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FN Media 19-Sep-2023 8:31 AM
FN Media Group Presents GlobalInvestmentDaily.com Market Commentary
London - September 19, 2023 Depression is costing the economy $1 trillion in lost production every single year. Yet, a classical compound that even the FDA has twice designated a "breakthrough therapy" is shaping up to potentially be the revolutionary treatment that big pharma has been waiting for. Mentioned in today's commentary includes: Johnson & Johnson (NYSE:JNJ), AbbVie Inc. (NYSE:ABBV), Atai Life Sciences NV (NASDAQ:ATAI), Compass Pathways PLC (NASDAQ:CMPS), Mind Medicine (MindMed) Inc. (NASDAQ:MNMD).
Scientists say this "miracle compound" can help reset the brain and has huge implications for the treatment of people with
But this is a game of patents, and with multi-billion-dollar IP at stake, Big Pharma certainly isn't wasting any time...In fact, Johnson and Johnson (NYSE:JNJ) recently reported massive sales growth for its up-in-coming blockbuster drug for depression, SPRAVATO, which is the only FDA-approved psychedelic medicine on the market.
As reported on JNJ's most recent earnings call, US & worldwide sales for SPRAVATO were up 93.2% & 98.6% y/y respectively, making it the fastest growing drug in its neuroscience portfolio (by far); and with US $170 million in Q2 2023 sales, J&J CEO, Joaquin Duato, went out of his way on the earnings call to dub SPRAVATO its next $1 billion-plus product...
Some of the core team behind the SPRAVATO IP recently joined a small but emerging NYSE American listed company on the leading edge of the next biotech breakthrough...
That company expects to report Phase 2 clinical data in just a few months, and it recently announced a game-changing agreement to acquire a key strategic asset . The company? Cybin
Cybin (NYSE:CYBN) (NEO:CYBN) is on the leading edge of transformational psychedelic therapeutics , developing novel and proprietary therapeutics to improve clinical outcomes and the mental health and wellbeing of patients. The emerging biopharmaceutical company already has clinical validation of the novel, proprietary CYB003 molecule, which demonstrates a rapid-acting and robust psychedelic profile, but at a low dose.
Cybin's intellectual property portfolio encompasses several granted U.S. patents in support of its lead candidates - CYB003 and CYB004 and over 50 pending patent applications across 6 patent families.
Two of the biggest drivers of value for Cybin in the near-term include Phase 2 topline efficacy data for CYB003, expected to be released in the fourth-quarter of this year, and the Phase 1 data for CYB004, also expected before the end of this year.
On August 28, Cybin announced an agreement to acquire Small Pharma Inc in an all-share transaction that creates an international clinical-stage leader in novel psychedelic therapeutics. The companies' combined portfolios, at closing, will include two proprietary, advanced clinical programs in development for depression and anxiety disorders with demonstrated safety and efficacy.
De-Risking Safety and Efficacy: Near-Term Catalysts
Oppenheimer, which has initiated coverage on CYBN, is encouraged by the results so far, and believes the stock will have room to run further with new results expected before the end of the year.
The analysts expect the DMT acquisition to provide Cybin with "key synergies" as it "deepens focus on short treatment duration, expecting late 2023 readouts".
Likewise, in an August 28, 2023 company update, H.C.Wainwright & Co. reiterated its "buy" rating on CYBN, with a price target of US $10.00 per share, after the recent Small Pharma acquisition, which it sees as strengthening Cybin's position in short-acting psychedelics.
The acquisition also gives Cybin access to Small Pharma's SPL026, "which has already demonstrated potential in MDD including rapid antidepressant effects that appear durable for six months based on datasets reported in January and April 2023, H.C.Wainwright noted.
The Proprietary Molecules That Are Changing Mental Health
"The molecular structure of psilocybin, a naturally occurring psychedelic compound found in magic mushrooms, allows it to penetrate the central nervous system and the scientific and medical experts are just beginning to understand its effects on the brain and mind and its potential as therapeutics for mental illnesses," according to Johns Hopkins Center for Psychedelic and Consciousness Research.
