In a June 22 research note, analyst Elemer Piros reported that ROTH Capital Partners initiated coverage on Mydecine Innovations Group Inc. (MYCOF:OTCMKTS; MYCO:CSE: 0NFA:FSE) with a Buy rating and a CA$3 per share target price. This makes the stock a potential tenbagger as its current share price is about CA$0.30.
Piros explained the rationale behind ROTH's Buy recommendation on Mydecine, formerly named NewLeaf Brands.
First, the concept and objectives Mydecine is pursuing are innovative and, thus, differentiate it from other biopharmaceutical firms, Piros highlighted. This Vancouver, British Columbia-based company is developing alternative medicines based on natural sources, such as psilocybins, for the treatment of mental health problems, Piros explained.
In doing so, Mydecine is pursuing an end the biopharmaceutical industry generally has avoided to date despite the longstanding existence of the idea, wrote Piros. For instance, academics having researched the use of psychedelic drugs as mental health therapeutics for 70 years.
"Mydecine is the first to treat post-traumatic stress disorder (PTSD) and smoking cessation with the natural form of psilocybin (MYCO-001)," Piros highlighted. Few treatment options exist for these medical indications.
Mydecine aims to modify psychedelic drugs to reduce the side effects of the MDMA component and shorten treatment time, Piros pointed out. Also, the company also is investigating the use of psychedelic drugs as a complement to psychotherapy, specifically for use on an infrequent basis, perhaps even only once.
"The combined approach is unprecedented from the medicinal and regulatory perspective," Piros wrote.
Second, Mydecine has potential stock-moving catalysts on the horizon, noted Piros. The next one, in Q4/21, is its investigational new drug meeting with the U.S. Food and Drug Administration (FDA). Subsequently, in Q1/22, the biopharma plans to begin two clinical trials of MYCO-001, a Phase 2 in smoking cessation and a Phase 2/3 in PTSD. Should those commence then, the former could be completed in Q1/23 and the latter, in Q4/23.
Third, Piros purported, MYCO-001 has blockbuster potential in both indications. It could be commercially launched in the U.S. for smoking cessation in 2026 and, with only a 0.5% market penetration, could generate about $2.5 billion in sales by 2031, ROTH estimated. For PTSD, MYCO-001 could be debuted in the U.S. in 2027 and, with just a 20% market share, could reach about $3 billion in sales in five years' time.
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