7 Psychedelic Stocks to Watch

The cannabis stock boom may be repeated by psychedelic stock prices.

Here are seven top psychedelic drug stocks that investors should watch.

As the first U.S. state to legalise psilocybin, the primary component of so-called magic mushrooms, in November 2020, Oregon made history. Similar to how cannabis is becoming more accepted, psychedelics are also gaining popularity. As a result, investors are assessing what may be a significant long-term development opportunity as the topic gains traction, most notably as a ballot proposal in Colorado's 2022 midterm elections. According to a new prediction by Data Bridge Market Research, the market for psychedelic medications would grow to $6.4 billion by 2029. Sadly, investors in cannabis stocks have faced numerous regulatory obstacles and have gone through numerous boom and bust cycles; as a result, investors in psychedelics must have a high risk tolerance. Here are the top seven trippy stock picks.

ATAI Life Sciences NV (ticker: ATAI)

Ibogaine, ketamine, and other psychedelic chemicals are the basis for several medications that ATAI Life Sciences is developing. The business went public in June 2021, and one of its founders was billionaire VC Peter Thiel. Since pricing shares for its first public offering, or IPO, at $15, ATAI has experienced difficulties.

But in February 2022, when Cathie Wood, a well-known stock picker and the founder of ARK Invest, started purchasing ATAI shares through her ARK Genomic Revolution ETF, she gave the stock a vote of confidence (ARKG). Eight drug candidate programmes from ATAI are undergoing clinical trials. The stock, which closed at $2.80 on November 8, saw a 14% increase in value when Loop Capital commenced coverage of it with a "buy" rating and set a price target of $18.

GH Research PLC (GHRS)

For the treatment of postpartum depression, bipolar II disorder, and treatment-resistant depression, or TRD, GH Research is developing and evaluating unique 5-MeO-DMT, or O-methyl-bufotenin, therapies. Dimethyltryptamine, also known as DMT, is closely related to the hallucinogenic compound 5-MeO-DMT. It is naturally present in a wide range of plants, and the Sonoran Desert toad's glands secrete it.

GH reported in May that the Food and Drug Administration's pre-investigational new medication application had been successful. The company now plans to submit a full application for their TRD drug by the end of the first quarter of 2023. Additionally, the business is evaluating potential candidates for injecting and nasally administering 5-MeO-DMT.

Compass Pathways PLC (CMPS)

For the treatment of TRD, anorexia nervosa, and post-traumatic stress disorder, or PTSD, Compass Pathways is evaluating a synthetic psilocybin therapy. Patients participating in the trial take the medication in a controlled setting while receiving therapy. Similar late-stage trials employing MDMA, or ecstasy, for the treatment of PTSD conducted by the University of California—San Francisco had successful outcomes.

In September 2020, Compass Pathways finalised the sale of its shares at $17 each. The erratic stock has experienced price swings as high as $61 since becoming public, but on November 8 it closed at $9.42. Investors should anticipate that additional trial results will increase CMPS stock volatility.

Incannex Healthcare Ltd. (IXHL)

An Australian pharmaceutical company called IncannexHealthcare creates hallucinogenic and cannabis substances. Obstructive sleep apnea, also known as OSA, lung inflammation, rheumatoid arthritis, inflammatory bowel disease, traumatic brain injury, and other illnesses are among the conditions for which Incannex is studying its cannabis candidates. Additionally, it collaborates with Monash University's Clinical Psychedelic Research Lab to study how psilocybin-assisted psychotherapy might be used to treat generalised anxiety disorder.

In February, Incannex started trading on the Nasdaq for about $15. After Incannex revealed promising phase 2 trial results for the cannabinoid IHL-42X in treating OSA, the stock shot up to more than $90 in March. However, shares have since traded all the way back down to close at $3.85 on Nov. 8, and they are likely to remain a volatile investment for the foreseeable future.

Mind Medicine Inc. (MNMD)

Clinical trials are being conducted by Mind Medicine, a biotechnology business, on a number of pharmacological candidates, including the 19-MC derivative of ibogaine, DMT, mescaline, and LSD. The FDA approved Mind Medicine's investigational new drug application in January, authorising phase 2b testing of MM-120, an LSD analogue that has been pharmacologically enhanced, to treat generalised anxiety disorder.

The trial's patient dosing started in August. The business is also experimenting with psychedelic drugs to treat ailments like autism spectrum disorder, often known as ASD, opiate withdrawal, and adult attention deficit hyperactivity disorder, or ADHD. For investors who are prepared to accept the risks, the markets for depression, anxiety, ADHD, and ASD are enormous and have significant long-term potential.

Seelos Therapeutics Inc. (SEEL)

A biopharmaceutical business called Seelos Therapeutics has four pipeline projects that are in the clinical stages. A therapy being tested by Seelos in phases two and three is intended to treat both spinocerebellar ataxia (SCA) and amyotrophic lateral sclerosis (ALS). A sugar made of two molecules of glucose is the medication.

Acute suicidal thoughts and actions in individuals with major depressive disorder are being treated by the firm using ketamine-based therapy, as is complicated regional pain syndrome. Finally, Seelos has two gene therapy preclinical studies that focus on Parkinson's disease.

Cybin Inc. (CYBN)

A Canadian pharmaceutical company called Cybin is creating psychedelic drugs to treat addiction and mental diseases including sadness and anxiety. Psilocybin is being tested in the company's clinical-stage EMBARK trial as a treatment for frontline healthcare workers' mental suffering. For its psilocybin-based medication that treats MDD and alcohol use disorder, Cybin published encouraging preclinical results in November 2021. In August 2022, Cybin started conducting MDD therapy trials. The business is also investigating a neuroinflammation treatment using phenethylamine derivatives and a DMT-based therapy for anxiety disorders.