Mydecine Innovations Group: Research program moving to the next level

Proactive Published 07/09/2021

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Mydecine Innovations Group is a biotech and life sciences company developing and commercializing new therapies for mental health and other conditions. The company has two therapies which are at phase II clinical trial stage. Both of these use Mydecine’s proprietary formulation MYCO-001, which is a purified form of psilocybin, a psychedelic compound derived from mushrooms.

Since our initiation of research coverage in June 2021, Mydecine has made significant new announcements on the progress of the business. The company announced a five-year research agreement with Johns Hopkins University School of Medicine (Sedar release Aug 18th 2021), which extends the length and scope of Mydecine’s existing collaboration with Johns Hopkins. The program will continue to research the use of psychedelics for nicotine addiction and will add further projects.

Johns Hopkins is a world-leading medical research institution, consistently ranked among the top three in the US, and we argue that this partnership provides a strong platform for furthering Mydecine’s proprietary drug developments.

Also in recent weeks, the company announced second-quarter results. These are in line with our expectations, and we reiterate our existing financial forecasts (details p3-4).

Johns Hopkins partnership and other progress

Within the rapidly emerging sector for psychedelic-derived medicines, we argue that Mydecine presents some compelling differentiators:

A cohesive strategy for creating IP which can be defended and monetized
Health Canada Scheduled 1 Drugs and Substances Dealer’s License
Addressable markets of US$75bn (our estimate) which are underserved by existing therapies
A network of partnerships in research, testing, and commercialization, in addition to the Johns Hopkins collaboration. We detail these on p2
Revenue growth in the 2021-2023 timeframe is driven by the Mindleap technology platform which connects practitioners with patients

During Q4 2021 we anticipate significant catalysts for the stock price, including IND meetings for the company’s proprietary drugs for PTSD and for nicotine addiction.

We believe there is scope for substantial revaluation of the shares. There are currently three psychedelic medicine companies with valuations above US$1bn and we argue that Mydecine is already at a comparable level of maturity with these peers. In our initiation report (June 30th 2021) we outlined a base case scenario for a stock price of CAD2.10, which represents 360% upside from the current level.

Investment conclusion

Year end Dec 31 · 2020 · Current · 2022 · 2023

Revenue (CA$-000's) · 59 · 75 · 13,920 · 126,988

EPS (CAD$) · (0.24) · (0.11) · (0.09) · 0.06

In order to execute on its ambitious development pipeline, Mydecine will leverage a network of external relationships to extend its knowledge base and its market reach. The following summarises some of the key relationships:

Clinical trial partners:

University of Alberta, Canada: Clincal trials using psilocybin for PTSD. Also in conjunction with its work with the University of Alberta, Mydecine has formed an exclusive partnership with Applied Pharmaceutical Innovation, a not-for-profit organisation that supports the development of innovative new drugs
University of Western Ontario, Canada: Clinical trials using psilocybin for PTSD
Leiden University, Netherlands: Clinical trials using psilocybin for PTSD

Other academic partners:

Macquarie University, Australia: World’s first trials in a laboratory setting to measure the neuro-cognitive effects of microdosing with psychedelics
Imperial College, UK: Partnership with Principal Investigator Dr. David Erritzoe to research psychedelic medicines
Johns Hopkins University School of Medicine, USA: Five-year research agreement covering nicotine addiction and other indications

Other partners:

ProPharma Group is a leading provider of regulatory and compliance services to the pharmaceutical and biotech industries, engaged by Mydecine to assist the company in its FDA approval processes
ethica CRO is a leading Contract Research Organisation (CRO), engaged by Mydecine to manage the company’s clinical trial processes

The following map summarises the key research and clinical trial sites:

Partnerships - research, clinicals trials, and commercialization

Research and clinical trial sites