Forget the sundial producers: put this psychedelic stock on your radar


Producers of sundials (NASDAQ: SNDL) a few months ago, it entered the investment scene in a major way. It became one of the hottest meme stocks with a gain since the beginning of the year of more than 90%. But while the sundial has garnered a lot of attention, there are some stocks that could offer better growth prospects that aren’t so well known.

Stocks of companies developing psychedelic drugs aren’t as much in the limelight as stocks of marijuana. Some of these companies, however, are worth a look. Cybin (OTC: CLXP.F) is a prime example. Forget about the sundial producers – put this psychedelic stock on your radar.

An hand drawing of the chemical structure of psilocybin.

Image source: Getty Images.

Introducing Cybin

You might not have heard of Cybin yet. The company transferred its shares to the OTCQB Venture market less than two months ago. The stock was previously traded on the over-the-counter Pink Leaves in the United States and listed on the Canadian NEO Exchange in November 2020.

But several large venture capital funds know Cybin well. Janus Henderson, LifeSci Ventures and RA Capital are key shareholders of the company.

Cybin’s pipeline includes four psychedelic drug programs. The company is currently evaluating its lead candidate, the sublingual psilocybin drug CYB001, in a Phase 2 clinical trial as a potential treatment for major depressive disorder (MDD). It also has two preclinical candidates, CYB003 and CYB004, both of which are deuterated versions of tryptamine. In addition, Cybin is studying the use of phenethylamines as a potential treatment for neurological disorders.

Cybin announced an agreement earlier this year to use CatalentZydis orally disintegrating tablet technology to deliver CYB003. It plans to file an Investigational New Drug (IND) application with the United States Food and Drug Administration (FDA) later this year to advance investigational therapy into early-stage clinical trials in the treatment of related disorders. to alcohol consumption.

Huge potential

How promising is Cybin’s pipeline? Roth Capital analyst Elemer Piros launched a hedge on the stock this week with a buy recommendation and a price target of $ 10. That’s over six times the current Cybin share price.

There are two main reasons to be optimistic about Cybin’s prospects. More importantly, studies have shown that psychedelic molecules have the potential to be effective in treating a wide range of conditions, including addiction, depression, and post-traumatic stress disorder.

If Cybin’s psychedelic drug candidates ultimately get regulatory approvals, the market opportunities are enormous. The National Institute for Mental Health estimates that the direct and indirect costs of mental disorders in the United States are $ 467 billion.

The global opportunities are even greater. The National Center for Biotechnology Information estimates the global total direct and indirect costs of mental disorders at nearly $ 2.5 trillion.

One to watch

To be sure, Cybin still has a long way to go with plenty of obstacles ahead of him. The risks of failure of the company’s clinical studies should not be overlooked.

Cybin is not currently generating revenue and is unprofitable. Like Sundial Growers, the company had to raise additional capital through stock offerings. It seems likely that more of these will be on their way in the future, which means the value of Cybin’s shares could be diluted.

Clinical stage life sciences actions like Cybin will not suit many investors. They are very volatile and risky. Of course, this is also true for unprofitable cannabis stocks like the sundial. For aggressive investors, however, Cybin seems like a stock to watch out for.

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Keith Speights has no position in any of the listed securities. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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