Filament Health Corp (OTCQB:FLHLF, NEO:FH) can count itself as the first and only company that has naturally derived psychedelics in clinical trials, according to analysts at Water Tower Research.
The analysts wrote that Filament’s "rare ability" to navigate the complexities of natural psychedelics extraction and standardization creates a white space opportunity to tap into the psychedelic drug market opportunity, valued by some estimates at $12 billion by the end of the decade.
They wrote that the company benefits strategically and financially from its partnership network, including exclusive out-licensing of its drug technology to third-party psychedelic drug developers for use in clinical trials for indications outside of Filament’s core focus of substance use disorders.
“This not only gives the company access rights to valuable safety data, but it also delivers pre-commercialization milestone-based revenue that can help partially fund its core activities,” they wrote.
“Commercialization licensing agreements offer considerable revenue upside potential in the longer term from royalties.”
As such, Filament has an earlier path to profitability than its psychedelics peers, the analysts highlighted.
“Filament may have the opportunity to out-license some or all its internal developments at the late stage of the clinical trial process, which would bring forward revenue by several years and allay significant upfront costs,” they wrote.
“Our assumptions indicate that should the out-licensing option be taken for its two most advanced programs involving PEX010, Filament could generate positive earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings before interest and taxes (EBIT) in 2026 and 2027.”
The analysts did not award the stock a rating or price target. Filament Health shares traded hands at US$0.08 on Tuesday afternoon.
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