- Investors are already familiar with the multi-billion-dollar market potential of psychedelic drug development and mental health treatment clinics
- Next-generation digital therapeutics can optimize efficiency and efficacy in psychedelic medicine – unlocking maximum profit potential for the industry
- Several psychedelics companies are already very active in advancing digital therapeutics platforms
Ask any investor what the psychedelic drug industry is all about and most will reply with a two-part answer: psychedelic drug development and mental health treatment clinics.
What is on the radar of far fewer investors is the third ingredient in this healthcare revolution: digital therapeutics. For investors who are new to this IP, digital therapeutics (as the name implies) is digital technology to enhance both the efficiency and efficacy of medical treatments.
Digital therapeutics: revolutionizing 21st century healthcare
Why should investors in psychedelic stocks be deeply interested in this tech? Two reasons.
- Generally, next-generation digital technology (which includes the introduction of AI) is already pioneering a tech revolution in healthcare.
- Specifically, psychedelics-based therapies are one of the areas of medical treatment that will benefit the most from this technology.
Digital therapeutics can improve the efficiency of any medical treatment program in a number of basic ways: more efficient scheduling/re-scheduling of appointments, better quality treatment data, real-time data reporting.
Digital therapeutics is already rapidly replacing the personal scheduling of medical appointments. Patients go online, immediately see available time slots – and select their preference.
A nagging problem with medical treatment (especially mental health issues) is data reporting. Patients simply forget (or mis-remember) important details between medical appointments. Few are disciplined enough to keep their own, written treatment journal.
Digital therapeutics gives patients a portal to relay symptoms and treatment results directly and immediately. Eliminating memory issues means better data for therapists. Real-time reporting of data doesn’t simply eliminate memory issues, it relays this information to physicians immediately.
These digital improvements in efficiency also translate (directly or indirectly) into better treatment efficacy.
Greater efficiency (in appointment scheduling and data reporting) alone implies improved efficacy. Physicians and patients connecting more reliably. Physicians are armed with better/more-complete data for diagnostics and treatment recommendations.
But the efficacy gains from digital therapeutics go well beyond that. Much of it is connected to the introduction of artificial intelligence into these digital platforms.
Through AI, digital therapeutics can generate many additional treatment benefits. Routine assessments of data can be automated. This frees up additional time for the physician – time that can be allocated to patients with more severe needs.
Routine diagnostic and treatment decisions can also be automated: from changing appointment dates to adjusting drug dosages. More time is freed up for the physician.
And when data is collected that is not “routine”, the physician is immediately alerted of the need for hands-on attention. Faster, better treatment.
With psychedelics-based therapy representing new treatments for mental health conditions, this industry will particularly benefit from this next-generation technology.
Mental health patients can be especially fragile. Through digital therapeutics, such patients can be monitored more closely. More responsive treatment.
With these treatments still being developed/refined, digital therapeutics will allow more rapid adjustments to therapeutic regimens when an initial approach is unsatisfactory. Greater flexibility in treatment.
Industry leaders dive into digital therapeutics
Psychedelic Stock Watch has been covering this branch of the psychedelic drug industry. But with the industry evolving rapidly in this area, there is more to pass along to investors.
Both private industry leader atai Life Sciences and public industry leader MindMed Inc (CAN:MMED / US:MMEDF) have already added such platforms to their psychedelics operations.
It’s not just the largest players in the industry that are including this IP in their business model.
Mind Cure Health (CAN:MCUR / US:MCURF) is another psychedelics company that is very active in digital therapeutics. On October 21, 2020, MCUR acquired Epiphany360, “a proprietary cloud-based therapeutics platform for treating mental health.”
This became “iSTRYM”, MINDCURE’s in-house digital therapeutics platform. On January 6, 2021, MINDCURE announced the build-out of iSTRYM as (at that time) a data optimization tool.
More recently, the company has taken iSTYRM to the next level. On April 13, 2020, MINDCURE announced a partnership with Speak AI. The goal: enhancing iSTRYM with AI in order to maximize the benefits of its digital therapeutics platform.
MINDCURE’s CEO, Kelsey Ramsden, connected the dots for investors.
Investors won’t have to wait for MCUR to start benefitting from the AI-improved iSTRYM platform. Just prior to that news release (on April 8, 2021), MINDCURE announced that iSTRYM would be deployed in Canada’s first psychedelics-based treatment center – ATMA Journey Centers.
On January 12, 2021, MINDCURE committed itself to a strategic investment in ATMA, with (obviously) one of the goals being to launch iSTRYM as quickly as possible. Here MCUR separates itself from even the industry leaders, as neither atai nor MindMed are ready to deploy their own digital therapeutics platform in a clinic setting.
MINDCURE will soon be getting even greater use from iSTRYM. The company is scheduled to open its first in-house treatment clinic in May 2021. Presumably, that clinic will be supported with the iSTRYM platform as well.
Big money in digital therapeutics
Investors not already impressed with the potential of digital therapeutics may revise their opinion when they see the institutional interest in such technology.
To date, only four players in the psychedelics industry have closed financings of US$100 million or more.
Compass Pathways (US:CMPS), the other industry leader among public companies raised $146.6 million for its NASDAQ IPO financing. The other companies are all private.
Soon-to-go-public atai has had two nine-figure financings, most recently its $157 million Series D financing round. Ireland-based GH Research just closed a $125 million financing for its drug development for treatment-resistant depression.
Back on May 21, 2020, private company Mindstrong announced a $100 million Series C fundraising. Mindstrong’s business model? AI-powered digital therapeutics.
Institutional investors don’t pour $100 million into a single IP investment without high hopes for the technology.
Psychedelic Stock Watch has already highlighted the potential of psychedelic drug development. Numerous multi-billion-dollar treatment markets are wide open, with the (long term) potential of generating multi-billion-dollar market caps.
We have also regularly alerted investors to the over 1 billion people (worldwide) with serious mental health disorders – who are potential patients for psychedelics-based clinic services.
Given the combined potential of psychedelic drug development and mental health treatment clinics, it’s not surprising that psychedelics companies would be placing a heavy emphasis on cutting-edge digital IP to optimize their clinics/drug development.
And it’s not surprising that institutional investors are wanting a (big) piece of the action here, and are backing that up by writing some fat checks.
Psychedelic Stock Watch recently compared the investment potential of psychedelic drug development versus clinic services. Our verdict was that there was no clear favorite here: both had plenty of potential to offer investors.
Now investors in psychedelic stocks would be well-advised to start paying close attention to the third pillar of this emerging industry: next-generation, AI-powered digital therapeutics.
It’s the wave of the future in general for healthcare. It has already arrived in the psychedelic drug industry.
DISCLOSURE: The writer holds shares in MindMed Inc and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.
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