After Compass Pathways and MindMed, Numinus and Mydecine have advanced operations the farthest in their psychedelic drug R&D among public companies
The two industry leaders among psychedelic stocks have already carved out their own followings among psychedelic stock investors.
Compass Pathways (US:CMPS) is the current market cap leader with a market cap of $1.3 billion. The first psychedelics unicorn.
It has a premier NASDAQ listing, a well-positioned psychedelics clinical research program. And it boasts big-name investors like Peter Thiel and Mike Novogratz as major backers. It raised $127.5 million for its IPO financing alone.
MindMed Inc (CAN:MMED / US:MMEDF / GER:MMQ) is second to Compass in market cap (CAD$300 million). But it’s #1 in terms of the overall depth of its psychedelic drug clinical research program.
After trading sideways for several months, MindMed broke out when CMPS went public – and hasn’t looked back. It has its own high-profile investors (Kevin O’Leary, Bruce Linton) and is seeking to up-list on the NASDAQ.
After that? Former market darling, Champignon Brands (CAN:SHRM / US:CHRMF) remains suspended from trading on the Canadian Securities Exchange due to a significant compliance issue surrounding previous acquisitions.
As investors move down the ladder looking for psychedelic drug investment candidates, two other companies are now emerging: Mydecine Innovations Group (CAN:MYCO / US:MYCOF) and Numinus Wellness (CAN:NUMI / US:LKYSF).
Mydecine Innovations Group
Denver-based Mydecine is next in market cap among currently trading psychedelic stocks (CAD$54 million. It is listed on the Canadian Securities Exchange.
Mydecine is the reincarnation of cannabis company, New Leaf Brands and began doing business as Mydecine Innovations Group in May 2020.
The company has been actively developing its psychedelic drug research platform. Psychedelic Stock Watch previously alerted investors to the Mydecine story.
MYCO went on a run starting in May, going from CAD$0.125 to as high as CAD$1.15. But with sentiment for psychedelic stocks weak over the summer and trading volumes plummeting, MYCO gave back nearly all those gains.
More recently, Mydecine has caught a bid as interest in psychedelic stocks has suddenly and rapidly heated up. After getting an initial bump on the Compass IPO, MYCO traded sideways for a couple of weeks.
Then, after closing at CAD$0.23 on October 6th, the stock has been on a tear. It has risen over 50%, trading as high as CAD$0.385.
Most importantly, trading volume has spiked to all-time highs, including back-to-back days above 7 million shares traded.
What has generated this enthusiasm? Apart from generally improving investor sentiment, MYCO got major traction on its announcement of the filing of a provisional patent for psilocybin delivery technology.
With vertically integrated operations (including a 7,500 sq. ft. R&D facility), Mydecine has recently released news on its psychedelics mobile app as it works on developing its psychedelics telemedicine platform. The company is also looking to extract value for shareholders by spinning out its cannabis assets.
Vancouver-based Numinus shares both similarities and differences with Mydecine.
The market caps are similar: CAD$42 million (Numinus) to CAD$54 million (Mydecine). NUMI also had a previous spike, soaring to CAD$1.55 on its IPO day, May 20th.
Like MYCO, NUMI gave back those gains. And like Mydecine, Numinus has now also recently taken off – starting on the exact same day.
After NUMI closed at CAD$0.265 on October 6th, its stock has jumped as well. Numinus has been steadily rising over the last week. It was up again yesterday to CAD$0.36. Trading volume has been heavy.
With Numinus, investor sentiment seems to have been particularly stoked by news that the company has launched its own psilocybin cultivation.
Like Mydecine, Numinus also has a vertically integrated business model. Its three divisions, Numinus Health, Numinus R&D, and Numinus Bioscience encompass psilocybin cultivation, psilocybin-based clinical treatment, and its own psychedelic drug R&D.
Numinus is one of the only psychedelics companies in Canada to be licensed for psilocybin-based research.
Mydecine seeking to raise capital?
Two psychedelics companies that are quite similar on paper. Investors looking to create a basket of psychedelic stocks may see room in their portfolio for both.
One significant difference for investors is capital.
Numinus closed on an oversubscribed private placement of CAD$4.6 million on September 10th. Mydecine hasn’t raised any capital since its CAD$2.0 million financing in May.
It’s likely that Mydecine will be seeking to do a raise in the near future. Numinus, on the other hand, has no immediate capital needs.
For investors looking to acquire positions in both companies, or simply having a hard time choosing between the two, Numinus may be the better bet today.
Investors looking to enter Mydecine can take a more patient approach. They can wait for news on a Mydecine financing as a good window for entry.
The risk, of course, is that with investor sentiment in psychedelic stocks so strong at the moment, it could be a pretty narrow window for MYCO.
When MindMed just announced a CAD$25 million bought deal financing, the drop in share price lasted for less than a day. After falling (momentarily) below CAD$1, MMED bounced back strongly to close at CAD$1.22 on the day of the announcement.
Investors looking to capitalize on the announcement of a Mydecine private placement may need to have their bids placed in advance of any financing. Alternately, accredited investors may simply seek to buy into the placement.
Psychedelic stock rally is broadening
As Psychedelic Stock Watch trumpeted on Monday, the new rally in psychedelic stocks is spreading.
Trading volumes are up across the board. Psychedelic stocks are regularly in the news.
Now Mydecine and Numinus appear to be making their own breakouts.
Two interesting options for psychedelics investors. A nod to Numinus today.
DISCLOSURE: The writer holds shares in Numinus Wellness, MindMed Inc, and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.
Published at Wed, 14 Oct 2020 06:00:04 +0000