Thursday , 18 August 2022

Psychedelic Stocks: DOWN -41% YTD; DOWN -79% From 2021 Peaks

Of the one hundred (100) psychedelic and marijuana drug companies in the clinical stages of research and development of treatments for a wide variety of mental illnesses, 40 are based on the use of marijuana THC, and 60 (see here) based on the use of one or more of 10 different psychedelic substances (read 10 Psychedelic Substances And The 36 Companies Researching Them).

By Lorimer Wilson, Founder & Managing Editor of munKNEE.com – Your KEY to making money!

About the Psychedelics Market

Roughly 2 billion people, world wide, suffer from some form of a treatable mental health disorder and addiction/substance abuse therapy could easily prove to be the biggest investment driver of psychedelic stocks over the long term, supported by the high degree of insurance coverage available for addiction therapy. Data Bridge Market Research forecasts that the global psychedelics market will grow from $2.1B in 2019 to $6.9B by 2027 which represents a 3.3 times increase in just 7 years.

The munKNEE Psychedelic Compounds-Based Stocks Index

Below are the updated performances of the Index constituents since the end of March in descending order, along with their performances year-to-date and from their 2021 highs. In addition, the Chance of Financial Distress numbers are sourced from macroaxis.com and the Analyst Consensus data from stockanalysis.com.

Group 1 (market caps between $70M and $150M)

  1. Field Trip (FTRP): UP +5.2% month-to-date; (DOWN -42.7% YTD); DOWN -78.3% from 2021 high
    • focused on building centers for psychedelic therapies across North America and Europe
      • Chance of Financial Distress in next 2 years: +67%
      • Analyst Consensus: 10 stock analysts currently rate FTRP as a BUY.
  2. Cybin (CYBN): DOWN -2.4%; (DOWN -33.3% YTD); DOWN -74.8% from 2021 high
    • 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.
  3. Numinus (NUMIF): DOWN -4.7%; (DOWN -4.8% YTD); DOWN -73.0% from 2021 high
    • 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: +39%
      • Analyst Consensus: No analysts following NUMIF
  4. Seelos (SEEL): DOWN -4.8%; (DOWN -50.9% YTD); DOWN -87.3% from 2021 high
    • 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: +52%
      • Analyst Consensus: 12 stock analysts currently rate SEEL as a BUY.
  5. Allied Corp. (ALID): DOWN -12.6%; (DOWN -41.2% YTD); DOWN -57.3% from 2021 high
    • 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: +24%
      • Analyst Consensus: No analysts following ALID
  6. Zynerba Pharmaceuticals (ZYNE): DOWN -16.6%; (DOWN -40.6% YTD); DOWN -80.5% from 2021 high
    •  focused on developing and commercializing proprietary next-generation synthetic cannabinoid therapeutics formulated for transdermal delivery
      • Chance of Financial Distress in next 2 years: 6%
      • Analyst Consensus: 12 stock analysts currently rate ZYNE as a BUY.

The 6 constituents in Group 1 are DOWN -7.4% so far in April, on average, and are now DOWN -41.0% YTD and DOWN -78.8% from their average peaks in 2021.

Group 2

The performance of the 2 stocks in this Group are presented below in descending order since the end of March in descending order, along with their performances year-to-date and from their 2021 highs.

  1. GH Resources (GHRS): UP +14.1%; (DOWN -21.0% YTD)
    • Chance of Financial Distress in next 2 years: +39%
    • Analyst Consensus: 10 stock analysts currently rate GHRS as a BUY.
  2. Compass Pathways (CMPS): DOWN -5.8%; (DOWN -41.7% YTD)
    • Chance of Financial Distress in next 2 years: +58%
    • Analyst Consensus: 17 stock analysts currently rate CMPS as a BUY.
  3. Atai (ATAI): DOWN -8.0%; (DOWN -33.3% YTD)
    • Chance of Financial Distress in next 2 years: +52%
    • Analyst Consensus: 19 stock analysts currently rate ATAI as a BUY.
  4. Mind Medicine (MNMD): DOWN -9.0%; (DOWN -19.6% YTD)
    • Chance of Financial Distress in next 2 years: +62%
    • Analyst Consensus: 8 stock analysts currently rate MNMD as a BUY.

The 4 constituents in Group 2 are UP +2.1%, on average, so far in April but are still DOWN  -31.6%, on average, YTD, and DOWN -65.8% from their average peaks in 2021.

A Word of Caution

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