Psychedelic drugs are slowly working their way into the mainstream. Major hospitals such as Johns Hopkins are even researching the use of psychedelic drugs like psilocybin and LSD to treat a wide range of mental health conditions.
Psychedelics have the potential to treat conditions like depression, anxiety, post-traumatic stress disorder, anorexia, obsessive-compulsive disorder, and addiction.
Each of these treatments represent a massive market for the drugs and the companies that produce them. The advance of psychedelic drugs represents a potential mental health revolution. It also presents a chance for massive financial gains for early investors.
We advocated in a recent article for owning a wide swath of psychedelic drug companies. It is very early in the psychedelic drug industry’s evolution, so it is difficult to weed out the eventual winners in advance.
With so many companies rushing to claim a piece of the pie, it will be difficult to investigate all the companies claiming to be in the psychedelics market.
To give investors an idea of just how early we are in this market, one needs to look at the comparison between Compass Pathways (CMPS) and the rest of the market.
Compass Pathways is literally bigger than the ENTIRE psychedelics market, and it only went public in September 2020.
This means that the market capitalization of the entire psychedelics market (as shown by our Psychedelic Index) doubled overnight.
Investors must realize that we are in the very first inning of the psychedelics market. Making bets today will give investors outsized returns, but it also means that they will have to contend with early-stage and potentially shady companies.
That said, we have compiled what we believe are 10 psychedelic companies that investors should have on their radar.
1. Compass Pathways
Compass Pathways (NASDAQ: CMPS) is the largest and best-funded public psychedelic company so far. In September, the London based Company did an Initial Public Offering of 7,500,000 American Depositary Shares (“ADSs”) representing 7,500,000 ordinary shares at an initial public offering price of $17.00 per ADS for total gross proceeds of $127.5 million. The stock currently has a market capitalization of $1.28 billion.
Compass Pathways is developing psilocybin for use with treatment-resistant depression. The company is currently conducting an FDA phase II clinical trial of psilocybin for treatment-resistant patients in 20 locations across Europe and North America.
Co-founders George Goldsmith and Ekaterina Malievskaia started Compass Pathways after dealing with a family member with severe depression. The two joined with entrepreneur Lars Christian Wilde who serves as President and runs operations and funding for the Compass Pathways.
German financier Christian Angermayer is one of the biggest backers of Compass Pathways. Mr. Angermayer is a powerful advocate for using psychedelics to treat mental illness and thinks it can be an extraordinary opportunity.
Angermayer is also the founder of the currently private company, ATAI Life Sciences, which is dedicated to bringing innovation to mental healthcare. Their focus is on new innovative methods for treating depression, anxiety, and addiction. (ATAI recently raised capital with plans to go public in the near future.)
2. Mind Medicine
Mind Medicine (NEO:MMED, OTC:MMEDF) is a biotech company that discovers, develops, and deploys psychedelic inspired medicines and therapies to address addiction and mental illness. The company has a development pipeline of innovative treatments based on psychedelic substances, including psilocybin, LSD, MDMA, DMT, and an ibogaine derivative, 18-MC.
Mind Medicine (or, MindMed) recently closed a C$25,000,500 offering. Proceeds will be used to develop treatment protocols for therapy using psychedelic drugs, including LSD. MindMed will also use some of the money to fund their collaboration with the University Hospital Basel Liechti Lab and continue developing MindMed Discover research and development programs as well as a training program at NYU Langone Health.
MindMed has developed research partnerships with leading hospitals and universities to explore the possibilities of using psychedelics to treat mental health issues, including addiction. The Centers for Disease Control and Prevention estimates that the economic burden of opioid addiction is more than $78 billion annually, while alcoholism is estimated to be around $250 billion.
By itself, addiction is a massive potential market for psychedelic drugs. There is also growing evidence that these drugs can treat anxiety, depression, eating disorders, and other mental health issues.
3. Field Trip Health
Field Trip Health (CSE:FTRP, OTC:FTRPF) is leading the medical and scientific re-emergence of psychedelic-enhanced therapies. In a previous interview with CEO Ronan Levy, he explained how Field Trip is planning to open a series of mental health clinics that will offer psychedelic-assisted therapy to their patients.
Field Trip is creating what we would describe as a vertically integrated psychedelics company.Field Trip CEO, Ronan Levy
The company uses a six-step protocol process that ensures that patients qualify to understand the psychedelic treatment process before they begin to administer the treatment.
