3 biotech actions to reinvent mental health treatment

Mental health issues are a growing concern in the United States. According to the National Institute of Mental Health (NIMH), almost 20% of adults, or 43 million people, suffer from some form of mental illness each year. Conditions can range from mild states like depression and anxiety to more serious conditions like dementia, bipolar disorder, and schizophrenia. Below, we’ll cover three pioneering biotech stocks with unique product offerings aimed at addressing the needs of mental illnesses:

ATAI Life Sciences

When you think of drugs like ketamine or psilocybin, you probably think of hippies and Woodstock, not medical treatments. ARTAI Life Sciences ARTAI try to reverse this narrative. The Germany-based company, which went public in mid-2021, was founded by Florian Brand, a serial tech entrepreneur who struggled with mental health issues early in life before overcoming them. After watching a close friend struggle with mental health issues before successfully self-treating with psychedelics, Brand realized that patients around the world were being underserved.

Science

According to ATAI’s website, the company’s mission is to “Pioneer the development of highly effective mental health treatments that address unmet patient needs.” ATAI’s pipeline includes drugs to treat anxiety, depression, schizophrenia, substance use disorders and traumatic brain injury. Psilocybin (the hallucinogenic compound found in “magic mushrooms”) and ketamine (a powerful anesthetic and painkiller) are both used recreationally. However, ATAI Life Sciences is embarking on the study of these drugs and others for their potential to treat mental health issues. Proponents of the treatments suggest positive effects on mood, emotional processing, and overall brain health.

Investor Perspectives

Because ATAI treatments are in the clinical research phase barring drastic changes, it is too early to invest in ATAI Life Sciences beyond a speculative bet.

Image source: Zacks Investment Research

Image: ATAI’s EPS estimates for the next 12 months (green line) overlaid on a price chart. ATAI is expected to be unprofitable over the next 12 months.

Like other biotech companies undergoing clinical trials, ATAI has yet to make an annual profit. Nevertheless, ATAI is worth watching from a distance. If the company can successfully demonstrate the merits of its treatments for mental health disorders, the rewards will be rich. ATAI has Peter Thiel, legendary Silicon Valley investor, and Cathy Wood, portfolio manager of the popular ARK Innovation ETF ARKK, as funders. Other public companies looking to roll out similar treatments include Cybin CYBN, Compass Pathways CMPS, Seelos Therapeutics SEEL, and Mind Medicine MNMD.

Biogene Inc

Unlike most biotech stocks, Biogen Inc. BIIB is highly profitable and has a deep and well-established drug pipeline. Founded in 1978 by several leading biologists, the company has offered treatments or solutions to some of mankind’s greatest health problems, such as neurological disorders, autoimmune diseases and cancer. Perhaps that’s why Biogen is in charge of offering a solution to Alzheimer’s disease.

Giving Alzheimer’s patients a glimmer of hope

Alzheimer’s disease is a progressive and irreversible disease that affects the brain’s ability to function properly. Currently, no cure exists, and as the disease worsens, patients face the debilitating experience of slowly losing memory and the ability to think in real time. Despite the gargantuan time and effort devoted to fighting the most common form of dementia, little progress has been made.

Biogen and its Japanese partner on the project Eisai ESALY provided a ray of hope in September when they announced that patients taking their drug Lecanemab were seeing a noticeable slowing of disease progression. Biogen is currently awaiting the results of the accelerated approval which are expected to be announced in the early months of 2023.

Investor Perspectives

Biogen’s fundamental framework paints a messy picture for investors. Although the company is highly profitable, sales and earnings growth has come to an abrupt halt in recent quarters as revenue from the company’s multiple sclerosis royalties and other existing drugs has declined. Nevertheless, all eyes are on Lecanemab and the future. When news broke in September that Lecanemab had slowed the progression of Alzheimer’s disease in study groups, Biogen shares jumped 40% on volume 1,255% above average –

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Pictured: BIIB jumped 40% in September after posting positive drug data. The stock is looking to find support at its 50-day moving average (red line).

Biogen is currently trending higher and is finding support at its 50-day moving average. If the company can secure accelerated FDA approval for the drug, the stock should continue to rise. As is always the case with biotech stocks, investors need to know their risk. FDA decisions entail a two-way risk; and when binary risk goes against you, the results can be devastating.

Therapeutic sage

Sage Therapeutics Inc SAGE is a biopharmaceutical company developing novel therapies for brain health disorders, including postpartum depression (PPD) and major depressive disorder. Although there are a plethora of anti-depression treatments available today, none specifically target PPD.

Helping New Mothers Overcome Postpartum Depression

Postpartum depression is common among new mothers. During and after pregnancy, rapid hormonal fluctuations put mothers at risk for mental disorders. PPD can lead to intense feelings of inadequacy as a mother, anxiety, sadness, and fatigue. In partnership with Biogen, Sage is working on a drug in development known as Zuranolone to treat PPD. If approved, the drug would be the first of its kind to treat PPD.

Investor Perspectives

Like Biogen and ATAI, Sage’s outlook largely hinges on upcoming data decisions. The company is yet to make a profit, however, the company’s partnership with industry leader Biogen ensures that the company is in a stable financial position.

Image source: Zacks Investment Research

Pictured: SAGE recently surpassed its 200-day moving average.

In November, the stock resumed its 200-day simple moving average, a level used by many investors to gauge a stock’s longer-term trend. In a recent statement, Sage noted, “From the perspective of people with depression, weeks matter, days matter, and missed moments matter. We believe that with Zuranolone, if approved, we can help transform the way depression is treated. »

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