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

More than three times as much cash raised. Unit price was also over three times higher. The pattern continued.

Field Trip Health (CAN: FTRP / US: FTRP)

Field Trip has also closed on two successful financings. On October 6, 2020, Field Trip Health commenced public trading. The company closed on a CAD$11 million financing for its IPO transaction. Units were priced at CAD $2.00.

On January 5, 2021, Field Trip closed on an oversubscribed bought deal offering of CAD$20 million. Units were priced at CAD$4.50.

Another psychedelic drug company demonstrating the capacity to successfully raise capital. Investors again rewarded for their participation.

Cybin Inc. (CAN: CYBN)

Cybin somewhat breaks the pattern when it comes to financings for psychedelic stocks.

CYBN commenced public trading in Canada on November 10, 2020 via reverse take-over. As its qualifying transaction, Cybin closed on a massive (oversubscribed) CAD$45 million placement, with units priced at CAD$0.75.

At the time, it was the largest Canadian financing in the entire psychedelics sector. On January 19, 2021, Cybin announced that its recently announced bought deal financing was being upsized to CAD$30 million. Units are priced at CAD$2.25.

Even if the full over-allotment is exercised, the financing will still only total CAD$34.5 million.

A psychedelics company doing a smaller financing?

Clearly, we would need to attach an asterisk to this new offering. After CYBN closed on (at the time) the largest Canadian psychedelics financing, that was a high bar to meet for its next deal.

Also, it’s not necessarily a matter of Cybin not wanting to raise more capital, but rather Cybin not needing to raise more capital.

Even with a unit price that is triple its initial financing price, this placement still increases the share structure. With psychedelics financings closing at rapidly increasing prices, why raise more capital than needed today?

As noted in the graphic above, Novamind Inc (CAN: NM) (CAD$10 million), Revive Therapeutics (CAN: RVV) (CAD$20 million), Mydecine Innovations Group (CAN: MYCO) (CAD$15 million), and Havn Life Sciences (CAN: HAVN) (CAD$11.5 million) have either announced or closed on robust bought-deal offerings of their own.

Altogether, it amounts to a very impressive US$371 million in little more than four months. Throw in the private financings and the sector has raised over half a billion dollars in this span.

Making money in psychedelic stocks

Lots of capital being raised in a series of successful financings. Dollar values and unit prices are steadily increasing. All of these offerings are oversubscribed.

But that’s not the most important takeaway for investors. Investors (by definition) invest to make money.

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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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