In this article, we discuss 10 most promising psychedelic stocks according to analysts. If you want to see more stocks in this selection, check out 5 Most Promising Psychedelic Stocks According To Analysts.
Psychedelic drugs encompass a range of chemicals, including lysergic acid diethylamide (LSD) and plant-derived compounds. Psychedelics can be divided into two categories – empathogens and dissociative drugs, and serotonergic agents such as LSD. Both types of drugs can induce hallucinations and altered sensations, but dissociative drugs can also cause feelings of detachment from one’s body or surroundings. Psychedelics are typically classified as either natural or synthetic, depending on their origin.
Psychedelic Industry Outlook
According to Mordor Intelligence, it is anticipated that the market for psychedelic drugs will experience a compound annual growth rate (CAGR) of 7% during the forecast period of 2019 to 2027. The psychedelic drugs market was significantly impacted by the COVID-19 pandemic. Governments around the world implemented sudden lockdown measures, leading to an uptick in demand for psychedelic drugs as people experienced heightened levels of depression and stress. The World Health Organization reported a 25% increase in anxiety and depression cases globally in March 2022, which was attributed to the pandemic. Many individuals lost their jobs and were forced to remain at home, exacerbating mental health issues and driving market demand. While mental health concerns have eased as restrictions have lifted, the market is predicted to expand due to growing awareness of the need for treatment with psychedelic drugs for mental health issues and increased research and development of these drugs.
The progress of the psychedelics industry heavily depends on the outcome of clinical trials, which could either make or break its viability and potentially boost publicly traded companies. However, there is uncertainty regarding the legality of these medicines, and regulatory bodies like the US FDA are currently evaluating some drugs, which could lead to limited access to these substances. There are also ongoing efforts in the United States and Canada to better understand the psychedelics industry, and recent political adjustments have been made, such as Colorado’s decision to decriminalize psychedelic mushrooms in drug centers for those aged 21 and above starting in 2024. An advisory board may also add more psychedelic drugs to the legal system in 2026. Oregon is currently the only other state that allows the medical use of psychedelic substances.
The growth of the psychedelic drug market is being fueled by the rising number of cases of mental illness. In 2020, NAMI reported that 52.9 million people in the United States – equivalent to 21% of adults – were struggling with mental illness. This increase in mental health cases is a primary contributor to the expansion of the psychedelic drug market. Major players in the psychedelic drug market are Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), and Merck & Co., Inc. (NYSE:MRK). However, we focus on pure play psychedelic stocks in this article.
Our Methodology
For this article, we selected psychedelic stocks whose average price target estimated by analysts for one year is at least 50% above their current stock price as of February 24. From the resultant dataset, we picked 10 most prominent psychedelic stocks with highest upside potential based on average analyst price targets. With each stock we have mentioned its one-year price target estimate, taken from Yahoo Finance. The list is ranked in ascending order of the estimated price target.
Photo by Florian van Duyn on Unsplash
Most Promising Psychedelic Stocks According To Analysts
10. Mindset Pharma Inc. (OTC:MSSTF)
Number of Hedge Fund Holders: N/A
Estimated 1-year Target Price: $4.96
Mindset Pharma Inc. (OTC:MSSTF) is a Canadian company that specializes in creating and marketing psychedelic medications for the purpose of treating psychiatric and neurological conditions. Their primary focus is on the development of MSP-1014, a potential psychedelic drug. The company is located in Toronto, Canada.
On February 2, Mindset Pharma Inc. (OTC:MSSTF) announced that the United States Patent and Trademark Office (USPTO) has granted permission for another one of its Family 1 patent applications, identified as number 17/743,718. The title of the patent application is “Psilocin Derivatives As Serotonergic Psychedelic Agents for the Treatment of CNS Disorders.” The patent covers certain deuterated psilocybin analogs that belong to Family 1. Family 1 is a group of drug candidates that are inspired by psilocybin and have displayed better pharmacokinetic properties, efficacy, and safety profiles in pre-clinical studies, with fewer potential side effects and indications of increased target engagement. This application is a part of a family of applications that share a priority date of February 4, 2020.
In addition to Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), and Merck & Co., Inc. (NYSE:MRK), Mindset Pharma Inc. (OTC:MSSTF) is one of the most significant psychedelic stocks to invest in.
9. Cybin Inc. (NYSE:CYBN)
Number of Hedge Fund Holders: 3
Estimated 1-year Target Price: $5.75
Cybin Inc. (NYSE:CYBN) is headquartered in Toronto, Canada, and it is a biopharmaceutical company focused on developing psychedelic-based therapeutics. The company provides drugs to treat major depressive, anxiety, and alcohol use disorders, as well as neuroinflammation. It has also created EMBARK, a psychedelic-assisted psychotherapy. As per latest quarterly results, the company reported that its cash reserves totaled C$22.5 million as of December 31, 2022, and C$20 million as of February 14, 2023. Cybin Inc. (NYSE:CYBN) is one of the most promising psychedelic stocks to invest in.