Field Trip Health has an aggressive rollout strategy of 75 clinics by 2023. Clinics using Ketamine-enhanced psychotherapy (a clinic-based treatment that combines the administration of Ketamine with psychotherapy sessions) are already open in Toronto, New York, Los Angeles, and Chicago. The company recently announced that it is also actively identifying potential locations to open Health Centers in Oregon to provide psilocybin therapies given the recent approval of Measure 109.
Field Trip’s research division, Field Trip Discovery, is also opening a botanical research facility in conjunction with the University of West Indies along with Dr. Rupika Delgoda, Executive Director of the Natural Products Institute at UWI. The research at this facility will explore the cultivation of psilocybin-producing mushrooms and the identification, isolation, and characterization of active substances in mushrooms and related fungi.
The research location in Jamaica is perfect for psilocybin research. Unlike in the United States and Canada, psilocybin is not considered a dangerous drug in Jamaica. There are no legal hurdles to be met to conduct the research. But despite the domestic legal hurdles, the company is still seeking licensing for the cultivation of psilocybin-producing mushrooms in the state of Oregon.
Field Trip Discovery is also developing medicines targeting the 5HT2A serotonin receptor, which is believed to be the primary receptor involved in psychedelic experiences and responsible for using these substances to treat mental disorders.
Their first molecule, FT-104, is a synthetic psychedelic molecule that they believe might be a commercially viable alternative to naturally derived substances.
4. Mydecine Innovations Group Inc.
Mydecine Innovations Group Inc. (CSE:MYCO, OTC:MYCOF) is a life sciences syndicate dedicated to developing and producing adaptive pathway medicine and natural health products, all stemming from mushrooms.
Mydecine has three divisions that provide different products and services related to the mushroom-based pharmaceutical business. Two of the three divisions were from acquisitions in the past year.
- Mydecine Health Sciences is a vertically integrated company developing novel mushroom vitality products and psychedelic medicine to produce better options for people to live healthier lives.
- In September 2020, Mydecine completed its acquisition of NeuroPharm for ~$6M. The company is responsible for managing clinical trials to develop unique and proprietary pharmaceutical and natural health products addressing mental wellness in vulnerable populations such as veterans and first responders.
- In June 2020, Mydecine acquired Mindleap Health, a digital telehealth platform that gives individuals access to mental health professionals online.
Mydecine will operate in both the therapeutic and consumer goods side of the mushroom market. On the consumer side, they will be introducing proprietary fungi infused goods starting with coffee and chocolate product lines in Q4 2020.
Mydecine also has a 50% stake in Alternative Distribution Company to support nation-wide distribution and manufacturing. Alternative Distribution is a Texas-based distributor with existing relationships with thousands of stores, including market leaders like HEB, Costco (COST), Whole Foods (WFM), Kroger (KR), and more.
Mydecine is working closely with military health agencies in both Australia, Canada, the Netherlands, Great Britain, and the United States to study veterans with Post Traumatic Stress (PTS). Currently, they have seven clinical trials underway studying the relationship between psychedelics and PTS and have another one planned for 2021.
5. Seelos Therapeutics
Seelos Therapeutics (NASDAQ:SEEL) is a clinical-stage biopharmaceutical company that focuses on developing novel technologies and therapeutics to treat the central nervous and respiratory systems. Besides traditional biotech projects like gene therapy, Seelos is also developing products using Ketamine to treat Acute Suicidal Ideation, Major Depressive Disorder (MDD), and Post-Traumatic Stress Disorder (PTSD).
Doctors would use Ketamine when they feel that the patients’ depression has progressed to the point that thoughts of suicide have developed.
If successful, this could become one of the most critical mental health treatments ever developed. 800,000 people die due to suicide every year. That is one person every 40 seconds. Suicide is the 10th leading cause of deaths in the U.S., with 45,000 people taking their own life every year.
There is no drug approved anywhere in the world for the treatment and prevention of suicidal thoughts.
Ligand Pharmaceuticals (LGND) owns 5% of the Company. Ligand is known for acquiring drugs and helping get them to market; therefore, they have an interest in the development of the Ketamine and other trials that Seelos is conducting.
6. Revive Therapeutics Ltd.
Revive Therapeutics Ltd. (CSE:RVV, OTC:RVVTF) is focused on researching and developing therapeutics for rare disorders and infectious diseases. Revive has a portfolio of cannabis products that focus on inflammatory areas such as liver disease. They currently have FDA approved orphan drug status for CBD products used to treat auto-immune hepatitis reperfusion injury from organ transplantation.
