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Getting Bullish on Psychedelics Again

Jeff Siegel

Written By Jeff Siegel

Posted February 26, 2024

Prior to the early days of COVID, we started investing in the burgeoning psychedelics industry.

Keeping with our mantra of doing well by doing good, we saw this industry as a highly disruptive industry in the world of mental health diseases.  One that would ultimately help treat millions of people suffering from depression, anxiety, PTSD and addiction.

We made some decent coin on a few of our early picks, and lost some, as well.

It was early days, to be sure, so there was a fair amount of risk.

So after selling our final psychedelics position – a company called MindMed (NASDAQ: MNMD) for a 105.13% gain – we ventured off to the sidelines.  The risk simply outweighed the reward at that point.  But things have been changing.

Since selling our MindMed position, the value of the industry has been bolstered by a couple of significant developments.

Perhaps the most important happened late last year after the FDA agreed to review a psychedelics-assisted therapy as a potential treatment for PTSD following the announcement that Lykos Therapeutics (formerly MAPS Public Benefit Corporation), completed two phase 3 clinical trials that showed MDMA (a psychedelic molecule), was successful in reducing symptoms of PTSD. 

This is the first time this has ever happened, and really marks a turning point for the industry. 

Now shortly after this announcement, the American Medical Association (AMA) announced the  approval of new CPT III codes for psychedelic-assisted therapies.  These codes allow physicians to submit claims to insurance companies for coverage and reimbursement of psychedelic-assisted treatments. 

To be sure, the AMA does not approve these codes without a reason to do so.  This doesn’t guarantee that the FDA will approve the treatment, but it’s certainly a positive indicator. 

Also worth noting is that when we first got into the space, most psychedelic medicine companies were still in pre-clinical and Phase I clinical trials.  Today, there are more than a dozen in Phase II clinical trials and gearing up for Phase III.  

What we’ll likely see towards the end of this year are multiple psychedelics companies successfully completing those Phase II Clinical Trials, then getting acquired (or having their IP acquired) by larger biotech or pharmaceutical companies.

In the coming weeks, I’ll be providing you with more in-depth coverage on new developments in the psychedelics space, as well as some new picks.  So keep a look out for those.

In the meantime, here’s a short list of psychedelics stocks worth checking out …

  • Atai Life Sciences (NASDAQ: ATAI)
  • MindMed (NASDAQ: MNMD)
  • Cybin (NYSE: CYBN)
  • Clearmind (NASDAQ: CMND)
  • Compass Pathways (NASDAQ: CMPS)
  • Seelos Therapeutics (NASDAQ: SEEL)
  • Bright Minds Biosciences (NASDAQ: DRUG)
  • Enveric Biosciences (NASDAQ: ENVB)

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