Follow The Money: US$500+ Million In New Psychedelics Financing Powering Massive Growth

 Earlier this week, Psychedelic Stock Watch published an update on overall progress in the psychedelic drug industry. Psychedelics Revolution Gaining Breadth And Momentum

We touched on everything from drug development to drug legalization. Included in that analysis was a detailed look at recent financings in the psychedelic drug industry.

A regular theme in our coverage of the psychedelics industry can be summed up in three words.

Follow the money.

Why does Psychedelic Stock Watch continue to shine its magnifying glass on that aspect of the sector?

  1. This is a capital-intensive industry
  2. Tracking financings in an emerging industry is an excellent gauge of growth for both individual companies and the overall sector

With these two factors in mind, we have compiled financial data on recent public offerings for the leading players among both public companies and private corporations/institutions.

Big dollars chasing a big opportunity

We went back roughly 4 months, from the time of the Compass Pathways IPO to the present. That IPO really ignited the sector in the middle of September – and financial activity since then clearly illustrates this.

Over US$500 in raised in ~4 months. Of that total, US$371 million was raised by public companies.

Those sorts of capital flows into small-cap stocks would be impressive for even a mature industry. 

None of these companies even existed as pubcos a year ago. To see capital flows like this into an emerging industry in (literally) its first year of existence is virtually unheard of.

But the massive quantities of dollars are only half the story. Perhaps even more illuminating is to track the progress of these financings for individual companies.

Compass Pathways (US: CMPS)

Compass Pathways immediately got the attention of the market with its IPO financing. A $120 million offering was upsized to $146.6 million. And then the company’s stock price quickly doubled in early trading.

While Compass itself has been somewhat quiet since that time, its big IPO financing greased the wheels for the whole industry in raising capital.

Over this period of time, two public companies have each announced three new financings.

MindMed Inc (CAN: MMED / US: MMEDF / GER: MMQ)

On October 30, 2020, MindMed closed on an oversubscribed private placement of CAD $28.75 million. Units were priced at CAD$1.05.

On December 11, 2020, MindMed closed on an oversubscribed private placement of CAD$34.75 million. Units were priced at CAD$1.90.

On January 7, 2021, MindMed closed on an oversubscribed private placement of CAD$92.1 million. Units were priced at CAD$4.40.

In a span of less than 2 ½ months, MindMed:

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Disclosure: 

 

The writer holds shares in MindMed Inc, Numinus Wellness, Cybin Inc and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock ...

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