- Compass Pathways has more than doubled off of its IPO price
- MindMed is up close to 60% over the past three trading days
- Mind Cure Health is the biggest gainer – up 160% in two days
It’s been a big week so far for the psychedelic drug industry – after just two days. And it’s been an exciting week for investors of three psychedelic stocks.
Two new IPOs have produced huge gains for investors. Meanwhile, news of a new listing application has launched the third.
Let’s sum it up Johnny Carson-style.
Answer: Compass Pathways, MindMed Inc, Mind Cure Health.
Question: name the three hottest psychedelic stocks today.
What makes these the three hottest psychedelic stocks? Read on.
Compass Pathways IPO gets the party started (+33.16% today)
Compass Pathways (US:CMPS) is the Big Dog among public companies in the psychedelics space. Its own IPO has launched this rally in psychedelic drug stocks.
CMPS took its initial valuation of ~$550 million and has quickly traded up to unicorn status, reaching a market cap of $1.3 billion.
The attraction of investors for Compass Pathways can be summed up with two drivers:
1) A well-positioned lead drug initiative in a large treatment market that is open for capture
2) Strong financial backing and corporate leadership
Compass’ Phase 2 clinical trial of a psilocybin-based therapy for treatment-resistant depression has been granted
Breakthrough Therapy Designation by the FDA.
Part of the
ATAI Life Sciences stable of
psychedelic drug research partnerships. Strong financial backers include PayPal’s Peter Thiel.
Compass opened this week at $29.70, surging strongly from last week’s IPO price of $17. It’s up another 30% so far this week to $38.39.
MindMed’s NASDAQ application launches stock (+16.95% today)
MindMed Inc (CAN:MMED / US:MMEDF) is
not a new IPO, having had its own trading debut back in March. But the company is looking somewhat “reborn” in the last three trading days.
After trading flat for the past several months – and well off of previous highs – MindMed has suddenly broken out.
After closing last Thursday at CAD$0.44, MindMed has leaped up to CAD$0.69. That’s a an impressive 3-day gain of 57%.
Perhaps more significant is the trading volume. MMED has traded over 10 million shares across the last three sessions. Monday’s volume of 4.88 million shares was the biggest trading day for MMED since the month of its IPO.
Clearly MindMed’s application to up-list has gotten the market excited – coming on the heels of Compass Pathways’ IPO success on the NASDAQ.
But backing this up is the deepest clinical research program among any publicly listed company, Compass Pathways included.
In terms of market performance, this looked like a company in need of a catalyst. And that catalyst is here.
With a market cap (CAD$193.7 million) less than 1/7th as large as Compass Pathways, MindMed can potentially sustain this momentum, right through to its (possible) up-listing on the NASDAQ.
Mind Cure is setting the pace (+57.58% today)
Who is
Mind Cure Health (CAN:
MCUR)?
We provided a heads-up for investors when MCUR commenced public trading Monday morning.
After only two trading days, Mind Cure is outperforming even Compass Pathways in percentage terms. With an IPO price of CAD$0.20, Mind Cure has jumped to CAD$0.52.
That’s a 160% profit from its opening price.
While Compass Pathways and MindMed are the “whales” in the sector among public companies, Mind Cure is still a minnow – with a market cap of CAD$23.5 million.
Like Compass and MindMed, Mind Cure is focused on capitalizing on the Mental Health Crisis. This crisis already costs the global economy
over $1 trillion per year in lost productivity.
Stress-related disorders like depression, anxiety, addiction and PTSD affect over 1 billion people. Cognitive decline health issues (like Alzheimer’s disease) affect 100s of millions of additional people.
Numerous multi-billion dollar treatment markets are on the table. Most offer poor treatment options today and are wide open for new (and better) drug therapies.
While Compass Pathways and MindMed are already into full clinical trials, Mind Cure is beginning its own operations with a functional mushrooms division.
Why?
a) Strong synergies with psychedelic drug development
b) $23 billion market already exists for functional mushrooms
c) Lower burn rate
Even as shroom stocks have traded sideways over the past few months, we’ve been banging the drum about the market potential here.
Psychedelic drugs. Functional mushrooms. A multitude of multi-billion dollar markets.
Altogether, mental health services is
a $225 billion treatment market in the U.S. alone,
according to Statista.
The market snoozed through the summer with respect to psychedelic stocks. But the Compass Pathways IPO was apparently the bugle-call that has roused traders from their slumber.
No less than five publicly traded companies in the psychedelics space racked up double-digit gains today.
Trading volumes have also spiked. Of the high-flyers above, only
Mydecine Innovations (CAN:MYCO / US:MYCOF) has seen higher volume in the weeks prior to this.
Stock prices are up and investors are once again buying.
The psychedelic drug story is a major opportunity that will play out over many years. At the moment, these stocks look ready to run again.
DISCLOSURE: The writer holds shares of MindMed Inc and Numinus Wellness. Mind Cure Health is a client of Psychedelic Stock Watch.
