In this article, we discuss the 10 best psychedelic stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Psychedelic Stocks to Buy Now.
Psychedelic treatments for mental health disorders like depression, anxiety, and post-traumatic stress have revolutionized the industry in the past few years, helping the market for the novel therapies to grow from $2 billion in 2019, as per a report by Data Bridge Market Research, to almost $5 billion in 2020, according to a study by Research and Markets. The sector offers explosive growth potential, evidenced by the recent positive coverage of psychedelic stocks by investment research firms like Citi, Credit Suisse, Canaccord Genuity, and Cantor Fitzgerald.
Some of the companies already making a big splash in the as yet small sector include COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), and Seelos Therapeutics, Inc. (NASDAQ: SEEL), among others. COMPASS Pathways plc (NASDAQ: CMPS) and Atai Life Sciences N.V. (NASDAQ: ATAI) recently debuted on the stock market, fetching billion dollar valuations, while Seelos Therapeutics, Inc. (NASDAQ: SEEL) has been soaring in trading the past few days on the back of positive results from a clinical study.
The success of these firms in the psychedelic market has attracted the attention of industry giants like Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK). These biopharma companies market different kinds of drugs for mental health disorders and sense a business opportunity as novel treatments for depression and anxiety become more widely accepted in the United States.
Investments in psychedelic startups have also increased in the past few months, with investors flocking to early stage psychedelic firms that are working on innovative new technologies to help psychedelics become more mainstream. Research institutions, like the Center for Psychedelic and Consciousness Research at John Hopkins University in Baltimore, which has already published more than 50 research papers on the subject, have also contributed to the industry. However, despite these advances, psychedelics remain a niche market in the pharma sector.
Investors looking to invest in the industry should be wary of certain challenges that the psychedelic companies will have to negotiate before unleashing their true growth potential. These challenges include an uphill legal battle to get approval for use of psychedelic substances in new drugs, a capacity-building campaign in the wider public to debunk the myths and stigma surrounding the use of psychedelics, as well as financial hurdles that an industry still in its infancy might face as it struggles for wider recognition.
Photo by Егор Камелев on Unsplash
The psychedelic industry has the potential to disrupt the biopharma sector in the coming years much like the rise of fintech has transformed the finance world. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best psychedelic stocks to buy now. These were ranked keeping in mind basic business fundamentals, hedge fund sentiment, and analyst ratings for each.
Best Psychedelic Stocks to Buy Now
10. Small Pharma Inc. (OTC: DMTTF)
Small Pharma Inc. (OTC: DMTTF) is placed tenth on our list of 10 best psychedelic stocks to buy now. The company’s shares have returned 14% to investors over the past five days. The company is working on rapid-acting antidepressants. These are used to treat patients with mental health conditions such as depression. The firm has a market cap of over $100 million and a 279% return on equity. It is based in the United Kingdom.
On June 25, Small Pharma Inc. (OTC: DMTTF) announced that it would be participating in two upcoming conferences on psychedelics in order to present and share the progress it had made in the assisted therapy department for depression.
In February this year, Small Pharma Inc. (OTC: DMTTF) had announced that it was beginning a clinical program related to DMT-assisted therapy. According to details provided by the firm, the program included a Phase I and Phase 11a trial of a leading drug candidate.
Just like COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), Seelos Therapeutics, Inc. (NASDAQ: SEEL), Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK), Small Pharma Inc. (OTC: DMTTF) is a solid investment in the health sector.
9. Revive Therapeutics Ltd. (OTC: RVVTF)
Revive Therapeutics Ltd. (OTC: RVVTF) stock has returned 123% to investors over the past year. The firm operates as a life sciences company focusing on the development of drugs, like psychedelics, for treatment of rare disorders and infectious diseases. It is ranked ninth on our list of 10 best psychedelic stocks to buy now. The firm has a market cap of more than $135 million and a 52-week price high of $0.72 per share. It operates from Canada.
On June 25, Revive Therapeutics Ltd. (OTC: RVVTF) CEO Michael Frank announced that the company would begin trading on the OTCQB Market at the end of June, helping broaden the awareness and shareholder base in the United States.
