Hours after psychedelic leader Compass Pathways (NASDAQ:CMPS) announced Phase IIb results from the largest modern study on a psychedelic substance, the stocks of most psychedelic companies holistically took a nosedive despite generally positive results.
Peter Theil-backed Compass published data revealing that a strong dose of its Comp360 medication (a psiloCybin (NEO:CYBN)-derivative in a crystalline form) helped reduce depression in patients suffering from the treatment-resistant mental health issue.
While overall positive, results indicated that 179 of the 233 participants in the trial experienced treatment-emergent side effects. Compass, however, said that except for 12 patients, the rest experienced mild adverse events like headache, nausea, fatigue, and insomnia.
Still, the news generated mixed feelings in investors and drove the stocks of the London-based biotech company down more than 22% when the results were published in early November, and they have been trading low ever since.
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Not only did Compass stock nosedive, other big firms in the psychedelic space including MindMed (NASDAQ:MNMD, NEO:MMED), Cybin (NEO:CYBN), and ATAI were also affected by the study results. The Horizons Psychedelic Stock Index ETF fell 11% after the study was published, signaling a broader dissatisfaction amongst investors.
However, psychedelic companies feel that Compass Pathways results validated their efforts to develop next-generation medicine for treating mental health issues.
“We think the results are really positive,” James Lanthier, CEO of Mindset Pharma told Proactive. “We think that Compass’ stock had risen before the news of the result, and, this [stock changes] was probably retail profit-making, that I don’t think has anything to do with the actual substance of the news.”
Lanthier noted that the results validate Mindset’s strategy “to make superior next-generation drugs.” Mindset is working on developing several families of psychedelic compounds, as well as an innovative process to chemically synthesize psilocybin.
“I think it’s a great milestone for the psychedelic space. It’s a statistically significant improvement on the depression endpoints that they chose to study,” Lanthier said. “In terms of our dialogue with investors, we don’t view this as negative at all. I think the overall trajectory of medical psychedelic space, if anything, is even better than it was before.”
Numinus Wellness Inc, a Vancouver, British Columbia-based biotech organization, also said that the results work in favor of the company’s vision.
“The results announced by Compass Pathways provided further validation for the industry, and especially for organizations like Numinus, whose mission is to advance the technology and scale accessibility for patients who would benefit from psilocybin-based therapies,” Payton Nyquvest, Numinus CEO told Proactive.
Nyquvest said: “The Numinus model, comprised of the bioscience lab, R&D clinical trials, and patient-serving clinics, is strategically positioned to support the ever-increasing demand for psychedelic-assisted psychotherapy and supportive treatments.”
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