- Industry-leading research portfolio
- A potential NASDAQ listing on the horizon
- Trading volume has gone ballistic
A torrid week of trading has put a whole, new complexion on the psychedelics space.
Compass Pathways (US:CMPS) is now a bona fide unicorn. By the time it completed its IPO financing, CMPS had traded up to a market cap of over $1.3 billion. No surprise to Psychedelic Stock Watch.
…Further fuel for a potential $1 billion valuation comes from the COVID-19 pandemic itself.
We are already in the midst of a global Mental Health Crisis. Mental health disorders like depression, anxiety, addiction and PTSD afflict over 1 billion people around the world.
A 2018 report from the Lancet Commission estimated that this Crisis will cost the global economy $16 trillion between now and 2030 – from lost productivity alone.
With one company sitting with a billion-dollar market cap already, this raises a natural question. Which psychedelic stock will be next to achieve this valuation?
At this point, one company is the clear favorite to follow in Compass’ footsteps. While Compass Pathways has more than doubled from its initial trading price of $17/share, MindMed Inc (CAN:MMED / US:MMEDF) has been making a similar move.
In the case of MMED, this stock had been building a base for several months.
This was occurring even as reports came out on how the COVID-19 pandemic is exacerbating the Mental Health Crisis.
Regular Psychedelic Stock Watch readers are familiar with the numbers here.
The Mental Health Crisis was already costing the global economy over $1 trillion per year in lost productivity, due to stress-related disorders like depression, anxiety, addiction and PTSD.
The coronavirus pandemic and associated lockdowns have caused rates of depression and anxiety (as well as substance abuse) to skyrocket.
MindMed itself already has a Phase 2 clinical trial underway for an LSD-based treatment for anxiety. Its unique (non-hallucinogenic) ibogaine derivative – 18-MC – is in clinical trials as an opioid addiction treatment.
MindMed was overdue for a breakout. The psychedelics sector had been quiet across the board over the summer, with trading volumes very muted.
All that changed when Compass Pathways commenced trading.
Psychedelic stock feeding frenzy
Last week’s trading was easily the most dynamic performance for psychedelic stocks since the Spring.
Not only did Compass Pathways and MindMed both double, new IPO Mind Cure Health (CAN:MCUR) exploded out of the starting blocks to record a 260% gain in its first week of trading.
Perhaps most encouraging has been the spike in trading volumes.
Compass has seen heavy trading volume since the moment it commenced public trading. So has MindMed. But trading volumes have been up for all psychedelic stocks.
Trading in MMED on Friday exceeded 10 million shares, close to double any other trading day since MindMed went public in March. A true feeding frenzy.
Fueling this stampede into MindMed is more than just the Compass IPO on the NASDAQ. MindMed has announced it is seeking its own NASDAQ listing.
As MindMed broke out last week, Psychedelic Stock Watch framed investor sentiment.
MindMed’s market cap? Even after its two-day run, it’s CAD$195 million (US$148 million).
That may be robust compared to most of the other publicly traded companies in the psychedelics space.
But it’s pretty lean compared to Compass Pathways. As of Monday’s close, Compass has a market cap of US$964 million.
That’s more than a six-bagger from where Compass is presently sitting. And if MindMed shareholders see a NASDAQ listing as the stepping stone that will get them there, who can blame them?
Beyond MindMed’s LSD and 18-MC clinical research on anxiety and addiction (respectively), MindMed has several other research initiatives already in clinical trials – via MindMed’s collaboration with the University of Basel, Switzerland.
Its Leichti laboratory is a world leader in psychedelic drug research.
Unlike most of the Western world, Switzerland never fully closed the door with respect to psychedelic drug research. MindMed has partnered with this research leader on a growing list of psychedelics-based R&D programs.
MindMed gets even hotter
Interest in MindMed is actually accelerating to start this week.
MMED is up another 10% today. And trading volume is on pace to shatter Friday’s record of 10.54 million shares (volume for MMED was at 7.5 million by 12:00 pm EDT).
While psychedelic stocks were doing nothing over the summer, Psychedelic Stock Watch was banging the drum on the growing opportunity for the sector as a whole.
Now the next leg up has started for these shroom stocks.
With investor interest peaking and a potential NASDAQ listing looming on the horizon, MindMed Inc looks poised to pile on more gains. In the process, this could easily become the second billion-dollar psychedelics company.
DISCLOSURE: The writer holds shares in MindMed Inc and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.