The world’s first psychedelic ETF, PSYK, is an industry bellwether which indicates the psychedelics space continues to take a drubbing since the ETF launched in January. The fund closed its first day of trading at $9.43 CAD per unit but now trades at $5.75, a 39.02% drop. Many stocks within the space have performed similarly. It’s a sad day in Mudville for investors in the psychedelics space.
All is not lost however, the cessation of value accretion is due to the legislative limbo for psychedelics and the discovery of application best practices as illustrated by a recent Vice article outlining the telemedicinal fiasco at Mindbloom, a privately-held remote provider of ketamine-assisted psychotherapy.
Investors have significantly cooled their heels as tax loss season draws to a close and Omicron makes its global rounds. Does this mean the sector is old news? When applied correctly and mindfully, psychedelic-assisted psychotherapy utilizing such drugs as MDMA, psilocybin, DMT and ayahuasca are proving to be massively helpful in the treatment of substance use disorders, PTSD and major depression disorder.
As we face the growing possibility of worldwide revolving lockdowns, mental health will be more fragile than ever, so we cannot afford to shut the door, but we need to be more pragmatic with our proposed psychedelic solutions. Basically, more research must take place to support medicinal psychedelic use in order to fulfill current tragically unmet needs in mental health therapy.
Thankfully, despite the deflation of publicly traded psychedelic companies, the DEA has significantly upped production quotas of Schedule 1 and 2 controlled substances for the purposes of research in 2022. This will help demystify and standardize the use of psychedelic compounds, bringing the whole industry toward clinical standards, rather than the by-guess and by-gosh world of anecdotal evidence-based discovery which has plagued the medicinal marijuana space since its inception.
According to the notice released through the Federal Registrar, the Drug Enforcement Administration recommended that limits for the production for 2022 includes some surprising increases compared to the organization’s 2021 recommendations.
- Production of MDMA for research purposes raised to 3,200 grams compared to 50 grams in 2021, a 6300% increase.
- Production of LSD for research purposes up to 500 grams compared to 40 grams in 2021, an 1150% increase.
- Production of mescaline (peyote) for research purposes raised to 100 grams from 25 grams in 2021, a 300% increase.
- Production of dimethyltryptamine (DMT) for research purposes up to 250 grams from 50 grams in 2021, a 400% increase.
- Production of psilocybin for research purposes raised to 3,000 grams from 2021’s established quota of 30 grams, a 9900% increase.
The preceding numbers are proof-positive that regulators have realized the real-world therapeutic potential of psychedelic-assisted psychotherapy and however slowly American lawmakers introduce new regulations allowing the widespread use, the inevitability of that change seems written in stone.
Companies focused on the academic study and discovery of novel psychedelic compounds for medicinal purposes may benefit most in the short term as public market entities providing so-called therapeutic retreats and recreational psychedelic products won’t necessarily pop until legislation is in place that will allow you to legally wander down the street to your local ‘candy’ shop for a trippy treat. Honestly, I don’t see the day that legalized recreational psychedelics is a thing, but you never know.
Here are just some of the companies that may benefit from the DEAs increased support:
Filament Health (FH.NEO) continues to work on developing novel extraction and purification methods for the botanical extraction of psilocybin. The company celebrated the first authorized FDA clinical trial of natural psilocin in Q4 2021 at UCSF’s TrPR Program.
With a strong IP portfolio which features the first patent granted from natural psilocybin extraction, a Health Canada Dealer’s License via its wholly owned subsidiary, Psilo Scientific, and in-house GMP manufacturing, Filament is positioned to create a sustainable share of the natural psychedelic market.
Currently the company trades at $0.27 per share for a market cap of $44.48 million.
MindCure Health (MCUR.C) is manufacturing synthetic ibogaine for clinicians and researchers to provide pharmaceutical quality solutions for the treatment of for such indications as addiction, migraines, cluster headaches, neuropathic pain and treatment-resistant mood disorders.
The company is also heading up the Desire Project which seeks to use MDMA-assisted psychotherapy to treat women suffering from Hypoactive Sexual Desire Disorder (“HSDD”) which affects an estimated 9.5 million premenopausal women in the U.S. alone.
MindCure announced at the beginning of November that it had initiated the production of Good Laboratory Practice (“GLP”) ibogaine and is on schedule to have a GLP supply available for research partners in Q2 2022. The company also confirmed it is preparing to ship ibogaine drug material to its pre-clinical research partner.
Its draft research protocol has been completed for the use of MDMA and psychotherapy for the treatment of HSDD and the company expects a pre-IND meeting with the FDA to be scheduled for Q3 2022.
MindCure currently trades at $0.23 per share for a market cap of $21.08 million.
Mind Medicine (MMED.NEO) is working to developing multiple generations of potential drug candidates derived from classic psychedelics molecules such as DMT, MDMA, psilocybin and LSD.
The company has over 45 patent applications covering more than 45 molecules and 30-plus NCEs. There are more than ten patent applications for LSD and greater than 3 patent applications covering 18-MC (non-hallucinogenic and non-cardiotoxic congener of ibogaine) within MindMed’s IP portfolio.
MindMed has a prolific drug development pipeline ranging from pre-clinical stages to Phase 2B including drug candidates like MDMA, mescaline, DMT, LSD and 18-MC treating everything from psychiatric indications to addiction and pain.
MindMed announced on Thursday that it would present at the H.C. Wainwright 2nd Annual Psychedelics Conference which will be held virtually on Monday, December 6, 2021. Company CEO, Rob Barrow, will participate in a panel discussing the future of mental Healthcare at 2:30 pm EST on the day.
If you wish to participate in the conference, the company presentation will be available on-demand through the conference portal beginning at 7:00 am EST for all those registered for the event.
MindMed currently trades at $2.57 per share for a market cap of $1.17 billion.
Mindset Pharma (MSET.C) develops novel and patentable psychedelic compounds for the treatment of neurological and psychiatric disorders. The Toronto, Ontario-based company has over 75 compounds synthesized with preclinical data demonstrating promising results.
With four patent-pending new families drawing on novel chemical structures and a synthesis process for psilocybin which demonstrates clear benefits over known process, Mindset is striving to build a strong IP portfolio to help treat neuropsychiatric patients with unmet needs.
The company’s lead compound MSP-1014 has shown superior preclinical characteristics in head-to-head comparison with psilocybin while its DMT/5-meO-DMT-inspired candidates are currently going through in vitro screening.
Mindset currently trades at $0.66 per share for a market cap of $55.70 million.
There are more to be mentioned, I am sure, but my time is up for this edition. If the DEA continues, legislation will follow. This will be a practice of patience for those interested in getting in psychedelics investment opportunities. If I am still missing any contenders in these roundups, let me know and I will make sure to include them in future editions. Get out there, get educated, do your due diligence, pick your winners, and make this a better world. Good luck to all!
–Gaalen Engen
