Author Topic: Psychedelic and Magic Mushroom Stocks  (Read 1198 times)

yvr111

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Psychedelic and Magic Mushroom Stocks
« on: December 27, 2020, 11:27:16 AM »
Starting to jump on the curiosity train of investing in magic mushrooms/psychedelics. The stock Numinus Wellness is based in Vancouver where I'm at and I know of some high profile medical professionals (personally) they've recently got on board. Another one I've seen is Mindmed. I'm curious how folks value something like this and decide if and which is a good investment? Would love to hear what you all are doing and why.

As context: I have never bought shares in an individual company beside large banks (all of my money is in good ol' ETFs). I'm not looking to put a large sum in - say 1% of networth or a couple thousand dollars. It's something that had an amazing effect on my personal health, and it's a gamble that, if I were to gain some money great but losing it wouldn't be the end of the world.


bbqbonelesswing

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #1 on: December 27, 2020, 02:14:51 PM »
I imagine you could play either of those two like the pot stocks- buy a basket of companies in the run-up to an election, then dump them right after. Personally I wouldn't put any significant amount of money into either one. You would probably get more out of your money by just buying mushrooms themselves.

PDXTabs

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #2 on: December 27, 2020, 02:41:44 PM »
Oregon has started the journey to legalizing psychedelics, they could easily be the next cannabis. If you are willing to hold over the long term I think that you could make some money. Of course, you need to buy enough companies to find some winners.

jim555

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #3 on: December 27, 2020, 02:49:52 PM »
Kind of hard to capitalize on a product so easily made via clandestine methods.  Seems like you would be undercut by the black market.

GreenEggs

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #4 on: December 27, 2020, 05:15:43 PM »
I'd ask what's the required minimum investment level for an invitation to their shareholder meetings.  And I'd expect to receive samples of any new product lines that they're testing. 


;)





yvr111

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #5 on: December 27, 2020, 05:37:52 PM »
I'd ask what's the required minimum investment level for an invitation to their shareholder meetings.  And I'd expect to receive samples of any new product lines that they're testing. 


;)

This is the best!!!!!




Telecaster

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #6 on: December 27, 2020, 06:04:13 PM »
Kind of hard to capitalize on a product so easily made via clandestine methods.  Seems like you would be undercut by the black market.

You can brew beer or distill vodka at home.  Most people don't.

bwall

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #7 on: December 28, 2020, 04:16:59 AM »
Kind of hard to capitalize on a product so easily made via clandestine methods.  Seems like you would be undercut by the black market.

Medical psilocybin is targeted at people suffering from depression. A group that *by definition* is not likely to undertake exciting new projects.

bwall

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #8 on: December 28, 2020, 04:34:27 AM »
Starting to jump on the curiosity train of investing in magic mushrooms/psychedelics. The stock Numinus Wellness is based in Vancouver where I'm at and I know of some high profile medical professionals (personally) they've recently got on board. Another one I've seen is Mindmed. I'm curious how folks value something like this and decide if and which is a good investment? Would love to hear what you all are doing and why.

As context: I have never bought shares in an individual company beside large banks (all of my money is in good ol' ETFs). I'm not looking to put a large sum in - say 1% of networth or a couple thousand dollars. It's something that had an amazing effect on my personal health, and it's a gamble that, if I were to gain some money great but losing it wouldn't be the end of the world.

I believe that Compass Pathways (CMPS) is the safest way to play this sector.

Numinus is growing magic mushrooms directly. Lots of regulatory risk at stake and in the end, they're just a grow operation. It's market cap is $110m USD, which is super-tiny.

Mindmed seems to me like a better company than Numinus, but it's still very small. Both are traded Over The Counter (OTC) also known as the pink sheets. This means that for whatever reason, they haven't met the regulatory requirements to be traded on a stock market such as Nasdaq, NYSE, or the Toronto Stock Exchange.

Compass Pathways is has ongoing clinical trials scheduled to be completed in 2021 (IIRC) and is traded on the NASDAQ. As with any company doing pharmaceutical trials there is risk involved but to me this company is less risky than the other two. YMMV.

Chris Pascale

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #9 on: December 30, 2020, 06:40:59 AM »
Starting to jump on the curiosity train of investing in magic mushrooms/psychedelics. The stock Numinus Wellness is based in Vancouver where I'm at and I know of some high profile medical professionals (personally) they've recently got on board. Another one I've seen is Mindmed. I'm curious how folks value something like this and decide if and which is a good investment? Would love to hear what you all are doing and why.

