Sunday , 3 July 2022

Psychedelic Compounds-Based Stocks Continued To Decline in May

psychedelic stocks

64 (see here) of the 100 clinical-stage psychedelic drug stocks trading on North American stock exchanges research the treatment of a variety of mental illnesses based on the use of 10 different psychedelic substances (read 10 Psychedelic Substances And The 36 Companies Researching Them) and 40 of them research the treatment of illnesses based on the use of THC marijuana.

By Lorimer Wilson, Managing Editor of munKNEE.com and a frequent contributor to eResearch.com, usfinancepost.com, bitgrum.com and talkmarkets.com.

The munKNEE Psychedelic Compounds-Based Drug Stocks Index tracks 6 of the largest clinical-stage startups. They have an average market capitalization of $65.5M, ranging from $106M (Cybin) to $42.5M (Zynerba) and an average stock price of $0.69/share, ranging from $0.96 to $0.30.

Psychedelic Compounds-Based Stocks Index

The constituent performances in May (as of May 27th), YTD and from their peaks realized in 2021 are presented below in descending order:

Group 1 (market caps between US$40M and US$106M)

  1. Cybin (CYBN): UP 12.1% in May; (-45.8% YTD); -79.6% from its market high in 2021 
    • focused on progressing psychedelic therapeutics by utilizing proprietary drug discovery platforms, innovative drug delivery systems, novel formulation approaches and treatment regimens for psychiatric disorders.
    • Chance of Financial Distress in next 2 years: 62%
    • Analyst Consensus: 14 stock analysts currently rate CYBN as a BUY.
  2. Allied Corp. (ALID): no change; (-58.8% YTD); -65.4% from its market high in 2021
    • engaged in the research, development, and production of cannabinoid health solutions in the United States and has a product in a Phase I clinical trial in Columbia for treating post-traumatic stress disorder
    • Chance of Financial Distress in next 2 years: 30%
    • Analyst Consensus: No analysts following ALID
  3. Seelos (SEEL): no change; (-62.0% YTD); -90.2% from its market high in 2021
    • focused on developing products that address significant unmet needs in the Central Nervous System disorders and other rare disorders.
    • Chance of Financial Distress in next 2 years: 73%
    • Analyst Consensus: 12 stock analysts currently rate SEEL as a BUY.
  4. Numinus (NUMIF): DOWN 17.1%; (-31.0% YTD); -80.4% from its market high in 2021 
    • provides clients with testing of controlled compounds such as LSD, ketamine, DMT, MDMA, mescaline, psilocybin and psilocin as well as conducting research of both MDMA and psilocybin to treat PTSD, depression, anxiety, and addiction.
    • Chance of Financial Distress in next 2 years: 24%
    • Analyst Consensus: No analysts following NUMIF
  5. Field Trip (FTRP): DOWN 18.9%; (-65.0% YTD); -86.8% from its market high in 2021 
    • focused on building centers for psychedelic therapies across North America and Europe.
    • Chance of Financial Distress in next 2 years: 54%
    • Analyst Consensus: 10 stock analysts currently rate FTRP as a BUY.
  6. Zynerba (ZYNE): DOWN 30.5%; (-66.0% YTD); -88.8% from its market high in 2021 
    • operates as a clinical stage specialty pharmaceutical company
    • Chance of Financial Distress in next 2 years: less than 2%
    • Analyst Consensus: 12 stock analysts currently rate ZYNE as a BUY.

The 6 constituents in Group 1 were DOWN 13.1% in May, on average, DOWN 60.1% YTD and -85.4% from their average market highs in 2021.

Group 2  (market caps in excess of US$300M)

Their performances are presented below in descending order  for May, YTD and from their peaks realized in 2021:

  1. Mind Medicine (MNMD): UP 8.8% in May; (DOWN 37.0% YTD); -81.4% from its market high in 2021
    • Chance of Financial Distress in the next 2 years: 58%
    • Analyst Consensus: 8 stock analysts currently rate MNMD as a BUY.
  2. Atai (ATAI): DOWN 5.1%; (DOWN 46.7% YTD); DOWN 79.5% from its market high in 2021
    • Chance of Financial Distress in the next 2 years: 4%
    • Analyst Consensus: 19 stock analysts currently rate ATAI as a BUY.
  3. Compass Pathways (CMPS): DOWN 7.2%; (DOWN 61.9% YTD); -82.8 from its market high in 2021
    • Chance of Financial Distress in the next 2 years: 58%
    • Analyst Consensus: 17 stock analysts currently rate CMPS as a BUY.
  4. GH Resources (GHRS): DOWN 34.2%; (DOWN 58.8% YTD); -65.5% from its market high in 2021
    • Chance of Financial Distress in the next 2 years: 58%
    • Analyst Consensus: 10 stock analysts currently rate GHRS as a BUY.

The 4 constituents in Group 2 were DOWN 20.2% in May, on average, DOWN 57.8% YTD and -77.4% from their average market highs in 2021.

When combined with the performance of the 6 stocks in Group 1 the category, in total, was DOWN 19.2% in May, DOWN 58.2% YTD and -79.1% from its average market high in 2021.

A Word of Caution

Most psychedelic companies are clinical-stage startups still in the product research and development of novel compounds, have no products, have no revenue and require a great deal of money to fund their R&D expenses so do your own in-depth due diligence and, hopefully, the information provided above information will help you arrive at a prudent investment decision.

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