The first thing anyone should know about psychedelic stocks is that it is a long game. If you are expecting a quick turn in profit for your investment, then this is certainly the wrong space for you. “Psychedelic stocks” include companies doing drug research and development, and developing digital and brick and mortar treatment platforms. Today will be looking at some of the largest psychedelic Biotech companies because they have significant growth potential– which takes years and hundreds of millions of dollars in cash burn to bring a treatment to market. So, if you are happy sitting on your investment for a few years, then there may be some benefits for you in this market.
It is hard to say which companies will succeed and which will fail. It is a long and treacherous process to develop and bring a new drug to market. In this article, we will look at a few key indicators to predict which companies are the most likely to succeed in the difficult terrain that psychedelic biotechnology presents.
This list is based on the current position of these companies, and it is subject to changes as they and other companies develop. To create this list we looked at the prospect of these companies’ treatments and their ability to bring them to market. The amount of success that each company will have is dependent on the development of their drugs/products, clinical trials, and the partnerships that they form. Most of these outcomes will not be known for a few years. Investors who will have the most success in the psychedelic industry hold a variety of companies in their portfolio– this will help offset some of the risks that come along with investing in such a volatile industry.
There will be companies that are wildly successful in creating breakthrough treatments. Psychedelic medicines have the potential to disrupt several multi-billion-dollar industries. There is a lot of money to be made here, but not without a strong and complex strategy. The following list represents strong candidates for successful biotech companies. We urge you to continue your research before investing in this complex industry. Check out Psychedelicinvest.com for news and unique insights on psychedelics, and Neuly for data and tools that will connect you to the industry.
**Market data is based on the time of writing September 26, 2022
Market Cap: $568 Million
Current Market Price: $10.93
GH Research (NASDAQ: GHRS) has a narrow focus compared to many other companies in the space. They are focused exclusively on medicines for depression. There are currently three compounds in their pipeline– all are 5-MeO-DMT analogues. This compound is a very powerful psychedelic originally found in the venom of the Sonoran Desert Toad, commonly known as Bufo Toad. Phase 1 and 1/2 trials for their proprietary inhalable compound, GH001, showed 87.5% remission. Their injectable and intranasal versions of the 5-MeO-DMT are currently in preclinical development.
Their narrow focus allows them to hone their specialty so that they can successfully bring new drugs to market. This does, however, mean that should these compounds fail, the company does not have others to fall back on. The result is a higher risk, but, if they succeed with these compounds, the reward will be substantial.
Market Cap: 520 Million
Current Market Price: $3.14
Atai Life Sciences (NASDAQ: ATAI) is “a biopharmaceutical company that leverages a decentralized platform approach to incubate and accelerate the development of highly effective mental health treatments.” Like many companies on this list, they are working on treatments for mental health issues like treatment-resistant depression and addiction. They currently have seven compounds in their pipeline including synthetic psilocybin, ibogaine, MDMA, and DMT. Their R-Ketamine drug (PCN-101) has been given investigational new drug clearance by the FDA– meaning they can ship the drug across state lines and administer it to human subjects. Atai has one of the most diverse compound portfolios of all psychedelic biotech companies.
They have one of the top market capitalizations among all psychedelic stocks and a very strong portfolio of psychedelic compounds in their pipeline. The company also holds a large percentage of the equity in Compass Pathways. They have been successful in making strategic partnerships. They work with several companies on drug development. They also have a licensing agreement with Japanese pharmaceutical company Otsuka for their R-ketamine compound.
Market Cap: 489 Million
Current Market Price: $11.51
Compass Pathways (NASDAQ: CMPS) focuses exclusively on psilocybin compounds to treat depression, PTSD, and anorexia nervosa. Their main candidate, COMP360, is undergoing research for treatment-resistant depression. They have completed two of the largest psilocybin treatment studies to date, and their work is some of the most well-known in the industry– alongside MAPS.
With its strong pipeline and the backing of another major psychedelic biotech company (Atai Life Sciences), Compass Pathways is set up for success. They will likely be one of the first companies to have a compound hit the market, and they have the resources and connections to do so successfully. Their studies have shown a significant reduction in depression symptoms after a psilocybin treatment. The FDA has shown interest in approving this type of treatment, and Compass is set up to provide it. There is huge potential for effective depression treatments since no available medicines can give significant results.
Market Cap: 175 Million
Current Market Price: $5.75
Mind Medicine (NASDAQ: MNMD), commonly known as MindMed, is developing novel psychedelic drugs and a digital therapeutics platform that will help practitioners carry out treatment with their patients. This vertical framework is not as common for the top psychedelic biotech companies. Drug research and development requires a lot of resources and different specialization than the development of a technology platform and network. While this does pose challenges during development, success would mean a platform to roll out treatment using the medicines that they develop. Many companies are choosing, instead, to form strategic partnerships in this area.
MindMed’s pipeline currently has three compounds. The leading candidate is an LSD analogue for the treatment of multiple mental health issues. MindMed has over a dozen trials, though only one of them is currently active. The majority of them are actively recruiting. They also have multiple studies running to gather data for their digital platform.
Market Cap: 112 Million
Current Market Price: $1.05
Seelos Therapeutics (NASDAQ: SEEL) is a company “focused on achieving the most efficient development of products that address significant unmet needs in CNS disorders and rare diseases.” They have five drugs in their pipeline, three of which have made it to phase 2 of clinical trials. They have an intranasal ketamine treatment for depression, however, their primary focus is on rare CNS diseases, including, ALS and Parkinson’s. There are not many psychedelic biotech companies with this focus, which gives MindMed a less crowded market.