What do billionaire Peter Thiel, Shark Tank celebrity Kevin O’Leary, and the former CEO of the largest cannabis company in the world all have in common?
They’ve all invested millions in something that, just 10 years ago, would’ve been unheard of…
Or more specifically, psychedelic medicine.
While most folks will equate psychedelics with the hippie movement, acid trips, and illegal substances, some of the most successful investors on the planet are ponying up small fortunes to get an early piece of an industry that some are now calling the next evolution of Big Pharma profits.
Because scientists have recently discovered that some psychedelic substances can effectively treat dozens of diseases far better than anything else currently available on the market.
And the early research has been so convincing that the FDA is now fast-tracking four FDA trials for some of these treatments.
You see, the FDA assigns what it calls “breakthrough status” to treatments where scientific evidence indicates there could be a substantial improvement over currently available treatments.
In short, “breakthrough” status means cutting the red tape so these treatments can get into commercial development much faster. That’s exactly what’s happening now, which is why you have some of the richest people in the world investing in this space.
The FDA is essentially telling investors that psychedelics, like medical treatments, are going to be fully supported by the federal government.
So what’s so special about psychedelics?
Well, as it turns out, some of these psychedelic compounds can treat all kinds of mental illnesses better than what’s currently available for patients today. We’re talking about everything from anxiety and depression to addiction and PTSD.
And what would the value of such a thing be?
Looking at what is currently spent to treat certain diseases related to mental illness, you’re looking at hundreds of billions of dollars. Check it out:
- $35 billion to treat alcohol addiction
- $78.5 billion on PTSD
- $150 billion for depression
- $39 billion for smoking cessation
Combined, these four alone add up to more than $300 billion — and these are all diseases that could be completely cured with certain psychedelic medicines.
You can see now why billionaires are lining up to get an early piece of this action. But you don’t have to be a billionaire to get some for yourself.
There are a handful of psychedelic companies you can invest in right now. These include Cybin Inc. (NYSE: CYBN), atai Life Sciences (NASDAQ: ATAI), and Braxia Scientific (OTCMKTS: BRAXF).
But just like any industry, there’s always one company that really sticks out... one stock that can turn a few thousand bucks into a few hundred thousand.
We’ve seen it in biotech, we’ve seen it in cannabis, and we’ve seen it in precious metals. And when it comes to psychedelics, there’s no doubt about which stock is the one the smart money is betting on right now. And that stock is…
MindMed Inc. (NASDAQ: MNMD)
MindMed Inc. is building an IP portfolio and undertaking clinical trials of medicines based on psychedelics. It’s also growing its pipeline through acquisitions, joint ventures, and collaborative development programs.
What makes this one particularly interesting, however, is its focus…
You see, this company is developing two categories of medicines based on psychedelic substances: hallucinogenic therapies and non-hallucinogenic medicines. It’s the second one that makes this particularly attractive.
One thing to understand is that the primary obstacle to getting these medicines into the marketplace is strict regulatory control.
Regarding hallucinogenic therapies, direct supervision by a therapist or doctor is required, and these substances can only be used in a regulated clinic.
But for non-hallucinogenic psychedelics, with FDA approval, all that’s needed is a doctor’s prescription and a pharmacy pickup.
So when we look at the psychedelics space, the non-hallucinogenic therapies are being seen as the low-hanging fruit — and this company is working with two non-hallucinogenic psychedelics right now.
The first treatment that MindMed is using is derived from ibogaine. It’s currently preparing Phase 2 FDA clinical trials for opioid use disorder.
Today, 11 million Americans are misusing opioids and this operation is developing an anti-addictive molecule based on ibogaine that treats addiction as a brain disease. Not only is something like this a game-changer, but it’s something that can be done in coordination with a major pharmaceutical company or just sold outright to one.
Unlike the way medical cannabis came onto the market, psychedelics do have to work directly with the FDA. The downside to this is the onerous FDA process. The upside –– which is major –– is that Big Pharma can play in this space because the FDA is involved, and, once approved, these medications can be sold throughout pharmacies all across the country. This should not be trivialized at all.
Now, the second non-hallucinogenic psychedelic that this company is working on right now is microdosed LSD to treat ADHD. The company is preparing for Phase 2 clinical trials on this one right now.
It's worth noting that there’s a growing trend in Silicon Valley to take small amounts of LSD with no hallucination effect to increase focus and creativity. This company is undertaking clinical trials to prove it actually works. The anecdotal evidence suggests that it does.
Of course, anecdotal evidence isn’t enough, but make no mistake: With FDA approval, the opportunity here is huge.
Take Spravato, for instance.
Spravato represents the first psychedelic treatment approved by the FDA for a psychiatric condition. It’s a non-hallucinogenic psychedelic treatment, and by 2024, it's expected to deliver sales in excess of $1.7 billion. That’s billion with a “B.”
The upside of FDA-approved psychedelics is undeniable, and while there are also plenty of opportunities for hallucinogenic psychedelics to successfully pass FDA trials, it’ll likely be the non-hallucinogenic ones that will get to market first.
And what makes this particularly interesting is that we’re now seeing some indication that psychedelic medicines could be far superior to current FDA-approved medications on the market designed to treat addiction.
The thing is, when it comes to treatment for addiction, current FDA-approved treatments don’t actually address the mechanism of addiction. They’re substitution therapies — like nicotine patches, for instance — and those have addictive properties too, as well as low efficacy and high rates of relapse.
When it comes to opioid addiction, this is a huge problem.
The opioid crisis in America costs the economy $500 billion a year, with nearly 2 million people suffering from opioid use disorder. Yet when we look at treatments, success rates are tragically low.
Take Suboxone, for instance, which is used to “treat” opioid addiction.
The failure rate of Suboxone is about 90% after a 12-week treatment. This is hardly an effective treatment and, quite frankly, is just substituting one addiction for another.
Meanwhile, a study using ibogaine has demonstrated that 50% of opioid addicts are opiate-free just four weeks after withdrawal.
This is a very big deal, and the FDA is taking notice.
Again, this is why we’re seeing so many psychedelics companies getting breakthrough status from the FDA.
And in terms of first-mover advantage, MindMed has it.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.