The use of psychedelic drugs still carries a stigma, and there is also uncertainty surrounding the FDA’s approval of psychedelic drugs. However, the increasing acceptance of psychedelic treatments and the availability of off-label medications are expected to drive the industry’s growth. The Biden administration also recently proposed a change to the federal drug scheduling system, with the goal of streamlining research into Schedule I controlled substances, including psychedelics.
According to a report by Data Bridge Market Research, the psychedelic drugs market is expected to grow at a 13.3% CAGR from 2021 - 2028. Furthermore, the COVID-19 pandemic-led isolated lifestyle has highlighted the demand for psychedelics. Current, uncertain times have caused rising prevalence of depression and anxiety, increasing the need for psychedelic-based treatments.
Given the industry’s immense growth potential, we think it could be wise to add psychedelic-related stocks COMPASS Pathways plc (CMPS), Mind Medicine (MindMed) Inc. (MNMD), and Seelos Therapeutics, Inc. (SEEL) to one’s watch list. Wall Street analysts expect these stocks to double or triple in price in the near term.
COMPASS Pathways plc (CMPS)
Based in Cheshire, U.K.,CMPS is a mental health care company. It is developing COMP360, a psilocybin formulation that is in Phase IIb clinical trials to treat patients with treatment-resistant depression.
On July 5, 2021, CMPS signed a memorandum of understanding with South London and Maudsley NHS Foundation Trust and the Institute of Psychiatry, Psychology, and Neuroscience. George Goldsmith, the CEO and Co‑founder of CMPS, said, “This partnership would help to amplify our combined efforts so we can bring evidence-based innovation, on a large scale, to people in the U.K.”
CMPS’ total assets surged 64.7% sequentially to $335.16 million for its fiscal second quarter, ended June 30, 2021. Its loss per share decreased 73.3% year-over-year to $0.44. Its general and administrative expenses came in at $8.17 million, representing a 25.4% year-over-year decrease.
Analysts expect CMPS’ EPS to increase 52% year-over-year for the quarter ending September 30, 2021. The stock has declined 0.7% in price over the past month to close yesterday’s trading session at $33.47. However, Wall Street analysts expect the stock to hit $70 in the near term, which indicates a potential 109.1% upside.
Mind Medicine (MindMed) Inc. (MNMD)
Psychedelic medicine biotech company MNMD in New York City discovers, develops, and deploys psychedelic inspired medicines and therapies to address addiction and mental illness. The company is assembling a compelling drug development pipeline of innovative treatments based on psychedelic substances.
MNMD and BioXcel Therapeutics, Inc. (BTAI) announced on September 2, 2021, the publication of the International Patent Application for detecting and preventing the early onset of agitation in patients. Martin Majernik, MNMD’s Director of Digital Product Lifecycle, said, “Through this project, our exceptional team of clinicians and engineers is dedicated to building products that can have a tangible impact."
MNMD’s total assets came in at $194 million for its fiscal second quarter, ended June 30, 2021, versus $201 million in the prior quarter. Its net cash used in operating activities was $12 million compared to $10 million in the previous quarter. Also, its net and comprehensive loss came was $36 million, versus $14 million in the last quarter.
Over the past year, the stock has gained 682.2% in price to close yesterday’s trading session at $2.63. Wall Street analysts expect the stock to hit $6.45 in the near term, which indicates a potential 145.3% upside.
Seelos Therapeutics, Inc. (SEEL)
SEEL is a clinical-stage biopharmaceutical company that is focused on developing and commercializing novel technologies and therapeutics to treat the central nervous system, respiratory, and other disorders. The New York City company's lead programs are SLS-002, SLS-005, and SLS-006.
On July 7, 2021, SEEL announced positive in vivo data demonstrating down-regulation of SNCA mRNA and protein expression from a study of SLS-004 in an in-vivo rodent model utilizing CRISPR-dCas9 gene therapy technology. Raj Mehra, the company’s Chairman and CEO, said, “We are highly encouraged by these preliminary findings demonstrating downregulation of SNCA mRNA and SNCA protein expression in this in vivo model."
SEEL’s total assets surged 416.2% year-over-year to $90.31 million for its fiscal second quarter, ended June 30, 2021. Its total liabilities decreased 49% year-over-year to $7.61 million. Also, its cash came in at $87.20 million, representing a 1,389.6% year-over-year increase.
For its fiscal year 2022, analysts expect SEEL’s EPS to increase 16.4% year-over-year. The stock has gained 220.9% in price over the past year to close yesterday’s trading session at $2.07. Wall Street analysts expect the stock to hit $8.30 in the near term, which indicates a potential 301% upside.
CMPS shares were trading at $35.24 per share on Thursday morning, up $1.77 (+5.29%). Year-to-date, CMPS has declined -26.03%, versus a 21.46% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
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