As context: I have never bought shares in an individual company beside large banks (all of my money is in good ol' ETFs). I'm not looking to put a large sum in - say 1% of networth or a couple thousand dollars. It's something that had an amazing effect on my personal health, and it's a gamble that, if I were to gain some money great but losing it wouldn't be the end of the world.

What concerns me about the company is that they are operating at a loss - https://www.investing.com/equities/lucky-strike-resources-ltd.-income-statement

But at $1.00 per share you could wind up catching a swing. I've done that with some stocks, like before Rite Aid went to hell, I picked it up for a fast gain, and with a bunch of dumb luck sold it on impulse (instinct?).

Chris Pascale

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #10 on: December 30, 2020, 06:44:31 AM »


I believe that Compass Pathways (CMPS) is the safest way to play this sector.

They have not yet made any sales - https://www.investing.com/equities/compass-pathways-plc-income-statement

Do you have any other info?

bwall

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #11 on: December 30, 2020, 08:08:27 AM »


I believe that Compass Pathways (CMPS) is the safest way to play this sector.

They have not yet made any sales - https://www.investing.com/equities/compass-pathways-plc-income-statement

Do you have any other info?

Correct; they have no sales. Nor, to the best of my knowledge, do either of the other companies mentioned upthread.

Compass Pathways is looking to get regulatory approval for use of psilocybin in nine countries (USA, Canada, UK, and 6 EU countries). Read about their clinical trials on their website:
https://compasspathways.com/our-research/psilocybin-therapy/our-clinical-trials/treatment-resistant-depression/

So, until they get regulators approval, sales will be zero. After that, they have a huge market of treatment resistant depression all to themselves, so to speak. Psilocybin is relatively easy to produce in the lab compared to other modern drugs these days.

I view their stock as a play on society's evolution towards progress. Technology/medical treatments first discovered in the 1930's (!), but due to the moral panic of the 1960's were outlawed before any studies could be completed. Now society has progressed (to a point) that the studies can be completed. The treatments would be able to help those who right now have tried everything but to no avail.

I think it would also be good for treating PTSD, which we have a lot of after all these wars.

In sum, I see large upside potential after approvals are granted, currently targeted for 2021. If no approvals are granted, then the stock will go to zero. The stock now has a market cap of $1.8b, so it's relatively small, but much larger than the two others mentioned here.

maizefolk

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #12 on: December 30, 2020, 08:23:05 AM »
I'm excited about the potential of psilocybin as a treatment for otherwise treatment resistant depression and PTSD. For that matter I'm excited about it as a substitute approach for existing treatment responsive depression.

But I don't feel optimistic about investing in companies marketing magic mushrooms or pure psilocybin because as far as I can see there isn't a strong moat (IP, special expertise required to grow the mushrooms or produce psilocybin in a big bioreactor of yeast or E. coli, expensive or slow to build infrastructure, or network effects). Without a moat, when/if the treatment is legalized my anticipation is that lots of competitors are going to jump in, turn the mushrooms or pure metabolite into a commodity and drive down prices to something close to the cost of production.

bwall

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #13 on: December 30, 2020, 08:40:36 AM »
I'm excited about the potential of psilocybin as a treatment for otherwise treatment resistant depression and PTSD. For that matter I'm excited about it as a substitute approach for existing treatment responsive depression.

But I don't feel optimistic about investing in companies marketing magic mushrooms or pure psilocybin because as far as I can see there isn't a strong moat (IP, special expertise required to grow the mushrooms or produce psilocybin in a big bioreactor of yeast or E. coli, expensive or slow to build infrastructure, or network effects). Without a moat, when/if the treatment is legalized my anticipation is that lots of competitors are going to jump in, turn the mushrooms or pure metabolite into a commodity and drive down prices to something close to the cost of production.

There is always a non-zero chance of that happening, of course. But, I do not see it as being very likely, as Compass is creating a synthetic version of psilocybin which would be patent protected, thus the clinical trials. A competitor would have to establish a similar product via another method and conduct trials. That would take a few years, giving Compass an opportunity to cement it's business.

Also, how big is the market opportunity? As big as Viagra? Bigger? (only 50% of the population is ever eligible for Viagra whereas 100% of the population is potentially susceptible to depression/PTSD, etc.)

Chris Pascale

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #14 on: December 30, 2020, 08:49:57 AM »


I believe that Compass Pathways (CMPS) is the safest way to play this sector.