Earlier that month, Revive Therapeutics Ltd. (OTC: RVVTF) had revealed an agreement with Supriya Lifescience in India for the manufacture, registration, and the marketing of a COVID-19-related drug named Bucillamine.
Revive Therapeutics Ltd. (OTC: RVVTF) is a top stock for the pharma industry, along with COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), Seelos Therapeutics, Inc. (NASDAQ: SEEL), Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK).
8. Numinus Wellness Inc. (OTC: LKYSF)
Numinus Wellness Inc. (OTC: LKYSF) is a company that works closely on the development and delivery of psychedelic-assisted psychotherapy. It is placed eighth on our list of 10 best psychedelic stocks to buy now. The company’s shares have returned 282% to investors over the past twelve months. The firm has a market capitalization of over $165 million and posted more than $675,000 in annual revenue last year.
On July 12, Numinus Wellness Inc. (OTC: LKYSF) announced that authorities in Canada had approved a single-arm, open-label safety and feasibility study evaluating assisted therapy for post-traumatic stress disorder. Payton Nyquvest, the CEO of the firm, shared the news.
Earlier that month, Numinus Wellness Inc. (OTC: LKYSF) had announced that it would be purchasing the Neurology Centre of Toronto for $500,000 in cash and shares. The company plans to transform the centre into a treatment centre focusing on psychedelics.
Investors who are interested in COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), Seelos Therapeutics, Inc. (NASDAQ: SEEL), Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) should also check out Numinus Wellness Inc. (OTC: LKYSF).
7. Hollister Biosciences Inc. (OTC: HSTRF)
Hollister Biosciences Inc. (OTC: HSTRF) is ranked seventh on our list of 10 best psychedelic stocks to buy now. The stock has offered investors returns exceeding 78% over the course of the past twelve months. The firm primarily makes and sells cannabis products but also has interests in the psychedelic products business. It has a market cap of over $55 million and posted more than $30 million in revenue last year.
On June 1, Hollister Biosciences Inc. (OTC: HSTRF) posted earnings results for the first quarter of 2021, reporting a revenue of more than $23 million over the period, an increase of a whopping 2,331% compared to the revenue over the same period last year.
Last year, Hollister Biosciences Inc. (OTC: HSTRF) had entered the psychedelic industry with the purchase of AlphaMind Brands, a firm working on the development of psychedelic products. Carl Saling, the CEO of the firm, noted the fast growth in the psychedelic market at the time.
COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), Seelos Therapeutics, Inc. (NASDAQ: SEEL), Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) are some of the best stock options in the health industry, alongside Hollister Biosciences Inc. (OTC: HSTRF).
6. Field Trip Health Ltd. (OTC: FTRPF)
Field Trip Health Ltd. (OTC: FTRPF) is a firm concentrating on the development and delivery of psychedelic therapies. It is placed sixth on our list of 10 best psychedelic stocks to buy now. The company’s shares have offered investors returns exceeding % over the course of the past year. It is based in Toronto and has a market capitalization of over $300 million. The firm posted more than $750,000 in annual revenue last year.
Last month, Field Trip Health Ltd. (OTC: FTRPF) had announced that it had applied for a listing on the NASDAQ stock market in the United States. The firm had clarified that there would be no change to the shares, warrants, or the share structure as a result of the application.
In early May, Field Trip Health Ltd. (OTC: FTRPF) President Hannan Fleiman, while opening a field center, had said that psychedelic therapies were poised to play an important role in the treatment of mental health disorders that had sprung up as a result of the COVID-19 pandemic.
While COMPASS Pathways plc (NASDAQ: CMPS), Atai Life Sciences N.V. (NASDAQ: ATAI), Seelos Therapeutics, Inc. (NASDAQ: SEEL), Pfizer Inc. (NYSE: PFE), Eli Lilly and Company (NYSE: LLY), AbbVie Inc. (NYSE: ABBV), Bristol-Myers Squibb Company (NYSE: BMY), Abbott Laboratories (NYSE: ABT), and GlaxoSmithKline plc (NYSE: GSK) dominate the conversations around novel therapies, Field Trip Health Ltd. (OTC: FTRPF) is making a name for itself in this regard as well.
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Disclose. None. 10 Best Psychedelic Stocks to Buy Now is originally published on Insider Monkey.