On December 15, EF Hutton analyst Elemer Piros initiated coverage of Cybin Inc. (NYSE:CYBN) with a Buy rating and a $3 price target. Cybin Inc. (NYSE:CYBN) is working on developing alternative formulations and derivatives of psychedelic drugs, as per the analyst’s note. The analyst has stated that Cybin Inc. (NYSE:CYBN) has discovered innovative methods of modifying formulations and creating deuterated analogues of psychedelics, which has resulted in the development of new intellectual property.
According to Insider Monkey’s fourth quarter database, Samuel Isaly’s OrbiMed Advisors and Ken Griffin’s Citadel Investment Group are major stakeholders of the company, with positions worth $1.65 million and $36,632, respectively.
8. Seelos Therapeutics, Inc. (NASDAQ:SEEL)
Number of Hedge Fund Holders: 4
Estimated 1-year Target Price: $6.25
Seelos Therapeutics, Inc. (NASDAQ:SEEL) is a New York-based clinical-stage biopharmaceutical company that focuses on the development and commercialization of therapeutics for the treatment of central nervous system, respiratory, and other disorders. It is one of the most promising psychedelic stocks to invest in.
On February 6, Seelos Therapeutics, Inc. (NASDAQ:SEEL) commenced a Phase I ethnobridging study to compare the safety and pharmacokinetic profiles of SLS-002 in healthy adult Japanese and non-Asian subjects. The study, named SLS-002-103, aims to measure various elements, including dosage and administration, sample size, inclusion and exclusion criteria, endpoints, and blood sampling. The Pharmaceuticals and Medical Devices Agency in Japan and the U.S. FDA have endorsed and consulted Seelos on this study. Seelos hopes that the data collected from this study will aid in the design of a future global trial for patients with major depressive disorder at high risk of suicide by helping to determine the inclusion of Japanese subjects.
According to Insider Monkey’s fourth quarter database, 4 hedge funds were long Seelos Therapeutics, Inc. (NASDAQ:SEEL), and Jeffrey Gendell’s Tontine Asset Management is the largest stakeholder of the company, with 4.90 million shares worth $3.3 million.
7. Enveric Biosciences, Inc. (NASDAQ:ENVB)
Number of Hedge Fund Holders: N/A
Estimated 1-year Target Price: $8.50
Enveric Biosciences, Inc. (NASDAQ:ENVB) is a Florida-based biotechnology company, engaged in the development of small-molecule therapeutics for the treatment of anxiety, depression, and addiction disorders. After Enveric Biosciences, Inc. (NASDAQ:ENVB)’s reverse split, Alliance Global Partners analyst James Molloy revised the firm’s price target for the company to $7 from $1.25 while maintaining a Buy rating on its shares on November 17. The analyst’s valuation model assigned EVM-201 for Anxiety Disorders a worth of $2.75 per share, EVM-301 for mental health at $2 per share, and valued the remaining technology, including the Psybrary machine learning asset for drug discovery, along with the cash at $2.25 per share, resulting in the $7 per share valuation.
6. Relmada Therapeutics, Inc. (NASDAQ:RLMD)
Number of Hedge Fund Holders: 18
Estimated 1-year Target Price: $13.38
Relmada Therapeutics, Inc. (NASDAQ:RLMD) is a Florida-based clinical-stage biotechnology company, focused on developing various products for the treatment of central nervous system diseases and other disorders. It is one of the promising psychedelic stocks according to analysts.
On December 8, Joon Lee, an analyst at Truist, decreased the firm’s price target for Relmada Therapeutics, Inc. (NASDAQ:RLMD) from $7 to $4 and maintained a Hold rating on its shares. The analyst’s decision was based on the recent announcement from the company that its second Phase 3 trial of REL-1017 in MDD, as an adjunctive therapy, RELIANCE I, did not succeed, following the first Phase 3 failure as a monotherapy in RELIANCE III trial. The analyst also expressed pessimism about the chances of RELIANCE II working and the future prospects of REL-1017, resulting in a “poor” outlook. Consequently, he reduced the price target to reflect the company’s present cash per share value.
According to Insider Monkey’s fourth quarter database, 18 hedge funds were bullish on Relmada Therapeutics, Inc. (NASDAQ:RLMD), compared to 23 funds in the prior quarter. David Kroin’s Deep Track Capital is the largest stakeholder of the company, with 2.8 million shares worth $9.90 million.
Like Johnson & Johnson (NYSE:JNJ), Pfizer Inc. (NYSE:PFE), and Merck & Co., Inc. (NYSE:MRK), Relmada Therapeutics, Inc. (NASDAQ:RLMD) is one of the premier psychedelic stocks to monitor.
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Disclosure: None. 10 Most Promising Psychedelic Stocks According To Analysts is originally published on Insider Monkey.
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