What’s driving psychedelic stocks?

Interest in psychedelics stocks isn’t going away; in fact, it seems to be increasing with every new breakthrough announcement. The last few weeks continued to deliver new developments that kept many investors’ attention focused on the psychedelics sector. 

High-profile research agreement could lead to significant revenue

Mydecine is one psychedelics company that’s had a busy couple of months. One of the big events that raised the profile of its stock was the announcement that the company is entering a 5-year research agreement with Johns Hopkins University School of Medicine1.

The multi-site project is set to run Phase 2-3 studies on using psychedelics to treat smoking addiction. It’s noteworthy even before any results are announced, because it scored federal funding through the National Institute of Drug Research (NIDA).2 “This marks the first time in over 50 years that the U.S government has funded a study of a psychedelic compound for therapeutics,” commented Joshua Bartch, CEO of Mydecine3.  

Success in this project could be very lucrative. The market for smoking cessation treatments is estimated to reach $64.5 billion by 20264, giving Mydecine plenty to draw on. Traditional therapies like nicotine patches see quit rates of around 10% to 35% in controlled trials, but their success in real life use cases is far lower5. In contrast, Bartch says that early Mydecine trials saw success rates 3-5x those of traditional treatments, together with a much safer drop in nicotine levels6. If these results are sustained in the upcoming trials, it could make investors in Mydecine stock extremely happy.

Analysts at Roth Capital Partners predict that with just a small market penetration of 0.5%, “Mydecine can achieve around $2.5 billion in sales, five years following launch in 2026.7” Bartch expects to have a drug on the market even earlier, by 2024, so he could be presiding over multi-dollar stocks in just a few years.8 Roth Capital analysts agree, stating that “MYCO-001 could become the first psilocybin therapy to be approved for any indication.9

Mydecine has more good news

As well as the new research agreement, Mydecine shared more good news in its third quarter business update and financial results report. In the last few months, the company filed for 3 new patents with the FDA. Two are for new formulations: MYCO-003, which aims to address anxiety and PTSD, and new MDMA-like compounds. The third is a technology patent for utilizing nanoemulsion technology to produce psychedelics treatments from traditional medicines.10

While the company couldn’t report a profit, that’s par for the course for psychedelics stocks, all of which are still in development mode. Mydecine was able to note that net loss has narrowed to $4.5 million, or 4 cents per share, down from 5 cents per share in Q3 2020. The company does have revenue coming in from its MindLeap virtual health platform, and just launched an update in the form of MindLeap 2.0.11 Mydecine also has a sizeable cash cushion of around $7 million, further reassuring investors12

In the wake of these announcements, Roth Capital Partners have given Mydecine a high rating, estimating that its probability-adjusted, fully taxed (21%) NPV (15% discount rate) potential cash flows through 2035 could be around $1.1 billion, and called its third-quarter financial results “well-precedented.”13

Compass enjoys a boost from study results

Although more than one psychedelics ETF has had a rough few months, promising news from some companies have helped lift their stock prices.14

Compass Pathways, and its parent company Atai Life Sciences, are seeing the impact of early results from its larger phase IIb clinical trials of COMP360 psilocybin therapy for treatment-resistant depression. So far, the trials have proved their primary endpoint for the highest dose of COMP360, Compass’ leading drug candidate. A 25mg dose of the formulation delivered a highly statistically significant and clinically relevant reduction in depressive symptom severity after three weeks, with a rapid and durable treatment response.15 

 The news revived Compass stock, which spent most of the summer in the mid-$30 mark, and boosted it to $50 before it settled at $4316. Analysts say that ongoing results could move Atai stock 29% by December 17, and Compass could show an even greater range of 57% by the same date17. Zack Jones, analyst at The Dales Report, writes “This news has the potential to further advance the reputation of both the brand and the psychedelic therapeutics industry for investors.18

All 11 analysts covering Compass rate it a buy, and 10 of the 11 following Atai rate it similarly.19

Revive and Cybin have good news

Other promising announcements came from Revive Therapeutics and Cybin. 

Revive announced positive results from a trial using thiol drugs such as Bucillamine, which are psychedelics compounds, on COVID-19. The trial showed that Bucillamine inhibits the more virulent Delta strain of SARS-CoV-2 infection in vitro, and also lowers SARS-CoV-2-related lung injury in vivo. It has provided a strong rationale for further trials that systematically deliver thiol drugs to treat COVID-19, and is expected to give a boost to Revive’s stock prices.20

Meanwhile, Cybin received a Schedule I manufacturing license from the Drug Enforcement Agency (DEA) in the US, enabling Cybin’s scientists to study and work with Schedule I controlled substances in its own lab in Boston, instead of outsourcing its R&D work to licensed research organizations in Canada, the UK, and the US. With its own DEA license, Cybin intends to expand its R&D capabilities to advance innovation in Schedule I drug development and discovery.1

Psychedelic ETFs could perk up

Like a cannabis ETF, it’s worth remembering that psychedelics stocks are still a speculative and high-risk investment with barely any companies showing significant revenue as yet. That said, and again like people who invest in a weed ETF, investors in psychedelic companies’ stock are showing their belief that these substances, which only a few years ago were the preserve of druggies and dropouts, hold potential treatments for mental health conditions like depression, anxiety, and PTSD, which currently have no effective, long-lasting treatment that doesn’t come along with considerable side effects. 