They have not yet made any sales - https://www.investing.com/equities/compass-pathways-plc-income-statement

Do you have any other info?

Correct; they have no sales. Nor, to the best of my knowledge, do either of the other companies mentioned upthread.

Compass Pathways is looking to get regulatory approval for use of psilocybin in nine countries (USA, Canada, UK, and 6 EU countries). Read about their clinical trials on their website:
https://compasspathways.com/our-research/psilocybin-therapy/our-clinical-trials/treatment-resistant-depression/

So, until they get regulators approval, sales will be zero. After that, they have a huge market of treatment resistant depression all to themselves, so to speak. Psilocybin is relatively easy to produce in the lab compared to other modern drugs these days.

I view their stock as a play on society's evolution towards progress. Technology/medical treatments first discovered in the 1930's (!), but due to the moral panic of the 1960's were outlawed before any studies could be completed. Now society has progressed (to a point) that the studies can be completed. The treatments would be able to help those who right now have tried everything but to no avail.

I think it would also be good for treating PTSD, which we have a lot of after all these wars.

In sum, I see large upside potential after approvals are granted, currently targeted for 2021. If no approvals are granted, then the stock will go to zero. The stock now has a market cap of $1.8b, so it's relatively small, but much larger than the two others mentioned here.

I like your POV. Thanks for sharing.

jim555

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #15 on: December 30, 2020, 09:09:43 AM »
I don't see where the volume is.  How many people are getting treated?  Not many.  I think you would be better off in marijuana stocks.

utaca

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #16 on: December 30, 2020, 09:30:57 AM »
I'm excited about the potential of psilocybin as a treatment for otherwise treatment resistant depression and PTSD. For that matter I'm excited about it as a substitute approach for existing treatment responsive depression.

But I don't feel optimistic about investing in companies marketing magic mushrooms or pure psilocybin because as far as I can see there isn't a strong moat (IP, special expertise required to grow the mushrooms or produce psilocybin in a big bioreactor of yeast or E. coli, expensive or slow to build infrastructure, or network effects). Without a moat, when/if the treatment is legalized my anticipation is that lots of competitors are going to jump in, turn the mushrooms or pure metabolite into a commodity and drive down prices to something close to the cost of production.

Although I'm not fully conversant on the business model of all the "shroom boom" companies, I basically came here to say the same thing. I expect the product arising from the emerging psychedelic therapies is ultimately going to be a "psychedelic spa" type of treatment model. Pay a few hundred dollars and experience the treatment in a safe place overseen by professionals. Will this experience be controlled by a publicly listed company or by individual practitioners? I'd think the latter.

Yes, there are going to be companies trying to patent specific compounds. But there are many, many unpatented research chemicals that provide a safe, controlled dose, are currently available on the grey market and are widely used to micro-dose. These products are cheap and already available.

Finally, sale volume is an issue. Unlike weed or alcohol, you can't come home after a hard day's work and eat a few shrooms to take the edge off. First, it takes a few days for neurotransmitters to recover so the products will literally not do anything if you take them day after day. Second, you don't want to experience a crazy intense psychedelic trip to take the edge off - properly used, psychedelics are for relatively rare, special occasions. Again, this goes back to the product arising from legal psychedelics - the products are cheap and you don't take them regularly (other than micro-dosing which, by definition, involves a small amount of product). Where can value be created then? In the psychedelic spa business model. 

maizefolk

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #17 on: December 30, 2020, 10:10:20 AM »
Compass is creating a synthetic version of psilocybin which would be patent protected, thus the clinical trials. A competitor would have to establish a similar product via another method and conduct trials. That would take a few years, giving Compass an opportunity to cement it's business.

Could you expand a little bit on what is meant by "a synthetic version of psilocybin"? I could see them developing a proprietary synthesis process but that doesn't provide much help with the biosynthetic pathway already in the public domain and the relatively low cost per does of producing psilocybin in the original mushrooms. Or do you mean compass is working not on psilocybin itself but a biochemical analog of psilocybin with a different chemical structure? I tried to look for any evidence of this, but as far as I can tell from their web presence they focus solely on regular psilocybin, not analogs. (For example K2 is an analog of marijuana).

It's also worth thinking in a bit more detail about what "cementing a business" looks like for a depression treatment. If Compass ends up with a few years of exclusivity, they could certainly charge a lot during that time. But I don't think drugs or psychotherapy (and a magic mushroom based treatment is somewhere in between) are businesses where a lot of brand loyalty is built up, nor one where it is possible to achieve vast economies of scale that make it hard for new competitors to enter the market and gain market share. That's why most of the profit from pharmaceutical companies comes in the time before drugs go off patent. Once the generics enter the market, even people who have been taken the brand name for a decade are (usually) happy to switch if the price is lower. Or the number of people who switch from one shrink to another to stay "in network" on their health insurance plan and hence save money.

