharma’s power. Additionally, the products they pump out in droves have caught a keen eye of the public. Number one on the Naughty List is Purdue Pharma. If you haven’t heard, they were ordered to pay $4.5 billion in settlement costs with those who held claims against them. 

Purdue Pharma still markets itself as a company that produces morphine, codeine, fentanyl, oxycodone, and hydrocodone. Obviously, it’s not just Purdue Pharma that is pumping these medicines out in the world. (We would also like to mention that we understand there are people who need these drugs to live a normal life. It has also helped many people live a pain-free life.) 

However, many of these chemicals are known to have long-term negative side effects, while also being highly addictive. The point of “medicine” is to diagnose, treat, but most importantly, prevent disease. Many of the drugs created by Big Pharma do 2 of those 3 things.

Taking Aim at Big Pharma

As you’d guess, providing drugs that prevent a disease from continuing isn’t very profitable. However, providing drugs that cause the patient to not be able to live without them, can be very lucrative. This is where the public has grown its disconnect, and distrust of Big Pharma.

The reason a patient goes to the doctor for help, isn’t to be forced into taking a never-ending drug regiment. The reason a patient goes to the doctor’s office is to alleviate and rid themselves of whatever pain or discomfort they are feeling. 

Even more worrisome is the fact that people have been cooped up in their homes all day due to COVID. Levels of depression and anxiety have begin to bump up over the last year. This only provides more opportunity for pharmaceutical companies to provide drugs marketed as healers. Unfortunately, more addictions occur as a side effect. Enter stage right, small psychedelic medicine companies.

Introducing Psychedelic Medicine

There are now numerous companies in early stages of drug trials. These companies are using some of the Earth’s natural chemicals, and synthetic chemicals to treat various types of disorders. 

Many of these companies offer “therapy sessions” where a licensed psychiatrist prescribes psychedelic medicine to a patient. Then, the patient undergoes a psychedelic experience in the office. Where the therapist allows the patient to explain their feelings and slowly talk through their difficulties. 

**To give you a look at the real-life application of the possibilities of this market, I have attached a link to a recently released CBS News Interview.

The drug under the hood allows the person to have an experience that is unlike anything they would experience taking over-the-counter prescriptions. The idea being that the patient should undergo a “healing” realization. 

Currently, there are psychedelic medicine biotech companies creating therapies for those suffering from addiction, anxiety, depression, pain, and even headaches. 

Risk Runs Amuck

The risk of investing in many of these companies is that many of them are still in early development stages. Each day they endure highly-scrutinized research. Many of these companies are building chemicals and therapies from a lightly-proven hypothesis.

Only time will tell if many early shareholders will be paid off for their speculative bet. Overall, The Investor Weekly believes that this industry deserves to have a watchful eye over it for the extended future as trial results come in.

Leading Companies in the Space

To continue, we would like to acknowledge three of the leading psychedelic medicine biotech companies by market cap. 

The first company that we believe has a compelling outlook is Atai Life Sciences (NASDAQ: ATAI). Atai has been able to acquire many smaller companies focusing on psychedelic therapy development. 

Creating a pipeline of separate companies running each trial program. The main opportunity for investors looking into Atai Life Sciences is the incoming wave of mid-to-late stage trial programs. These trials can offer high levels of potential future revenue based on results. 

The next company we would like to make you aware of is Mind Medicine (NASDAQ: MNMD). Mind Med’s main goal is to be a leading mental health company. MindMed is this sector’s leader when it comes to LSD related trial programs. They currently have an entire pipeline of phase 2 clinical trials to better understand LSD’s ability to cure depression, anxiety, and pain. 

For the company’s Investor Presentation, follow this link

Most interestingly, Mind Med is trying to prepare for the worst case scenarios in their treatments as well. Including an LSD neutralizer technology that can quickly and safely end a “bad trip”. 

Once again, like many of its competitors, much of its future success is riding on the results of its FDA trials. This is a speculative investment at best, and should be treated as such with high levels of scrutiny.

A Leader in Depression Therapies

The last company we would like to introduce is Compass Pathways (NASDAQ: CMPS). Compass Pathways is currently in the middle of a phase 2b clinical trial covering its leading therapy called COMP360. COMP360 is a mix of Compass’ psilocybin drug and guided therapy session. 

The company’s current focus it is hoping to establish a cure for is depression. Their trial’s goal is to establish a therapy session that can maximize the beneficial impacts, while minimizing the risk of side effects.

In summary, The Investor Weekly sees this as a sector of the market similar to the past emerging marijuana market. With many speculative options coming onto exchanges, it is wise to remember that a main goal of investing is to find “profitable” companies. This is not the case for a large majority of these specific companies as of now. For now, we let Father Time do his work and continue to admire the technological advances our society will endure.

Disclosures

I am/we are long MindMed (MNMD) either through stock ownership, options, or other derivatives. 

I wrote this article myself, it expresses my own opinions, I am not receiving compensation for it. and I have no business relationship with any company whose stock is mentioned in this article.

Nothing on this site nor any published commentary by The Investor Weekly is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. Investing involves risk. Loss of principal is possible. Please consult with your investment, tax, or legal adviser regarding your individual circumstances before investing.