Enveric Biosciences Rallies 300% As It Receives US Patents For Psychedelic Compounds

Enveric Biosciences (ENVB) recently rallied on the news that it had received two patent approvals for its novel psychedelic drug class candidates, EB373 and EVM201. The company’s stock increased 300% over several days. The rally is cooling off now, but it is worth diving deeper into the company’s revolutionary research and potential.

Enveric Biosciences is a preclinical and clinical stage biotechnology company. It does not receive revenues nor has it brought any product to market. The company is rated based on the potential of its research pipeline and its current financial situation. I currently rate Enveric Biosciences as a hold and recommend that you watch the company’s future announcements.

When I last covered Enveric Biosciences, the company was focusing on cannabinoids and their use in the treatment of cancer. In 2021, the company acquired MagicMed and received a new catalog of psychedelic compounds. Since then, the company has been focusing on these new novel drugs and treatments. Enveric Biosciences is in the process of “spinning off” its cannabinoid segment into a separate publicly traded entity. The company describes itself now as developing novel drug therapeutics for the treatment of anxiety, depression, and addiction disorders.

Patents for Psychedelic Drug Candidates

The US Patent Office notified Enveric Biosciences that its patent application for EVM201 will be granted. This patent is the second one received for the novel compound and its applications. The company had received notice a week earlier about its EB-373 candidate. The title of the patent is as follows: C4-Carboxylic Acid-Substituted Tryptamine Derivatives and Methods of Using. It covers a family of psilocin derivatives, which the company has developed to have rapid onset of action, a controlled effect of action, and a diminishment of unwanted gastrointestinal side-effects.

The compound class is modeled after the psilocybin mushroom, which has a delayed onset of action and long duration of action. The hand-tailored compound changes the onset and duration of the experience. The company also has patent applications for EVM301, which further modifies the action of the same compound class. It inhibits visual hallucinations and only allows for the mental feeling of psychedelic experience. The company feels that EVM301 will promote better neuropathway plasticity, which will help efficacy of treatment.

Psychedelic Medicine and Therapy

Psychedelic therapies for mental illness symptoms are part of a new revolutionary approach to the treatment of mental health disorders. The new approach is specifically tailored to treat drug resistant mental illness symptoms. As the patient undergoes a psychedelic experience, a few things may occur. The patient may relive traumas without activating the fight or flight response or trauma response of the brain and thereby grow new neuropathways for the traumatic memories. 

The treatment works for anxiety because the patient is able to consider irrational fears without necessarily suffering the response to the fears. The deeply emotional experience brings insight into the patient and their outlook on life. There are a variety of drug candidates and treatment approaches currently being developed by different companies. Enveric Biosciences’ current research is in its early stages and its drug candidates are being tested using animal brain models which suffer from depression.

Enveric Biosciences’ Q1-2023 Financial Report

The company reported a net loss of $4.80 million for Q1-2023. The amount has remained the same compared to the previous year’s same quarter. Enveric Biosciences has been downsizing its staff and its reliance on contracted research. The company plans to conduct more in-house research. The “spin-off” of its cannabinoid research is another cost-saving effort. The company reported $12.56 million of working capital and cash on-hand.

Enveric Biosciences raises capital through direct offerings and private placements. In this way, its operations are funded each quarter, which costs around $5 million in expenses. The company will need additional funding in the future in order to conduct clinical stage trials and bring drugs candidates to market. There is nothing out of place with Enveric’s financial performance. Many research stage biotech companies operate in this manner.

Enveric Biosciences’ Stock Price Movements and Valuation

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1-month price performance chart from www.StockCharts.com

The chart above captures the two rallies within a week of each other. The stock price neared $7 per share at its peak. Because of these rallies, the stock price’s 1-month performance is 140%. It is unclear whether the stock price will stay near the $4 price mark. It may return to a previous lower channel. The price has bounced between $1.50 and $3 per share over the last few months. The company’s book value per share is around $5.

Conclusion

Enveric Biosciences has great potential with its novel psychedelic compounds for treating anxiety and other mental symptoms. The company continues to receive US patents for its family of unique compounds. The research and applications for using them in treatment settings is still in its early stages. We should be excited about the new trend in psychedelic medicine. Enveric Biosciences has developed its lead candidates for such treatments. The patents for these compounds may be reassuring to investors that the company will be compensated for a long time as these applications are further developed. For now, I rate the company’s stock as a hold. Investors should at least wait until the current rally subsides before considering a strategy. I recommend that investors watch future developments.


More By This Author:

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Disclosure: I hold a long position with ENVB stock.

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Adam Reynolds 1 year ago Member's comment

Nice! Bullish on $ENVB.