Medicinal Mushrooms: The Next Billion Dollar Industry? - munKNEE.com
Tuesday , 24 November 2020

Medicinal Mushrooms: The Next Billion Dollar Industry?

The enormous potential of medicines based on edible (functional) mushrooms and magic (psychedelic) mushrooms to treat depression, anxiety and addiction health issues has some whispering that psychedelics are the next billion dollar industry given that Big Pharma has largely walked away from mental health research.  As such, the playing field is wide open for smaller biopharmaceutical companies to become actively involved in the research, development and introduction of such products.

Written by Lorimer Wilson, Managing Editor of munKNEE.com – Your Key to Making Money!

To track the growth – and price performance – of those companies in the sector munKNEE.com has created The Medicinal Mushroom Stock Index to complement its Pure-Play Pot Stock Index. The 12 constituents in the index are highlighted below.

According to Statista the mental health services sector in the U.S. is a $225 billion per year market and psychedelic drugs have the potential to provide effective treatment options for mental health disorders that afflict more than 1 billion people.

A 2018 report by the Lancet Commission estimates that mental health disorders will cost the global economy $16 trillion between now and 2030 in lost productivity so, with so much at stake, there is plenty of room in the marketplace for both functional mushrooms to improve brain function and mental health (the functional (edible) mushrooms market is estimated to be a $23.3 billion market that will have a very solid 8.04% CAGR from now through 2025) along with psychedelic drugs to treat mental health disorders.

1. Compass Pathways (CMPS)

CMPS is the early industry darling in the psychedelics space given that its psilocybin-based therapy for treatment-resistant depression is in Phase 2 of clinical trials and it has received Breakthrough Therapy Designation for its research from the Food and Drug Administration (FDA).

2. MindMed (MMEDF)

Several other psychedelics companies have capitalized on the increased attention on psychedelic stocks with MindMed receiving the most attention as it has three drug initiatives already in Phase 2 with several other initiatives in Phase 1 trials including one with the University Hospital Basel’s Liechti Lab that combines MDMA and LSD.

3. Mind Cure Health (MCURF)

Recognizing that bringing licensed and approved psychedelic drugs to market to treat mental conditions could take as long as 10 years and potentially cost $100s of millions, Mind Cure has devised a long-term strategy to get there by developing products from those dozen or so species of edible (“functional”) mushrooms that are recognized as providing medicinal benefits (as opposed to the 100 or so “magic mushroom” species containing the highly psychoactive substance, psilocybin).

Because functional mushrooms have health-promoting properties that are seen to promote brain health through supporting the growth and maintenance of neurons to help manage occasional stress there are direct synergies with psychedelic drugs that are being developed and tested to eventually treat stress-related disorders such as depression, anxiety, PTSD and addiction. In the meantime, functional mushrooms can be consumed as preventative aids to (hopefully) reduce the prevalence and severity of these mental health disorders.

While psychedelic drugs have blockbuster potential over the longer term to generate a number of medicinal breakthroughs in multi-billion treatment markets, functional mushrooms also represent a multi-billion market and this market is already open for business today which will allow Mind Cure to offset some of the R&D costs associated with psychedelics research with near-term revenue streams from functional mushrooms.

On October 21, Mind Cure announced the acquisition of Epiphany360, a proprietary and cloud-based digital therapeutics platform that monitors, collects and generates evidence-based insights to optimize treatment and improve patient outcomes in mental health-related conditions and this moves Mind Cure into elite company.

From all indications Mind Cure Health, with a current market cap of only CAD$32M, has clearly set its sights on being a big-league player in the psychedelic space.

4. Mydecine Innovations Group (MYCOF)

MYCOF, a Denver-based company, has been very active in advancing its own psychedelics operations with the news that it has filed a provisional patent for a psilocybin-based psychedelic therapy enhancer for the treatment of certain psychiatric disorders, including enhancements to treatments for PTSD.

5. Numinus Wellness (LKYSF)

Numinus Wellness is a vertically integrated Vancouver-based psychedelic drug company combining clinical operations with psychedelic drug R&D and cultivation of Psilocybe mushrooms, for the purpose of extracting psilocybin from them, at its 7000 square-foot Health Canada licensed facility.

