Noble Capital has initiated coverage on psychedelics company PsyBio Therapeutics Corp with an Outperform rating, with its analysts citing the company's pathway to clinical development as a driving force behind the stock.
The research firm's analysts put a price target of $2 on the stock, which is currently hovering around $0.30.
Coconut Creek, Florida-based PsyBio is pioneering the next generation of targeted psychoactive medications for treating mental illness and neurological disorders.
READ: PsyBio Therapeutics initiates new program to study NMDA receptor antagonists for potential activity against a variety of human health conditions
The Noble analysts noted that the firm’s proprietary manufacturing process for making psilocybin as well as related psychedelic analogues like norbaeocystin, baeocystine, aeruginocin, and DMT, which it is developing as both monotherapies and combinations could increase efficacy at lower doses.
In a note to clients, the analysts cited PsyBio’s biosynthetic manufacturing as one of its strengths.
“The company can produce large quantities of these compounds at pharmaceutical specifications for potency, stability, and purity. This reduces the variability and cost compared with other methods. Its patent portfolio covers its biological manufacturing processes and the methods of use for combination therapies,” the Noble analysts wrote.
PsyBio is gearing up to submit its Investigational New Drug applications later in 2021, which they also cited as a key milestone towards clinical development. The company expects to begin clinical trials in 2022.
According to the analysts, the US Food & Drug Administration (FDA) and government regulators are now recognizing the potential for psychedelic drugs to treat mental illness, which they said gives “new credibility to the field” as well as increased investor attention.
“We value the company based its proprietary manufacturing technology, the potential uses for the indications in development, and comparative valuations of other companies developing psychedelics for psychiatric indications,” the Noble analysts concluded. “Our price target is based on a market valuation of $250 million with 125 million shares outstanding for a price target of $2 per share.”
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