Today's Idea: Filament Health's (FH.NE) psychedelics play

I don’t know the first thing about psychedelics. Rather, that’s what I would have been saying back in 2020 when the psychedelics sector was experiencing an unprecedented breakout period. Maybe it was because of mainstream media or perhaps it was my nagging parents, but I have always feared psychedelics. Back in my youth, the Devil’s Lettuce was able to work its way into my heart, but I had decided I would rather die than roleplay as Mario. To some extent, I still fear psychedelics.

However, having worked for Equity Guru for over a year now, I experienced an eye-opening realization regarding the psychedelics sector. Without the use of any psychedelics. Impressive, I know. Through countless hours of research, I came to understand that psychedelics won’t kill me, misuse and miseducation will, just like any other substance. While this wasn’t the most profound realization, it was one that the markets had come to almost simultaneously in 2020. Why?

On October 26, 2020, COMPASS Pathways (CMPS.Q) announced its listing on the NASDAQ Stock Exchange following a successful $146.6 million Initial Public Offering (IPO). For context, COMPASS is a mental health care company focused on accelerating patient access to evidence-based innovation in mental health. As you probably could have guessed, this includes psychedelics.

“We are on a mission to transform mental health care and I know that every member of our 60-person team shares our strong sense of purpose and our determination to reduce the personal and economic burden of mental health suffering,” saidGeorge Goldsmith, CEO and Co-founder of COMPASS.

COMPASS was essentially a pioneer of the psychedelics sector. The company is credited for the development of a new model of psilocybin therapy, whereby COMPASS’ synthetic psilocybin, COMP360, is administered in conjunction with psychological support, otherwise known as psychedelic-assisted therapy. However, it isn’t as simple as handing a patient psychedelics and calling it a day. There are numerous hoops a company needs to jump through first.

COMPASS did exactly that. On October 23, 2018, the Company received Breakthrough Therapy designation from the US Food and Drug Administration (FDA) for its COMP360 for treatment-resistant depression (TRD). Shortly after, COMPASS conducted various studies, including its Phase II/B trial for the treatment of TRD in the United Kingdom (UK), Netherlands, Canada, the US, and Ireland.

With this in mind, COMPASS put in the work to become the first psychedelic drug company to go public on a major US exchange. Similarly, in the same year as COMPASS, Mind Medicine Inc. (MMED.NE) became the first psychedelics company to go public on Toronto’s NEO Exchange. In addition to its experiential therapies utilizing psychedelics, MindMed’s 18-MC drug candidate uses ibogaine, a psychoactive substance, to treat addiction.