6. Champignon Brands (SHRMF)

Champignon’s strategy is to focus on breakthrough treatments of depression through the development of government-approved ketamine compounds and a network of ketamine-based treatment clinics.

In September, Champignon expanded its rapid-onset treatment service to include the FDA approved Spravato, or esketamine (a more potent version of ketamine), which is a nasal spray used in the treatment of adults with major depressive disorder (MDD) at its flagship clinic in Mississauga, Ontario.

7. Field Trip Health Ltd. (FTRPF)

Field Trip is active in the development and delivery of the next generation of psychedelic molecules and conducting advanced research on plant-based psychedelics such as ketamine which for years has been used as an off-label depression therapy (and horse tranquillizer –  and party drug!) and, given its potent analgesic qualities, has been introduced more recently as a treatment option for PTSD.

The company’s operational focus is ketamine-assisted psychotherapy clinics with a medium-term objective to have at least 75 clinics in operation within a 3 to 4 years time horizon. It already has clinics servicing New York, Los Angeles and Toronto and a fourth clinic for Chicago is under construction and is on track to have a total of six clinics by the end of 2020.

The company’s clinic operations represent an immediate (and potentially enormous) revenue stream and will provide a rich source of empirical data on psychedelic (ketamine) therapy and establish it as an attractive R&D partner for other psychedelics companies.

In addition, Field Trip is also active in developing psychedelics-related technology, such as its Portal and Trip psychedelics apps. The company sees the potential to generate subscription/licensing revenues both here and elsewhere in its operations.

8. Silo Pharma (SILO)

SILO is an early stage biopharmaceutical company focused on providing  proprietary psychedelic therapeutics to patients suffering from end-of-life anxiety, Alzheimer’s, depression, addiction, PTSD and obsessive-compulsive disorder.

9. Revive Therapeutics (RVVTF)

Revive entered a Phase 1 clinical trial in August with the University of Wisconsin System (UWS) to study the safety and feasibility of psilocybin in adults with Methamphetamine Use Disorder and has an exclusive option to obtain an exclusive, worldwide, royalty-bearing commercialization license to all rights, title and interest that UWS may have or obtain in any invention that results from the clinical study.

10. New Wave Holdings (TRMNF

New Wave focuses on active psychedelic compounds, functional mushroom product lines, and has developed an IP portfolio focusing on psilocybin, LSD, MDMA, and ketamine derived treatments for neuropsychiatric diseases.

11. Green Star Biosciences (GTSIF)

Green Star purchased Eleusian Biosciences Corp., a Toronto based company, in June to give it immediate access to the emerging psychedelic medicine sector and Eleusian’s two provisional patents related to the treatment of traumatic brain injuries and post-traumatic stress disorder (PTSD). Eleusian is focused on the development of therapeutics for multiple pathological psychological diseases based on psilocybin plus N-acetylcysteine (NAC) compounds.

12. HAVN Life Sciences (HAVLF)

HAVN is a biotechnology company engaged in the business of the research and development of psycho-pharmacological products, including the formulation of standardized psychoactive compounds derived from fungi.

Index Performance

The equal-weighted Index has a start date of October 9th to accommodate all 12 constituents as three of them were not even trading at the beginning of October.

The Index was down 1.5% week ending October 23rd with only 2 constituent stock prices going UP, namely:

  1. Numinus (LKYSF) +32.0%
  2. MindMed (MMEDF) +9.8%

The remaining 10 constituents went DOWN as follows:

  1. New Wave (TRMNF) -25.0%
  2. Green Star (GTSIF) -20.0%
  3. Mydecine (MYCOF) -18.2%
  4. Field Trip (FTRPF) -11.7%
  5. Revive (RVVTF) -10.5%
  6. Silo Pharma (SILO) -8.7%
  7. Mind Cure (MCURF) -6.3%
  8. Champignon (SHRMF) -5.1%
  9. Havn (HAVLF) -2.8%
  10. Compass (CMPS) -0.8%

If Compass is excluded from the analysis due to its comparatively high stock price then the Index went down 4.0for the week.

Future Medicinal Mushroom Stock Index reports may be published on a less frequent basis going forward due to the small number of constituents and the “penny-stock” nature of 10 of them.

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