Investing in a psychedelics ETF offers a way to take part in this exciting and disruptive sector while spreading their investment over a number of promising psychedelics stocks and thus helping to mitigate exposure to risk.  


1  “Mydecine Reports Third Quarter 2021 Financial Results and Provides Business Update” November 16, 2021 https://www.mydecine.com/investors/news-events/press-releases/detail/85/mydecine-reports-third-quarter-2021-financial-results-and 

2  Tweet, Matthew W. Johnson, September 20, 2021 https://twitter.com/drug_researcher/status/1440001296266838019?s=21 

3  “Mydecine Reports Third Quarter 2021 Financial Results and Provides Business Update” November 16, 2021 https://www.mydecine.com/investors/news-events/press-releases/detail/85/mydecine-reports-third-quarter-2021-financial-results-and 

4  “What’s Driving Psychedelic Stock Mydecine (MYCO, MYCOF) $3 Analyst Target?” October 14, 2021 https://www.youtube.com/watch?v=j-Y2f3-Z7XY 

5  “Roth says Mydecine 3Q results ‘well-precedented’; reiterates Buy rating and $3 price target” November 17, 2021 https://www.proactiveinvestors.com/companies/news/966592/roth-says-mydecine-3q-results-well-precedented-reiterates-buy-rating-and-3-price-target-966592.html 

6  “What’s Driving Psychedelic Stock Mydecine (MYCO, MYCOF) $3 Analyst Target?” October 14, 2021 https://www.youtube.com/watch?v=j-Y2f3-Z7XY 

7  “Roth says Mydecine 3Q results ‘well-precedented’; reiterates Buy rating and $3 price target” November 17, 2021 https://www.proactiveinvestors.com/companies/news/966592/roth-says-mydecine-3q-results-well-precedented-reiterates-buy-rating-and-3-price-target-966592.html 

8  “What’s Driving Psychedelic Stock Mydecine (MYCO, MYCOF) $3 Analyst Target?” October 14, 2021 https://www.youtube.com/watch?v=j-Y2f3-Z7XY 

9  “Roth says Mydecine 3Q results ‘well-precedented’; reiterates Buy rating and $3 price target” November 17, 2021 https://www.proactiveinvestors.com/companies/news/966592/roth-says-mydecine-3q-results-well-precedented-reiterates-buy-rating-and-3-price-target-966592.html 

10  “Mydecine Reports Third Quarter 2021 Financial Results and Provides Business Update” November 16, 2021 https://www.mydecine.com/investors/news-events/press-releases/detail/85/mydecine-reports-third-quarter-2021-financial-results-and 

11  “Mydecine Reports Third Quarter 2021 Financial Results and Provides Business Update” November 16, 2021 https://www.mydecine.com/investors/news-events/press-releases/detail/85/mydecine-reports-third-quarter-2021-financial-results-and 

12  “What’s Driving Psychedelic Stock Mydecine (MYCO, MYCOF) $3 Analyst Target?” October 14, 2021 https://www.youtube.com/watch?v=j-Y2f3-Z7XY 

13  “Roth says Mydecine 3Q results ‘well-precedented’; reiterates Buy rating and $3 price target” November 17, 2021 https://www.proactiveinvestors.com/companies/news/966592/roth-says-mydecine-3q-results-well-precedented-reiterates-buy-rating-and-3-price-target-966592.html 

14  “Billionaire-Backed Psychedelic Stocks Await Study for Liftoff” November 2, 2021 https://finance.yahoo.com/news/billionaire-backed-psychedelic-stocks-await-122230434.html?fr=sycsrp_catchall 

15  “COMPASS Pathways announces positive topline results from groundbreaking phase IIb trial of investigational COMP360 psilocybin therapy for treatment-resistant depression” November 9, 2021 https://ir.compasspathways.com/news-releases/news-release-details/compass-pathways-announces-positive-topline-results 

16  “Psychedelic Stock On The Rise: Investors React To COMPASS Pathways Promising Trial Results” November 9, 2021 https://thedalesreport.com/psychedelics/psychedelic-stock-on-the-rise-investors-react-to-compass-pathways-promising-trial-results/ 

17   “Billionaire-Backed Psychedelic Stocks Await Study for Liftoff” November 2, 2021 https://finance.yahoo.com/news/billionaire-backed-psychedelic-stocks-await-122230434.html?fr=sycsrp_catchall 

18  “Psychedelic Stock On The Rise: Investors React To COMPASS Pathways Promising Trial Results” November 9, 2021 https://thedalesreport.com/psychedelics/psychedelic-stock-on-the-rise-investors-react-to-compass-pathways-promising-trial-results/ 

19   “Billionaire-Backed Psychedelic Stocks Await Study for Liftoff” November 2, 2021 https://finance.yahoo.com/news/billionaire-backed-psychedelic-stocks-await-122230434.html?fr=sycsrp_catchall 

20  “TDR’s Top 5 Psychedelic Developments For The Week Of November 15” November 20, 2021 https://thedalesreport.com/psychedelics/tdrs-top-5-psychedelic-developments-for-the-week-of-november-15/ 

21  “Cybin Granted DEA Schedule I Manufacturing License” November 4, 2021 https://thedalesreport.com/psychedelics/cybin-granted-dea-schedule-i-manufacturing-license/