An Introduction

While the psychedelic compound-based drug market is expected to triple over the next few years which should create many winning stocks in the years to come, the stocks of the companies involved are having growing pains.

Some Background

Shares of clinical-stage companies developing treatments based on psychedelic compound-based drugs moved lower in early August after the U.S. Food and Drug Administration (FDA) rejected the use of MDMA (5-MeO-DMT or 5-MethOxy-N,N-DiMeThyltryptamine) for post-traumatic stress disorder (Source) as submitted by a private company, Lycos Therapeutics, based on concerns regarding Lykos’ therapy and its clinical trial designs. The FDA noted in their rejection notice, however, that they were still supportive of psychedelic development given that psychedelic drugs showed initial promise as potential treatments for mood, anxiety and substance use disorders.

Future Growth Expectations

Given that the psychedelic compound-based drug market is expected to triple over the next few years many winning stocks are likely to be created and to monitor their progress we have created a Portfolio of the 4 largest such companies by market capitalization as follows:

Our Psychedelic Compound -Based Clinical-Stage Drug Stocks Portfolio

Below are the stock performances of the 4 companies in the Portfolio week-ending September 6th, in descending order, along with their area of focus, market capitalization and any pertinent news, analyses or commentary regarding their performances:

1. Mind Medicine (MNMD): DOWN 1.7% w/e Sept. 6th
   • Company Focus: lead product candidates include:
     • MM-120, which is in phase 2 for the treatment of generalized anxiety disorder and attention deficit hyperactivity disorder, and
     • MM-402, a R-enantiomer of 3,4-methylenedioxymethamphetamine (MDMA), which is in phase I clinical trials for the treatment of core symptoms of autism spectrum disorder.
   • Market Capitalization: $484M
2. atai Life Sciences (ATAI): DOWN 8.5% w/e Sept. 6th
   • Company Focus: Develops and invests in various therapeutics to treat depression, anxiety, addiction, and other mental health disorders and has announced:
     • positive preliminary results from the Phase 1b trial of VLS-01, its proprietary oral trans-mucosal film formulation of mebufotenin that is applied to the buccal surface,
     • plans to initiate a Phase 2 study for the treatment of treatment-resistant depression and
     • plans to initiate a Phase 2 study (EMP-01) of an oral DMT for the treatment of social anxiety disorder by the end of FY’24
   • Market Capitalization: $200M
3. Compass Pathways (CMPS): DOWN 11.4% w/e Sept. 6th
   • Company Focus: CMPS is:
     • in the process of developing COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression and
     • in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa.
   • Market Capitalization: $453M
4. GH Research (GHRS): DOWN 21.6% w/e Sept. 6th
   • Company Focus: engages in developing various therapies (see pipeline here) to treat psychiatric and neurological disorders and focuses on the development of mebufotenin therapies, the new International non-proprietary name for DMT, for the treatment of patients with treatment-resistant depression (TRD).
     • The company’s phase 2b trial for a mebufotenin inhalant has been very successful and is expected to end in the second half of this year
     • and DMT is also being tested in a phase 2a trial for the treatment of postpartum depression (see details here).
   • Market Capitalization: $428M
   • News:
     • GH Research Reports Second Quarter 2024 Financial Results

Summary

On average, the above 4 stocks were DOWN 13.1% w/e Sept. 6th due primarily to GH Resources’  22% decline following a 15.7% decline in August but they remain UP 12.1% YTD.

Thank you for reading the above article. I will update it weekly. Now, as a reward, here is a link to Money, Money, Money—It’s a Rich Man’s World!