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Introduction

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.

This article identifies the 9 different psychedelic substances being studied by companies involved in clinical-stage research for the treatment of mental health conditions and the names of those companies doing research with each of those substances.

1. Ketamine

Ketamine, used primarily as an anesthetic in veterinary clinics, is the only psychedelic drug that is broadly legal today. Unfortunately, it has had the reputation of being used as a date rape or sexual assault drug (and referred to in those circles as Special K, Cat Valium or Kit Kat) as it can be slipped unnoticed into a drink causing the consumer to experience a loss of muscle function combined with only a dream-like awareness of what’s happening and not to being able to remember what happened the next day although they may have flashbacks of the event several weeks later.

The above being said, ketamine is now being used to treat chronic pain, alcohol withdrawal management, and depression despite its addictive properties, toxicity and unpleasant hallucinogenic properties.

 Go here for much more extensive information on Ketamine.

The public companies currently involved in ketamine-based clinical-stage research are:

1. atai Life Sciences N.V. (ATAI), with a market capitalization of $850M, is backing multiple ketamine-related ventures and is focused on treatment for treatment resistant depression (TRD)
2. PharmaTher Holdings Ltd. (PHRRF), with a market cap of $25M, has a proprietary portal, KetaVault, offering access to extensive ketamine clinical and regulatory data, aimed at accelerating new therapies and commercialization and is focusing on treatments for depression, Parkinson's and anesthesia.

2. Psilocybin

Psilocybin, the primary psychoactive ingredients in “magic mushrooms”, is the most widely-researched psychedelic substance today due to its minimal toxicity, non-addictive nature and powerful medicinal effect of generating new neural pathways that allow different regions within the brain to communicate in new and more effective ways.

 Go here for much more extensive information on Psilocybin.

The major public companies involved in psilocybin research are:

1. atai (see above)
2. COMPASS Pathways plc (CMPS), with a market capitalization of $391M, is focusing on treatments for treatment resistant depression (TRD), anorexia and post-traumatic stress disorder (PTSD) and has a synthetic psilocybin formulation in Phase 3 trials for TRD.
3. Mind Medicine (MindMed) Inc. (MNMD), with a market capitalization of $730M, is focusing on treatments for anxiety, depression and ADHD, and has a psilocybin analog in Phase 2 trials
4. Cybin Inc. (CYBN), with a market capitalization of $156M, is focused on treatments for depression and anxiety, and has a modified (deuterated) psilocybin molecule in Phase 2 and a Phase 3 study evaluating the adjunctive treatment of major depressive disorder.

3. MDMA

MDMA refers to 3,4-methylenedioxymethamphetamine and is more commonly known by its street drug name, "Ecstasy" or "Molly", has a strong safety profile, produces feelings of emotional warmth, an increase in self-awareness and in empathy which make it a natural fit in those severely traumatized individuals with PTSD.

Go  here for much more extensive information on MNMA.

The 2 public companies involved in MDMA research are atai Life Sciences and MindMed.

4. LSD

LSD, known by its street drug name “acid”, is non-toxic and non-addictive and, along with psilocybin, is the most-researched psychedelic drug and, as such, its medicinal applications are generally more advanced than with other psychedelics.

Go here for much more extensive information on LSD

MindMed Inc. (MNMD) has a LSD-based therapy in Phase 3 for generalized anxiety disorder (GAD).

5. Ibogaine

Ibogaine, a natural psychedelic drug derived from the iboga shrub, is much more toxic than psychedelics like psilocybin, MDMA and LSD, presenting some cardiac risks as well as other side effects such as seizures, paralysis and difficulty breathing although Ibogaine presents minimal health risks in a controlled medical setting. Despite these risks, however, research has shown that Ibogaine exhibits unique properties in neutralizing addictive cravings.

Atai holds a stake in DemeRx, a private biotech company, is developing noribogaine, a metabolite of ibogaine with fewer cardiac risks, for opioid dependence, giving Atai indirect exposure to ibogaine research.

6. DMT

Dimethyltryptamine (DMT), an extremely potent psychedelic compound, is the synthetic version of ayahuasca. Because of its potency, DMT research is still at an early stage but it offers important commercialization advantages in that it produces a rapid onset and a brief trip compared to experiential therapies using other psychedelic drugs that require expensive, multi-hour, supervised sessions by trained medical professionals. A DMT “trip” and therapy session can be over in under an hour making such a treatment much cheaper than other psychedelic drugs, raising the prospect for greater patient affordability and greater resultant appeal to health insurers.

Go here for much more extensive information on DMT.

The 2 public companies involved in DMT research are:

1. Algernon Pharmaceuticals Inc. (AGNPF), with a market capitalization of $1.7M, has partnered with Yale University to study DMT for depression with a primary focus on stroke recovery.
2. Entheon Biomedical Corp. (ENTBF), with a market capitalization of only $1.0M, has a clinical trial in the Netherlands investigating safety and pharmacokinetics.

7. Mescaline 

Mescaline is a naturally occurring psychoactive alkaloid with hallucinogenic properties derived from the peyote cacti but it can be synthetically manufactured. It’s known for its long duration (8+ hours) and deep introspective effects, which may offer unique benefits for treating depression, PTSD, and addiction. 

MindMed has received approval for a Phase 1 clinical trial in Switzerland to study the acute effects of mescaline, compared to  LSD and psilocybin,  and its interaction with the serotonin 5-HT2A receptor, which is central to psychedelic experiences. It is the first study to systematically investigate mescaline in humans using validated psychometric tools.

8. 5-MeO-DMT

5-MeO-DMT, which stands for 5-MethOxy-N,N-DiMeThyltryptamine, is a powerful analog of DMT and better known by its nick name, "The Toad", as it is derived from dried venom secreted by the Sonoran Desert (Bufo Alvarius) toad. The Toad produces hallucinogenic experiences that create a sustained enhancement of satisfaction with life, and the easing of anxiety, depression and post-traumatic stress disorder (PTSD).

1. GH Research PLC (GHRS), with a market capitalization of $793M, has an inhaled formulation in Phase IIb trials for the treatment of TRD..
2. Biomind Labs Inc. (BMNDF), with a market capitalization of only $1.2M, is focused on the treatment of depression and anxiety, and has a sublingual 5-MeO-DMT in Phase I/II trials.

9. MEAI

MEAI is short for 5-Methoxy-2-aminoindane, a psychoactive compound which produces a mild euphoric, alcohol-like tipsy experience and reduced desire to consume alcoholic beverages. As such, MEAI shows promise for Alcohol Use Disorder, binge eating. and other compulsive behaviors.

The only company researching the possible benefits of MEAI is Clearmind Medicine, Inc. (CMND), which  a market capitalization of $5.1M, and has a MEAI-based compound in preclinical and early clinical development. 

Conclusion

Of the 10 companies researching the possible benefits of treatable mental health disorders and addiction/substance abuse MindMed is involved in the research and development of 5 different psychedelic-based compounds and Atai is involved in 4. The other 8 companies are involved in just 1 compound each. The 5 companies with the largest market capitalizations (averaging $584M) are included in our Pure-play Psychedelic-based Stocks Portfolio (see here). The other 5 companies only have market caps ranging from $1.0M to $25.0M.