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Introduction

This article highlights the performance MTD (as of October 15th), and YTD, of 2 sub-portfolios, totaling 7 constituents, in our model Ai-focused & Psychedelic Compound-based Drug Discovery Stocks Portfolio, the focus of each portfolio, the focus of the constituents in each with their market capitalizations, and the catalyst(s) contributing to their stock price changes.

Our Model Pure-play Ai-focused & Psychedelic Compound-based Drug Discovery Stocks Portfolio

Our Pure-play Ai-focused  Drug Discovery Stocks Portfolio: UP 38.2% MTD; UP 45.4% YTD

• Background: 
  • The pharmaceutical industry is embracing artificial intelligence technology to help in the research and development of new drugs as it is reputed to be up to 250 times more efficient than the traditional method of drug discovery and, as such, holds the potential to reduce timelines for drug discovery, increase accuracy of predictions on efficacy and safety, as well as to create better, and more, opportunities to diversify drug pipelines.
  • In addition, Morgan Stanley believes that AI-powered drug discovery will lead to an additional 50 novel therapies being brought to market over the next decade, with annual sales in excess of $50 billion! In other words, a $50 billion AI drug discovery revolution is underway.
• Constituents:
  1. Absci Corporation (ABSI): UP 64.5% MTD; UP 90.8% YTD
     • Focus: analyzes drug characteristics that may provide therapeutic benefit. (see details here),
     • Market Capitalization; $748M
     • Price Change Catalysts: an AI collaboration with Oracle and AMD, plus bullish insider buying and renewed investor optimism around its AI-driven drug discovery platform.
  2. ​​​​​​​​​​Recursion Pharmaceuticals (RXRX): UP 39.3% MTD; No Change YTD
     • ​​​​​​​Focus: decodes biology by integrating technological innovations to industrialize drug discovery (see details here)
     • Market Capitalization: $3.0B
     • Price Change Catalysts: renewed investor enthusiasm around AI drug discovery, a major AI conference appearance, and strategic partnerships that reinforced its platform’s credibility.
  3. ​​​​​​​AbCellera Biologics (ABCL​​​​​​​): UP 21.3% MTD; UP 108.2% YTD
     • ​​​​​​​Focus: searches for antibodies from natural immune responses which are then outsourced to their partners. (see details here)
     • Market Capitalization: $1.8B​​​​​
     • Price Change Catalysts: a milestone revenue beat, the launch of its first clinical trial, and growing investor confidence in its transition to a clinical-stage biotech.

Our Pure-play Psychedelic Compound-based Drug Discovery Stocks Portfolio: UP 7.7% MTD; UP 112.5% YTD

• ​​​​​​​Background: 
  • Roughly 2 billion people, world wide, suffer from some form of a treatable mental health disorder and addiction/substance abuse and could easily prove to be the biggest investment driver of psychedelic stocks over the long term, supported by the high degree of insurance coverage available for addiction therapy.
  • Addiction/substance abuse therapy provides the most long-term commercialization potential for psychedelic drugs given the more than 1 billion nicotine addicts, 107 million alcoholics and 71 million drug use abusers worldwide and the +7.6 million deaths per year directly attributable to such substance abuse/addiction. In comparison, depression and PTSD lead to approximately 800,000 suicide deaths per year, a shockingly high number, but dwarfed by the death toll from substance abuse.
• Constituents:
  1. Compass Pathways (CMPS): UP 19.2% MTD; UP 80.7% YTD
     • Focus: treatments for anorexia and post-traumatic stress disorder (PTSD), and treatment resistant depression  (TRD), and has a synthetic psilocybin formulation in Phase 3 trials for TRD.
     • Market Capitalization; $655M​​​​​​​
     • Price Change Catalysts: a major analyst upgrade, political tailwinds for psychedelic therapies, and renewed investor optimism around its mental health pipeline.
  2. ​​​​​​​Atai Life Sciences (ATAI): UP 12.9% MTD; UP 348.9% YTD
     • Focus: 
       • ​​​​​​​It is generally considered a pure-play psychedelic stock, but unlike its peers, operates more like an incubator, investing in, and/or acquiring stakes in, promising psychedelic startups giving it broad exposure across the psychedelic landscape. 
       • it is backing multiple ketamine-related ventures and is focused on treatment for treatment resistant depression (TRD), anorexia and post-traumatic stress disorder (PTSD) and has a synthetic psilocybin formulation in Phase 3 trials for TRD.
     • Market Capitalization; $1.3B​​​​​​​
     • Price Change Catalysts: a positive Phase 2b trial results for its lead compound BPL-003 and a bullish analyst initiation projecting over 125% upside.
  3. ​​​​​​​Mind Medicine (MNMD): UP 7.5% MTD; UP 89.1% YTD
     • Focus: Its pipeline is focused on a proprietary formulation of LSD, currently in Phase 3 trials for generalized anxiety disorder and major depressive disorder, and an MDMA-like compound in Phase 1 trials, targeting core symptoms of autism spectrum disorder and has a psilocybin analog in Phase 2 trials
     • Market Capitalization; $963M​​​​​​​
     • Price Change Catalysts: multiple analyst upgrades, including a “Strong Buy” rating from Lifesci Capital and bullish coverage from Needham, projecting over 115% upside.
  4. ​​​​​​​​​​​​​​GH Research (GHRS): UP 1.4% MTD; UP 107.1% YTD
     • Focus: Its pipeline is focused on 5-MeO-DMT (also known as mebufotenin).targeting treatment-resistant depression, bipolar II disorder, and postpartum depression.
     • Market Capitalization; $899M​​​​​​​
     • Price Change Catalysts: bullish analyst coverage, progress on resolving an FDA clinical hold, and growing optimism around its lead compound GH001 for treatment-resistant depression.

​​​​​​​​​​​​​​Sum Total: UP 15.6% MTD; UP 86.0% YTD

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