Top psychedelic drug stocks investors should watch in 2022.
In November 2020, Oregon made history by becoming the first U.S. state to legalize psilocybin, the active ingredient in so-called magic mushrooms. Much like cannabis, psychedelics are becoming more mainstream, and investors are sizing up what could be a major long-term growth opportunity. Market research firm Research and Markets recently estimated that the psychedelic drugs market will reach $10.75 billion by 2027. Unfortunately, cannabis stock investors know the nascent business has faced many regulatory hurdles and experienced multiple boom and bust cycles, so psychedelics investors must have a high risk tolerance. Here are seven top psychedelics stocks to watch.
Mind Medicine Inc. (ticker: MNMD)
Mind Medicine is a biotechnology company that is running clinical trials on multiple drug candidates, including LSD, DMT, mescaline and ibogaine derivative 18-MC. In January, the U.S. Food & Drug Administration cleared MindMed’s investigational new drug application, allowing Phase 2b testing of MM-120, a pharmacologically optimized form of LSD, in treating general anxiety disorder. The company is also testing psychedelics in treating conditions such as adult attention deficit hyperactivity disorder, opioid addiction, and acute and chronic pain. Depression, ADHD and addiction are massive markets and provide tremendous long-term potential for investors willing to tolerate the risks.
ATAI Life Sciences (ATAI)
ATAI Life Sciences is developing multiple drugs based on ibogaine, ketamine and other psychedelic substances. ATAI went public in June 2021, and its early investors include billionaire venture capitalist Peter Thiel. ATAI has struggled since it priced its IPO at $15, and the stock is now trading under $5.70. However, popular stock picker and ARK Invest founder Cathie Wood gave the stock a vote of confidence in February when she began buying shares of ATAI through her ARK Genomic Revolution ETF (ARKG). ATAI has nine drug candidate programs, four of which are already in clinical testing. Its leading drug candidate, RL-007, is in Phase 2 testing for treatment of schizophrenia.
GH Research PLC (GHRS)
GH Research is developing and testing three novel and proprietary 5-MeO-DMT therapies for treatment-resistant depression. The psychedelic 5-MeO-DMT is a close relative of DMT, known as dimethyltryptamine. It occurs in nature in a wide variety of plants and is secreted by glands of the Sonoran Desert toad. In December, GH reported that seven out of eight patients treated with its lead product candidate GH001, which administers 5-MeO-DMT via inhalation, were in remission after seven days of dosing during Phase 2 clinical trials. The company’s GH002 product candidate is testing 5-MeO-DMT administration via injection, while GH003 is testing intranasal administration of the drug.
Compass Pathways PLC (CMPS)
Compass Pathways is testing synthetic psilocybin therapy COMP360 for treatment-resistant depression and post-traumatic stress syndrome, or PTSD. Trial patients take COMP360 in a controlled environment, and a therapist talks them through the experience. Similar Phase 3 trials by the University of California–San Francisco using MDMA, or ecstasy, in treating PTSD recently yielded positive results. Compass Pathways completed its initial public offering in September 2020, selling shares at $17. Since its debut, the volatile stock has traded as high as $61 but it has since dropped back down below $14. Investors should expect further trial data to trigger more volatility in CMPS stock.
Cybin Inc. (CYBN)
Cybin is a Canadian pharmaceutical company developing psychedelic medicines for the treatment of mental illnesses such as depression, anxiety and addiction. The company’s clinical-stage EMBARK trial is testing psilocybin in treating mental distress of front-line health care workers. In May 2021, Cybin was approved to begin Phase 2 clinical trials of CYB001 in treating major depressive disorder, or MDD. In November, Cybin reported positive pre-clinical findings for its CYB003 deuterated psilocybin analog in treating alcohol use disorder and MDD. Cybin recently partnered with popular author and alternative medicine advocate Deepak Chopra to raise awareness of the potential for psychedelics to support well-being and mental health.
Seelos Therapeutics Inc. (SEEL)
Seelos Therapeutics is a biopharmaceutical company with four clinical-stage pipeline programs. Seelos is in Phase 2/3 testing of SLS-005 in treating both amyotrophic lateral sclerosis, known as Lou Gehrig’s disease, and spinocerebellar ataxia. SLS-005 is a sugar consisting of two molecules of glucose. Seelos’ SLS-002 intranasal ketamine and its SLS-003 sublingual ketamine drugs are its psychedelic pipeline candidates. The company is currently testing SLS-002 in treating acute suicidal ideation and behavior in patients with MDD. It’s also testing SLS-003 in treating complex regional pain syndrome. Finally, Seelos has two preclinical gene therapy programs — SLS-004 and SLS-005 — targeting Parkinson’s disease.
Field Trip Health Ltd. (FTRP)
Field Trip Health is another company researching a synthetic psilocybin molecule, drug candidate FT-104. Field Trip believes FT-104 has a similar potency as psilocybin but generates a shorter period of psychoactivity, potentially making it preferable for use in treating patients. Last year, Field Trip Health opened its Field Trip Natural Products Limited Research and Development Laboratory for Psychedelic Fungi in Mona, Jamaica. The new facility is the world’s first legal research facility dedicated exclusively to psilocybin and other plant-based psychedelics. In July 2021, Field Trip was granted a Nasdaq listing and began trading in the U.S. under the ticker FTRP.
Seven psychedelic stocks to watch:
— Mind Medicine Inc. (MNMD)
— ATAI Life Sciences (ATAI)
— GH Research PLC (GHRS)
— Compass Pathways PLC (CMPS)
— Cybin Inc. (CYBN)
— Seelos Therapeutics Inc. (SEEL)
— Field Trip Health Ltd. (FTRP)
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7 Psychedelic Stocks to Watch originally appeared on usnews.com
Update 03/21/22: This story was published at an earlier date and has been updated with new information.