What makes Cybin's pipeline so important to the new world of mental health is that from the start, it has set out to create novel and improved psilocybin molecules, while others in the space have been relying on generic materials that are not proprietary. This is a space where proprietary IP is absolutely essential, and Cybin now has 29 patents granted and 158 patents pending. That makes it the leader of intellectual property in this space.
Cybin has taken two molecules--DMT and psilocybin--and focused on the deuteration, which improves the molecules' efficiency. In other words, it eases the path of the molecule into the brain, making it much faster and much more potent with a lower dose.
Lower doses mean more potency, and proprietary materials will have to lead this charge, giving the company with the most IP a huge advantage.
"Getting it out of the periphery and into the brain is now becoming much faster, without causing side effects," says Drysdale. "If you get the molecules out of the blood stream and into the brain, you're making it more efficient".
There is an enormous need to address Major Depressive Disorder (MDD), the leading cause of disability due to mental illness.
Between 2010 and 2018, the cost of this illness in the U.S. alone soared 38%, affecting 17.5 million adults at a cost of a devastating $326 billion. That bill includes the direct medical costs of treating MDD, treating comorbidities, suicide-related costs and workplace productivity impacts. And that was five years ago. The costs continue to mount.
Another major unmet need in the mental health space is an effective treatment for anxiety disorders, which affect an estimated 18% of the U.S. population alone, or more than 300 million people around the world. Anxiety disorders are the sixth leading cause of disability in adolescents and young adults. Cybin's CYB004 is hoping to address this need.
With the combined power of Cybin and Small Pharma and all the complex and proprietary IP that this merger brings together under a single umbrella, CYBN is positioned for big things in a space that desperately needs to cross the finish line on a new way to treat mental health.
With its IP catalogue, acquisition agreement, and near-term catalysts, Cybin's (CYBN) small $75-million market cap appears to be far below its potential for the coming months and years. with its expected stage 2 clinical data reveal, this may set up Cybin for an exciting 2024.
A New Era of Healthcare Backed by Big Medicine
Johnson & Johnson (JNJ) is a multinational healthcare behemoth, with its fingers in a myriad of sectors ranging from pharmaceuticals to medical devices and consumer health products. Within the vast expanse of J&Js portfolio, its pharmaceutical subsidiary, Janssen, ventured into the realm of mental health with the development of esketamine, marketed under the brand name Spravato. This nasal spray, which is a close relative of the anesthetic ketamine, received FDA approval for its use in treating treatment-resistant depression.
AbbVie (ABBV), a global powerhouse in the biopharmaceutical world, came into existence after its split from Abbott Laboratories in 2013. Since its inception, AbbVie has been laser-focused on developing treatments for a range of conditions, from rheumatoid arthritis to various forms of cancer.
The acquisition of Allergan by AbbVie brought with it a subtle yet significant pivot towards the psychedelic sector. Allergan, before its acquisition, had shown a keen interest in the potential of psychedelics, investing in research related to their use for mental health conditions.
Atai Life Sciences (ATAI), a clinical-stage biopharmaceutical company, emerged with a clear mission: to revolutionize the treatment of mental health disorders. Atais approach to mental health is both comprehensive and innovative. The company boasts a diverse pipeline of compounds, including a range of psychedelics, and has fostered collaborations with various companies to develop groundbreaking therapies.
Compass Pathways (CMPS) stands as a beacon in the realm of mental health care, with its pioneering research in the therapeutic use of psilocybin. Psilocybin, a psychedelic compound found in certain mushrooms, has been the focal point of Compasss research endeavors.
The primary thrust of Compasss research has been the potential application of psilocybin therapy for treatment-resistant depression. Through rigorous clinical trials and research initiatives, Compass Pathways seeks to legitimize and standardize the use of this compound in a therapeutic context
MindMed (MNMD) is a beacon of innovation in the neuro-pharmaceutical landscape. With its roots firmly planted in the exploration of psychedelic substances, the company seeks to unlock new treatment modalities for a range of mental health conditions. MindMeds research portfolio is as diverse as it is promising. The company is actively exploring the therapeutic applications of substances like LSD, MDMA, DMT, and psilocybin. Each compound, with its unique properties, offers a potential avenue for addressing conditions like anxiety, depression, and addiction.
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