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

  1. Raised CAD$155.6 million (US$121.4 million)
  2. The size of the financings increased by 220%
  3. The price of the financings increased by 319%

Given that this is a capital-intensive industry, what’s the message these financings send to the market?

MindMed has a proven capacity to raise lots of capital. Successive financings have been at much higher price levels.

For institutional and high net-worth investors, this tells them that they can invest in MindMed without fear of going underwater on their investments.

Going back even further, MMED’s May 2020 financing was at a unit price of CAD$0.53. Part of the reason for the extremely strong financing in December was a track record of rewarding participants in previous placements through strong price appreciation.

Mind Cure Health (CAN: MCUR / US: MCURF)

The other public company to have closed on three new financings in roughly the last four months is Mind Cure Health. The company launched its own IPO one trading day after Compass Pathways, on September 21, 2020.

On September 17, 2020, MCUR announced closing an oversubscribed placement for its IPO of CAD$3.0 million. Units were priced at CAD$0.20.

On November 19, 2020, Mind Cure announced closing an oversubscribed private placement of CAD$3.6 million. Units were priced at CAD$0.45.

On January 22, 2020, Mind Cure announced its recent bought deal financing has been doubled to CAD $20 million. Units are priced at CAD$0.60.

In the span of just over 4 months, Mind Cure:

  1. Raised CAD$26.6 million (US$20.7 million)
  2. The size of the financings increased by 567%
  3. The price of its financings increased by 200%

Obviously Mind Cure can’t compete with MindMed – an industry leader – in terms of the quantities of capital being raised. But apart from that, we see a very similar pattern.

Financings are increasing rapidly in size. Investors are being rewarded for their participation through strong increases in unit prices.

Apart from MindMed and Mind Cure, three other public companies in the psychedelics space have announced two financings.

Numinus Wellness (CAN: NUMI / US: LKYSF)

Numinus is another pubco whose recent financings also present a very bullish profile for investors.

On September 10, 2020, Numinus closed on an oversubscribed private placement of CAD$4.6 million. Units were priced at CAD$0.25 with the stock trading slightly below that price on the day the financing was announced.

That bullish signal to investors (along with CMPS IPO) ignited the stock. At its 2020 high (CAD$2.46), it was a ten-bagger from that price level.

On December 29, 2020, Numinus announced the closing of an oversubscribed CAD$17 million bought deal offering. Units were priced at CAD$0.90.

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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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