Quote
Also, how big is the market opportunity? As big as Viagra? Bigger? (only 50% of the population is ever eligible for Viagra whereas 100% of the population is potentially susceptible to depression/PTSD, etc.)

Just playing devil's advocate here:

My understanding of the treatment for depression/PTSD with LSD or magic mushrooms is either a one time thing or at worst something one would revisit every six-twelve months. Presumably (from the user's perspective hopefully) the use case for viagra comes around significantly more often than once or twice a year?

Of course there is also the question of cost per use and all that, but if we're just comparing market size.

jim555

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #18 on: December 30, 2020, 11:32:19 AM »
I notice a lot of articles on Ketamine as a tool against treatment resistant depression.  Kind of does a brain reset on people and gets the out of the rut.

bwall

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #19 on: January 04, 2021, 03:13:10 AM »
Compass is creating a synthetic version of psilocybin which would be patent protected, thus the clinical trials. A competitor would have to establish a similar product via another method and conduct trials. That would take a few years, giving Compass an opportunity to cement it's business.

Could you expand a little bit on what is meant by "a synthetic version of psilocybin"? I could see them developing a proprietary synthesis process but that doesn't provide much help with the biosynthetic pathway already in the public domain and the relatively low cost per does of producing psilocybin in the original mushrooms. Or do you mean compass is working not on psilocybin itself but a biochemical analog of psilocybin with a different chemical structure? I tried to look for any evidence of this, but as far as I can tell from their web presence they focus solely on regular psilocybin, not analogs. (For example K2 is an analog of marijuana).

It's also worth thinking in a bit more detail about what "cementing a business" looks like for a depression treatment. If Compass ends up with a few years of exclusivity, they could certainly charge a lot during that time. But I don't think drugs or psychotherapy (and a magic mushroom based treatment is somewhere in between) are businesses where a lot of brand loyalty is built up, nor one where it is possible to achieve vast economies of scale that make it hard for new competitors to enter the market and gain market share. That's why most of the profit from pharmaceutical companies comes in the time before drugs go off patent. Once the generics enter the market, even people who have been taken the brand name for a decade are (usually) happy to switch if the price is lower. Or the number of people who switch from one shrink to another to stay "in network" on their health insurance plan and hence save money.

Quote
Also, how big is the market opportunity? As big as Viagra? Bigger? (only 50% of the population is ever eligible for Viagra whereas 100% of the population is potentially susceptible to depression/PTSD, etc.)

Just playing devil's advocate here:

My understanding of the treatment for depression/PTSD with LSD or magic mushrooms is either a one time thing or at worst something one would revisit every six-twelve months. Presumably (from the user's perspective hopefully) the use case for viagra comes around significantly more often than once or twice a year?

Of course there is also the question of cost per use and all that, but if we're just comparing market size.

I'll be the first to concede that you can run circles around me in the science department. I'm not familiar with the science behind the drug that they are developing. I just know that they plan to submit an NDA (New Drug Application) to the FDA and, if granted, would thus receive patent protection for 20 (?) years before generics can be produced. Other investors appear to agree as they haven't had any trouble raising money or going public.

Would another company be able to submit a 'me-too' drug in a couple of years time? Certainly. No question. But, in the meantime, Compass will enjoy a market to themselves, but, more importantly from my point of view, raise awareness about potential new treatments.

GreenEggs

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #20 on: January 04, 2021, 08:28:21 AM »
Shakedown Street to Wall Street, what a long strange trip it's been.  ;)

bbqbonelesswing

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #21 on: January 04, 2021, 09:28:14 AM »
Shakedown Street to Wall Street, what a long strange trip it's been.  ;)

A long strange trip indeed.

I'll be working on taking my grilled cheese and lot burrito business public soon- any takers?

PDXTabs

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Re: Psychedelic and Magic Mushroom Stocks
« Reply #22 on: January 04, 2021, 10:38:27 AM »
I notice a lot of articles on Ketamine as a tool against treatment resistant depression.  Kind of does a brain reset on people and gets the out of the rut.

Yup. But where is the money in Ketamine? It is out of patent and cheap to synthesize. The problem with getting it to people is political in nature, not technical or economic.