The growing enthusiasm around psychedelic drugs as a treatment for mental illness is likely to bring a massive change in this evolving sector. Amid an expanding wave of research studies, people are becoming more aware of the benefits of these drugs as medicines. With that, more companies are also beginning to enter this sector.
Many such psychedelic enterprises are now looking into exploring the public market to raise money for further research on psychedelics.A report by Data Bridge Market Research notes that the global psychedelics sector could expand at a compound annual growth rate (CAGR) of 12.36 per cent between 2021 to 2027. The report suggest that its market size could also clock US$ 10.75 billion in the next six years.
Why mental health is a global issue?
The World Health Organization (WHO) points that mental health issues not only impact the health of an individual but also has economic and social consequences.
Depression remains one of the most significant challenges in recent times, and it alone affects 264 million people in the world. The organization also notes that people with acute mental health issues die prematurely.
How can psychedelics address mental health issues?
A 2020 study by Johns Hopkins Medicine found that two doses of a psychedelic compound called psilocybin produced effective results and reduced depressive symptoms among most participants of the study.
In addition, after showing improvement in the initial phase of the study, half of the study participants achieved remission in a four-week follow-up.
The Johns Hopkins Center for Psychedelic and Consciousness Research explores innovative ways to treat mental health issues through psychedelic drugs. The research program is backed by a funding of about US$ 17 million. The program might expand further to develop new treatments.
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In 2014, a Johns Hopkins study found that people with smoking addiction were able to quit after controlled use of psilocybin.
Food and Drug Administration's take on psychedelics drugs
Many ongoing studies on the use of psychedelics are eyeing medical approval. In May this year, the US Food and Drug Administration (FDA) approved large-scale human trials to find out if MDMA and other psychedelics qualify for the agency's approval for treatment.
While there is uncertainty about the final verdict of the FDA at the moment, this move could boost the psychedelics sector and coax more companies to increase their focus on researches and innovation.
Notably, the FDA gave MDMA a breakthrough therapy designation for post-traumatic stress disorder (PTSD). Market experts believe that this may increase the popularity of this life sciences industry subsector.
Top psychedelic stocks to explore in Canada
- PharmaTher Holdings Ltd Com (CSE:PHRM)
On June 15, 2021, PharmaTher Holdings filed a pre-Investigational New Drug request with the FDA. The biotech company aims to seek support for the clinical development of KETABET, a drug made from the psychedelic compound, ketamine, which reportedly has the potential to treat depression.
PHRM share prices shot up by 178 per cent year-to-date (YTD) and grew 223 per cent in the last six months. On the day of the pre-IND announcement, the stock touched a 52-week high of C$ 0.96 per share.
On Friday, June 25, the shares closed at C$ 0.89 apiece.
- Bright Minds Biosciences Inc (CSE:DRUG)
This biopharmaceutical firm aims to develop drugs for neuropsychiatry disorders. In addition, it is reportedly exploring the psychedelics sector and planning a public debut on the Nasdaq Stock Market.
Bright Minds CEO Ian McDonald said that it is the right time for his company to explore the leading stock exchange as its serotonergic therapeutics is gaining traction.
DRUG stock climbed five per cent quarter-to-date (QTD) and expanded about three per cent in the past week. It closed at C$ 5.8 apiece on June 25.
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- CYBIN Inc. (NEO:CYBN)
On Monday, June 28, CYBIN announced that it had achieved positive pre-clinical results for multiple psychedelic molecules, which might prove to be beneficial for people with mental health issues. The biopharmaceutical company also released annual financials, posting cash and cash equivalents worth C$ 64 million.
The stock gained investor attention on the back of these developments and climbed 6.6 per cent during the trading session on June 28, closing at C$ 2.9 per share.
CYBN stock jumped 46 per cent in the last month and catapulted by 77 per cent in the last three months.
- Field Trip Health Ltd. (TSX:FTRP)
Field Trip Health, which recently debuted on the Toronto Stock Exchange, opened a psychedelic-enhanced therapy centre in Houston in May this year. Earlier in March, Field Trip Health had closed C$ 95 million bought deal financing.
In Q3 2021, Field Trip's revenues from patient services increased by 235 per cent quarter-over-quarter (QoQ). The company posts a market cap of C$ 412 million.
FTRP stock soared by 57 per cent in the last six months and ballooned 23 per cent in the past month. It closed at C$ 7.13 per unit on June 29, and holds a 52-week high of C$ 9.88 (February 11, 2021).
- Numinus Wellness Inc. (TSXV:NUMI)
A provider of integrated health services, Numinus Wellness is also engaged in developing proprietary methods for treating mental illness through psychedelic compounds.
NUMI stock dipped about eight per cent in the last three months. However, it has climbed 4.4 per cent month-to-date (MTD), and the stock might rise further as the focus on the psychedelic sector might increase in future.
At market close on June 28, the scrip was priced at C$ 0.94.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.