3 Psychedelic Stocks to Buy on the Dip: Summer 2024 – InvestorPlace

While the cannabis industry has all but become legitimate in the United States, its not the only form of alternative medicine attempting to break through regulatory barriers. Compounds like psilocybin, lysergic acid and ketamine are all referred to as psychedelics, yet they may have medical applications which are just beginning tobe explored.

As such, several newly minted public companies have begun experimenting with ways to harness the therapeutic potential of these compounds. When these companies first went public, the excitement around their projects quickly spiked their trading value followed by a rapid selloff which put most of them in a significant dip.

Yet there are severalstrong psychedelicstocks to buy on the dip for potentially lucrative returns. Thats because several studies have shown that LSD, psilocybin and ketamine are all exceptionally effective at treating depression when administered in the correct doses. Thus, it may be just a matter of time before these companies have their moment in the sun.

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A broader play into alternative therapies,Atai Life Sciences(NASDAQ:ATAI) is currently researchingmultiple drugs based on psychedelic substances like ketamine,ibogaineand N,N-dimethyltryptamine (DMT). These compounds, while perhaps known for their recreationalusehave seen several peer-reviewed studies begin to explore their potential for treating mental health disorders.

In the case of ATAI, the company has several drugs derived from psilocybin, ketamine and DMT in the pipeline, with itsmost promising one COMP360, entering Phase 3 clinical trials as part of a co-development with another pharmaceutical company. Thiswideapproach to developing treatment does put a financial strain on ATAIs operations, but it improves the likelihood of a breakthrough and potential Food and Drug Administration (FDA) approval.

As such, ATAI is one of the best psychedelic stocks to buy on the dip, as itcurrently trades at a 93% discount on its initial public offering price.Any good news regarding one of its drugs could bolster its value rapidly.

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I mentioned earlier that ATAI is developing a drug called COMP360 with another company.That company isCompass Pathways(NASDAQ:CMPS), hence the COMP in the name. This drug is currently the only project in development for CMPS, which means the company represents a very different type of pharmaceutical investment than ATAI.

As such, investing in CMPS means committing to the psilocybin side of therapeutics. With this approach, investors know the direct catalyst relies on FDA approval for COMP360. Soletstalk about the studies behindCOMP360. Currently, CMPS offers its Phase IIb datasheet on its site for reference on its drugs efficacy. The Phase IIb trial focused specifically on patients with depression who were resistant to traditional anti-depressant compounds, meaningdrugslike selective serotonin reuptake inhibitors were ineffective.

Of the totalparticipants in the study, 20% reported sustained improvement and therapeutic effects by the 12th weekof the study. When you consider that these patients were already exceptionally resistant to treatment, thats quite impressive. Thus, COMP360 could be worth investing in through psychedelic stocks to buy on thedipsuch as CMPS.

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As the name of the company suggests,Cybin(NYSEMKT:CYBN) specializes in developing three psilocybin-based therapies, CYB003, CYB004, and SPL028, with other psychedelic compounds in preclinical testing.Currently, the stock trades in penny stock territory at just26 cents a share, which may concern some investors, but it isimportantto remember that thetrading history of the companyisfairlynewandits products are still vying for FDA approval.

Moreover, its psilocybin treatment,specificallythe Deuterated PsilocybinProgramhas been grantedbreakthrough treatmentstatus by the FDA for treating major depressive disorder following its Phase II trial success. This program has also been tested for treating alcohol abuse disorders and could be a breakthrough therapy for that category as well.

In the case of Cybin, investors may want to wait until the company can generate revenue, however. Becauseit is currently in a growth, research and development phase, the company has only reported losses for the last four quarters.

On thedate of publication, Viktor Zarevdid not have (eitherdirectly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.

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3 Psychedelic Stocks to Buy on the Dip: Summer 2024 - InvestorPlace