Here’s Why Psychedelic Drug Company Stocks Are Expected to See Growth in 2021

Here’s Why Psychedelic Drug Company Stocks Are Expected to See Growth in 2021

Companies developing psychedelic drugs to treat many mental health disorders are hot in the stock market and investors are looking for companies to bank on. Image source: Scottdarbey, CC BY-SA 3.0, via Wikimedia Commons

Psychedelic drugs are rapidly becoming mainstream as various research supports their effectiveness in alleviating mental health problems. Psychedelic drugs such as LSD, psilocybin, ketamine and more are being studied to explore their effects on mental illnesses, like depression.

In the past 10 years, the US has seen a surge in research into the beneficial effects of psychedelic drugs as medicines. However, there was a pause in developments in this field after psychedelic research was banned in the late 1960s. Nevertheless, in recent analyses, the psychedelic drug market in North America is expected to grow with a CAGR of 15.8 percent in the forecast period of 2020 to 2027, and is expected to reach a value of $6,846 million by 2027.

A study of over 30 million psychedelic users in the US was conducted in 2013 by the Norwegian University of Science and Technology. Their results showed that the increased use of psychedelic drugs in the US had a positive effect on demand and that these factors are the functioning drivers for the North American psychedelic drugs market.

There are various companies to look out for in the psychedelic drug industry that are gaining traction with investors. Some include Mind Medicine, Compass Pathways and Champignon Brands.

Mind Medicine

Mind Medicine was the first psychedelic firm to make a public debut on Toronto’s NEO Exchange in early 2020. The company is seeking investment in the use of its 18-MC psychedelic drug candidate as an aid for battling opioid dependency. Rather than substituting one addictive substance for another less-harmful one, they are developing a drug that treats the cause of the brain disease which is addiction.

18-MC is the next-generation version of ibogaine, which is a Schedule 1 substance extracted from the West African iboga shrub with anti-addictive properties that also has the potential to induce heart attacks. 18-MC is a proprietary, orally active and non-hallucinogenic molecule. The drug is in Phase II trials and Mind Medicine’s chief medical officer, Dr. Scott Freeman said in a statement, “our ability to start this trial on schedule speaks volumes to both the efficiency and high caliber clinical development team Mind Medicine has assembled to develop medicines based on psychedelics. Due to the team’s experience, we have an extensive playbook to draw from to manage clinical trials even under the most trying of times.”

The company also has ongoing clinical trials to treat anxiety and adult ADHD using psychedelic-inspired medicines and therapies. According to their investor deck, the company estimates that the global total addressable market for psychedelics exceeds $100 billion.

They recently announced a digital medicine division called Albert that will research, develop and build an integrated technical platform and a comprehensive toolset that will deliver psychedelic-inspired medicines and experiential therapies combined with digital therapeutics.

Mind Medicine has multiple FDA-approved trials that are ongoing in multiple jurisdictions and geographies, along with drug development efforts that include substances such as psilocybin, LSD, MDMA, DMT and their Ibogaine derivative, 18-MC.

Compass Pathways

Compass Pathways is a company focused on psilocybin research and is becoming increasingly popular in the industry. In 2018, the company received a US FDA Breakthrough Therapy designation for psilocybin therapy for the treatment of depression.

Psilocybin is the active ingredient found in some species of mushrooms, which are often referred to as “magic mushrooms.” The company developed a synthetic form of psilocybin, COMP360, which is now in Phase II trials to investigate the effectiveness of the therapy in depression, anxiety, addiction and other mental illnesses. The drug must be administered with psychological support from specialty-trained therapists. Compass Pathways also own the patent for “methods of treating drug-resistant depression with a psilocybin formulation.”

Related: Flow Acquires Halo Neuroscience to Develop Brain Stimulation Technology to Treat Depression

Champignon Brands

Champignon Brands is among the first in the psychedelic medicine field, and they completed their IPO in early 2020. They specifically focus on medicinal mushroom projects which aim to treat a range of mental health problems. The research is led by its Special Advisory Committee, which is working on providing high-quality data, making their stock among the hottest investments in the field.

They are looking at opening clinics for psychedelics such as ketamine, psilocybin and MDMA, throughout the North American continent. It has six ongoing clinical trials in Phase I and preclinical stages and seven patents pursuing ketamine and psilocybin solutions.

The company is pursuing the development and commercialization of rapid onset treatments capable of improving health outcomes in patients with depression, PTSD and substance and alcohol use disorders.

Other Psychedelic Drug Developers

Other active companies in the market include Mind Cure Health Inc., Johnson & Johnson and Field Trip Health. If you missed investing in cannabis, psilocybin research is on a rise despite its current classification as a Schedule 1 substance under the Controlled Substances Act. However, with new research and development of psilocybin drugs and other psychedelics for the treatment of many mental health disorders, these ideas are changing. Just like cannabis, which still has plenty of room to grow, psychedelic stocks are hot in the market and investors are advised to keep an eye on such companies.