In May, 2020, Revive acquired Psilocin Pharma Corp., a psychedelic sciences company focused on the development of Psilocybin-based therapeutics for significant unmet medical needs, including rare and orphan indications.
Psilocin Pharma has developed six formulations that will be used to study the use of psilocybin for the treatment of Depression, Anxiety, Bipolar disorder, Bulimia, and Anorexia Nervosa, as well as many other mental illnesses and conditions.
Psilocin has been working with the University of Wisconsin to research delivery methods of oral doses of psilocybin to treat methamphetamine addiction.
There are approximately 1.1M people aged 12 or older who have a Methamphetamine Use Disorder in the United States. The economic cost in the U.S. is approximately $23 billion.
There is no current pharmaceutical treatment for Methamphetamine Use Disorder, so this is potentially a large market for Revive if the study is successful.
7. Champignon Brands
Champignon Brands (CSE:SHRM, OTC:SHRMF) considers itself a human optimization sciences company emphasizing Ketamine and psychedelic medicine. Champignon operates the Canadian Rapid Treatment Centre of Excellence. The Centre is Canada’s first multidisciplinary community clinic offering rapid-onset treatments for depression. The Centre uses Ketamine to treat a range of psychological and mental health conditions.
Champignon Brands is also engaged in the formulation and distribution of mushroom-infused beverage products and health supplements for wellness. The company distributes its products under its brand Vitality Supertea.
Although Champignon has a lot of interesting projects going on in the psychedelics space, the company’s stock has been halted for much of 2020 as the BC Securities Commission looks into their filings.
8. Numinus Wellness
Numinus (TSXV:NUMI, OTC:LKYSF) is a company at the forefront of addressing the growing prevalence of mental health issues and the desire for greater wellness.
Their operations include:
- Numinus Bioscience, a testing and research facility that can leverage the emerging market of psychedelic-assisted psychotherapies to address mental illness, addictions, and PTSD.
- Numinus Health, a treatment and healing center model that aims to scale globally.
Numinus’s Research and Development arm is creating partnerships with leading research groups to advance practice and understanding in the space.
Sustainable cannabis revenue through Numinus Bioscience’s laboratory and production operations will help fund growth plans.
Numinus is the first publicly-traded company in Canada granted a license by Health Canada to research the production and extraction of psilocybin from mushrooms.
9. Havn Life Sciences
Havn Life Sciences (CSE:HAVN) is a biotechnology company on a mission to unlock human potential using evidence-informed research.
Therapists need access to a pure, lab quality supply of psychedelic compounds. That’s not to mention the coming need for compounds to support ongoing research, clinical trials and more. Havn hopes to be the supplier of those products and is currently developing a range of standardized psychoactive compounds derived from plants and fungi.
The company focuses on standardized, quality-controlled extraction of psychoactive compounds from plants and fungi and the development of natural health care products from non-regulated compounds.
Havn Life has applied to Health Canada to obtain a Controlled Drugs and Substances Dealer’s License for Psilocybin and Psilocin. If approved, the license will allow Havn Life to sell naturally-derived psilocybe compounds, under the Controlled Drug and Substances Act, to universities, researchers, and companies.
Havn also announced that they have agreed to supply Revive Therapeutics with naturally-derived psychedelic compounds, such as psilocybin, for use in future investigational new drug studies and clinical trials under FDA guidelines. In a recent interview we had with the president of Havn Life, Barinder Rasode, she explained the company’s retail arm, Havn Retail, is simultaneously working on natural products for mental wellness as a revenue source to support its psychedelic work.
10. Red Light Holland Corp.
Red Light Holland Corp. (CSE:TRIP) engages in the production, cultivation, and sale of a premium brand of magic truffles to the legal recreational market in the Netherlands. Red Light is also seeking a European Union Good Manufacturing Practice (EUGMP) certification for its production facility in the Netherlands and is producing and supplying medical-grade, EUGMP certified premium magic truffles within the Netherlands.
Red Light Holland recently announced that its science division, Scarlette Lillie Science and Innovation, has secured a relationship with Jinfiniti Precision Medicine to explore the potential roles that psilocybin can play for age-related and psychiatric disorders.
The Psychedelics industry has the potential to soar in the same manner as the cannabis industry did earlier this decade. At this early stage, the trick for investors is to own as many of the leading contenders as there is still a great deal of uncertainty.
These ten are among the best positioned psychedelic biopharmaceutical companies today.