Our Financial Analysts Break Down our Top Three Emerging Stocks – MindMed (MMED.NE) vs. Field Trip (FTRP.CN) vs. Cybin (CYBN.NE)
There has been a lot of noise around listed psychedelic investment opportunities of late. Over the past six months, we’ve seen a handful of psychedelic companies listing in Canada across stock exchanges such as the TSX-V, CSE, and NEO. Now, we’ll take a closer look at three of them; Cybin, MindMed, and Field Trip Health, to see how they rank against each other.
Company Focus: Psychedelic Drug Development for MMED Stock, CYBN Stock
In terms of company focus, MindMed currently has two main drug development programs: one is based on a derivative of the hallucinogenic root ibogaine, while the other, titled Project Lucy, is focused on the potential medicinal uses of the lysergic acid diethylamide (LSD). They also recently launched their digital medicine division, Albert.
Field Trip Health on the other hand is focusing its efforts on providing treatments that guide patients through ketamine-enhanced psychotherapy (“KEP”). At the moment, ketamine is the only legal psychedelic medicine available for prescription by health care practitioners in Canada and the U.S.
Cybin is looking to develop psychedelic and non-psychedelic products. Its pharmaceutical segment (psychedelic) is developing micro-dose psilocybin to treat depression, PTSD, addiction and eating disorders. Within the nutraceutical segment (non-psychedelic), Cybin is looking to commercialize a comprehensive line of functional mushroom adaptogens.
Pre-IPO Funding: Institutional Investment
Prior to listing in October 2020, Field Trip successfully completed two rounds of funding. Its first Series-A round in February 2020 saw it raise $8.5mm led by its founders and Singhal Health Foundation. Its second round in August 2020 brought in $11.0mm. The funds were used for establishing a network of medical centres focused exclusively on psychedelic-enhanced psychotherapy, and to help fund the final construction of its research and cultivation facility at the University of the West Indies in Jamaica.
Cybin managed to raise a total of ~$45mm before its IPO debut. Out of this, ~$35mm was raised through a private placement offering in October 2020 (largest subscription receipt financing in the Canadian psychedelic sector). The primary use of the funds was to progress its psychedelic therapies and nutraceutical product development phase.
Mindmed raised a total of $30.0mm before its IPO debut in early March 2020. Since then, through 2 post-IPO financing rounds, it managed to raise another $32.0mm from institutional investors. It is currently in the process of raising another $30.0mm through a bought deal offering. These proceeds will help in progressing its clinical trial pipeline of psychedelic inspired medicines and experiential therapies.
Management Team & Advisory Board
Field Trip Health is led by a management team with deep expertise in healthcare & biotechnology. Its management team has experience working with companies such as Aurora Cannabis, Trait Biosciences, Acerus Pharmaceuticals & Cynapsus Therapeutics.
Further, its Advisory Board members have experience in various pharma & biotechnology companies such as Bayer Pharmaceuticals, Sanofi, Proteosis Therapeutics, and BioTherapeutics, among others.
Cybin’s management team have many years of professional experience working across a host of pharmaceutical and healthcare brands such as Pernix Therapeutics, Biovail Pharmaceuticals and Eli Lilly to name a few.
It’s Advisory Board members have also served in executive positions at numerous pharmaceutical and healthcare giants such as Teva & Baxter Healthcare, as well as leading research organizations including the Canadian Centre for Psychedelic Science and the Canadian Generic Pharmaceutical Association.
Mindmed also boasts an extremely qualified and proficient management team with relevant sector expertise. It’s management and advisory team has experience working in companies such as Merck, Roche, Actelion Pharmaceuticals, Canopy Growth Corporation, and Miramar Labs to name a few. The Company constantly collaborates with professors and doctors from leading institutions such as the John Hopkins Center for Psychedelic and Consciousness Research.
Stock Trading Summary
Apart from the CSE, MindMed also trades on the Frankfurt Stock Exchange under the ticker “MMQ” as well as the U.S. OTC market under the ticker “MMEDF”.
Field Trip & MindMed have seen a strong price appreciation since listing. MindMed, which has been trading on the markets for about 8 months now, has seen a whopping 546% increase from its listing price to date. Its meteoric rise can be attributed in part to the fact that it was the first listed psychedelics company. Hence, investors who were eagerly waiting on the side-lines for exposure to this sector rushed in upon its listing.
Field Trip shares have risen 66% since listing in early October, showcasing strong investor appetite. The Markets’ response to Cybin’s listing has also been encouraging with the stock currently up 51% from listing.
All 3 stocks have a high free float % which makes them liquid securities to trade in. MindMed is by far the largest of the 3 players with a market cap of over $650mm. Field Trip and Cybin are roughly one fifth the size with market caps of $130mm and $144mm, respectively.
Psychedelic Financials & Cash Balance
Though each of the three companies have started recording revenues, all of them are presently loss-making. As per the latest quarterly filings, Field Trip, Cybin & MindMed had total cash balances of $14.0mm, +$45.0mm, and $24.1mm, respectively. Cybin has the largest war-chest, giving them a lot of room for strategic acquisitions and runway as they go through a drug development roadmap.
In fact, on December 7th, 2020, Cybin announced its acquisition of Adelia Therapeutics for ~$15.75mm. The acquisition adds an extensive intellectual property portfolio and helps Cybin diversify its programs.
At the moment, Field Trip Health & Cybin do not have any broker coverage. We usually see initiating broker coverage once the stock has been trading on the exchange for at least a quarter. On the other hand, MindMed currently has two analysts covering the stock, both with a ‘Strong Buy’ recommendation. This indicates both Cybin and Field Trip may have some strong buying signals from analysts in the coming month.
Given that the psychedelics space is currently witnessing new entrants almost every month, investors need to do their due diligence before investing. Each of the 3 stocks we highlighted above are focused on different psychoactive compounds. There is no doubt that investor interest for these stocks will continue to rise going forward. However, it is important to keep track of corporate developments and management guidance from time to time to ensure that the company’s progress stays on track. Those able to identify these trends early on will see immense capital appreciation in their investments.
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Former Analyst at Citi's Investment Banking division where I was responsible for covering a variety of sectors including healthcare, consumer, technology, aviation & logistics. My interest lies in profiling and evaluating companies that are operating in new-age industries with huge potential. The psychedelics market presents a tremendous opportunity and is increasingly garnering the interest of investors. There is sufficient literature investigating the therapeutic effects of psychedelics in the treatment of a variety of mental illnesses. I'm here to help you navigate through the Canadian listed players operating in this space. I will look to highlight the strengths of different players and differentiation in R&D, which is crucial for successfully driving the drug development process.