The NEXT Psychedelic Stock To Uplist On The NASDAQ?

• A premier exchange listing can be the turning point for a public company
• In an emerging industry, it can also be a catalyst for the whole sector – as we saw with the Compass Pathways IPO
• We look at the strongest candidates among psychedelic stocks to be next to uplist to the NASDAQ

As all investors in psychedelic drug stocks already know, Canada-based MindMed Inc (US:MNMD / CAN:MMED) recently uplisted to the NASDAQ. Not surprisingly, this had a major impact on the stock.
 

1. The share price immediately more-than-doubled on news of an IPO trading date.
2. Trading volume (in early sessions) is roughly 10X pre-NASDAQ volume.

That’s a pretty big impact. But gaining a premier exchange listing (such as the NASDAQ) means even more than that.

With its primary Canadian listing, MindMed has been very successful in raising capital, having raised $187 million since its inception. But this has been the product of a total of six financings.

In comparison, NASDAQ-listed Compass Pathways (US:CMPS) raised $147 million for its IPO financing alone. The company just announced it is filing a prospectus for a new financing that can be expected to raise in excess of $100 million.

Much more efficient capital-raising. Much more investment capital available.

Atai Life Sciences is preparing to become the 3rd NASDAQ-listed psychedelic stock, having announced its plans to raise another $100 million for its IPO. For investors in psychedelic stocks, this raises an obvious question.

What will be the next psychedelic stock to be listed on the NASDAQ after that?

Best candidates to uplist to the NASDAQ

Putting aside the new companies with intentions to seek a NASDAQ listing, a few Canadian-listed companies can be seen as strong contenders to seek (and hopefully obtain) their own NASDAQ listing.

Cybin Inc (CAN:CYBN / US:CLXPF)
 

• Cybin is also one of the more successful companies in raising capital, having raised ~CAD$88.8 million (US$70 million) since going public last November.
• Cybin has advanced drug R&D, commencing a Phase II clinical trial on a psilocybin-based therapy for Major Depressive Disorder.
• Cybin has received considerable analyst coverage, in both Canada and the U.S.

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

• Field Trip has raised even more capital than Cybin, in excess of US$100 million, including its recent CAD$95 million bought deal financing (US$76 million).
• Field Trip has also benefitted from analyst coverage, riding a CAD$8.50 price target from Stifel GMP to its February 2021 high of CAD$8.25.
• Field Trip’s operational focus is its well-positioned network of U.S./Canadian mental health treatment clinics, but it is also active in drug development.
• Field Trip is the first public company to seek to enter Oregon’s new (legal) market for medicinal psilocybin use.

Numinus Wellness (CAN:NUMI / US:LKYSF)
 

• Numinus has raised just over US$50 million as a public company (~CAD$68 million).
• It hasn’t received equivalent analyst coverage to Cybin or Field Trip.

Other uplisting prospects

The previous three companies would clearly be the favorites as early candidates to seek to uplist to the NASDAQ. But several other public companies would have (likely) already had their own plans to uplist – or are now moving in that direction after seeing MindMed’s success.

Among the other public (or soon-to-be public) companies in this space, we see four of these companies as being the most-likely companies to move toward an uplisting.

Mind Cure Health (CAN:MCUR / US:MCURF) has been very active in developing a diversified business model. This includes a robust digital therapeutics platform, clinic services, drug R&D, and also a product line of nootropics that is now on sale.

The primary focus of Mydecine Innovations Group (CAN:MYCO / US:MYCOF) is its Phase II clinical trial for an MDMA-assisted therapy for PTSD. Mydecine is also one of the early leaders in psilocybin cultivation and recently announced the first (legal) international export of psilocybin mushrooms.

Bright Minds Biosciences (CAN:DRUG / US:BMBIF) is purely focused on drug development. Its lead drug, 5-HT2C has shown considerable promise as a treatment for both opioid addiction and binge eating, in preclinical studies.

If it wasn’t for the fact that Small Pharma Inc hasn’t even started public trading, we would have probably penciled it in as the most-likely uplisting prospect after the first three leaders. About to commence trading on the TSX Venture Exchange (via RTO), UK-based Small Pharma raised CAD$58 million for its qualifying transaction. That’s the most capital raised by a Canadian-listed company prior to trading.

Small Pharma also boasts advanced drug development: commencing a Phase IIb clinical trial on a DMT-based therapy for depression. Ultimately, this could be the quickest company to go from an initial listing to a successful uplisting.

Sector catalysts

Even if a particular company isn’t successful in uplisting, or chooses not to apply, each new NASDAQ listing is arguably a catalyst for the whole sector.

That was certainly the case with the first psychedelic stock to trade on the NASDAQ: Compass Pathways. The CMPS IPO was the obvious catalyst for the spectacular rally for these stocks in the last 3 ½ months of 2020.

In just the first two trading sessions following news of MindMed’s successful uplisting, MindMed itself wasn’t the only psychedelic stock to rocket off of recent lows.

It’s still too early to access the overall impact of the MindMed uplisting. However, there is every indication that this is serving as a broad catalyst for these stocks.

More publicity for the sector with each new NASDAQ listing. Greater investor access for (in particular) U.S.-based investors. More credibility for this emerging industry.

The overall excitement of investors for this emerging industry is built on two things.
 

1. Spectacular treatment results for psychedelic drugs in both clinical and non-clinical settings
2. Numerous major treatment markets desperately in need of more effective therapies

However, the launching pad for these psychedelic stocks could be new NASDAQ listings – even if they are not the particular stock to get listed.

Today, it’s MindMed.

Tomorrow?

DISCLOSURE: The writer holds shares in MindMed Inc, Cybin Inc, Numinus Wellness, Mind Cure Health, and Novamind Inc.