How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry
LONDON, Dec. 3, 2020 /PRNewswire/ -- 2021 could be a big year for this soon-to-be $16-trillion biotech opportunity. More importantly, it could be a big year for companies pioneering a new form of therapy that could effectively treat the world's #1 disability. It's a disability that's costing the economy $1 trillion in lost production every single year. In fact, the revolutionary treatment could be at our doorstep by 2021. And the next few months are critical. Mentioned in today's commentary includes: Constellation Brands, Inc. (NYSE: STZ), Molson Coors Beverage Company (NYSE: TAP), Altria Group, Inc. (NYSE: MO), GW Pharmaceuticals plc (NASDAQ: GWPH), Curaleaf Holdings, Inc. (OTCQX: CURLF).
Why? Soon, global spending on mental healthcare will hit $16 trillion, and researchers say it has huge implications for people with…
- Depression and anxiety
- PTSD
- Addiction
- And many other disabling diseases…
And one company, Lobe Sciences (LOBE; GTSIF), is on the cutting edge of this new 'transformational medicine."
Breakthrough Therapy Backed By Science
Working in partnership with the University of Miami, Lobe Sciences is on the leading edge of this biotech breakthrough.
Lobe points to a Johns Hopkins study of the efficacy of these compounds for treatment of depression and anxiety (a market to grow to $18.9 billion by 2026) that concluded that psilocybin eased depression and anxiety in patients with life-threatening cancer.
But that was back in 2016. Since, a collection of new studies has taken this far beyond cancer patients and into the general population suffering from widespread depression, anxiety and PTSD. According to Alan Davis, the author of one such 2020 study and a faculty member at Johns Hopkins University and Ohio State University, psilocybin's effect was "more than four times greater".
Smart Money Is Going All In
Tim Ferriss, angel investor extraordinaire funded Johns Hopkins' psychedelic research center with over $2 million. Ferriss says this is the world's proof-of-concept demonstration--the Silicon Valley of psychedelics.
Brad Loncar, lead biotech investor at Loncar Investments, pinpointed the "ultimate sign for investors" when big pharma got its first approval for a psychedelic-based anti-depressant in the Spring of 2019.
Multi-billionaire and PayPal co-founder Peter Thiel has put big money into this industry. Mike Novogratz has also been selling the psychedelic space for years, lauding its massive investment merits.
Johnson & Johnson has been pouring money into R&D for years. When the FDA approved SPRAVATO ketamine-like nasal spray as an antidepressant in 2019, it was a signal to investors that a new side of biotech was about to explode.
And Lobe is close to a transformational PTSD development, too. Among four others, it boasts a patent pending for a nasal mist transducer device that aims to offer a completely transformational approach to PTSD treatment. Development is already under way and the next news to come out may not just be transformational for PTSD—but for the company, as well.
The Multi-Billion Mental Health Market
As of 2020, more than 264 million people of all ages suffer from depression, according to the World Health Organization. Additionally, 1 in 13 people will develop PTSD at some point in their life. During the global pandemic… 1 in 20 women… and 1 in 50 men were newly diagnosed. Depression is now the No. 1 cause of disability in the world.
Considering many other mental disorders that psychedelic researchers are working to address, this could be a massive market opportunity. The functional mushroom market is expected to be worth more than $34 billion by 2024, according to data from Modor Intelligence. And Lobe Sciences (LOBE; GTSIF) is working hard to carve out its own piece of this market. Lobe already has five provisional patent applications on its therapy and methods... and the company's future looks bright.
The 'Brain Science' Boom
Just over the past year, Denver, Oakland, Santa Cruz, Ann Arbor, Oregon and Washington DC decriminalized psilocybin. The therapeutic potential of psychedelic drugs to treat the profound distress of Western society is becoming undeniable. Even the FDA thinks so.
Similar research has been shown to be 80% effective... compared to 20%-30% for big pharma treatments. More studies will be published soon… building on this base of research.
Surrounded by a patent moat and armed with revolutionary tech, Lobe Sciences (LOBE; GTSIF) is perfectly positioned to take advantage of the 2021's transformational science trend.
The Same Pattern Has Already Occurred In The Cannabis Boom
Constellation Brands (STZ), a beverage conglomerate with a stake in everything from Corona to Modelo, shook up the pot world in 2017 when it invested $191 million for a 9.9% stake in Canopy Growth, and followed it up a year later sinking an additional $4 billion into Canopy Growth Corp.
And earlier this year, Constellation raised its stake in the promising cannabis giant once again, investing another $174 million into Canopy, raising its stake to 55.8%. David Klein, CEO of Canopy Growth, noted "This additional investment validates the work our team has done since attracting the initial investment in 2017. It also strengthens our ability to pursue the immense market and product opportunities available to Canopy in Canada, the US and other key global markets."
Molson Coors (TAP) is another iconic multi-national beer company, with brands that are recognizable across the United States and Canada. Not to be left behind in the marijuana boom, Molson Coors is also developing a line of non-alcoholic cannabis-based beverages with its partner, the HEXO Corporation.
In August of this year, Molson Coors finally unveiled its cannabis drinks in its joint venture with HEXO. The lineup includes five new beverages containing CBD and THC. CEO Scott Cooper, CEO of Truss Beverage, the product of the joint venture, noted, "We're thrilled to be introducing Canadians to new beverage options and leading the cannabis beverage category with our variety of products."
Big Tobacco is all in on this market, as well. Altria (MO) got into the marijuana game in a big way in 2018, investing $1.8 billion in the Canadian pot firm Cronos Group. The deal sent Cronos stock into the stratosphere and positioned Altria as one of the first mainstream tobacco firms to take a hard line in support of the cannabis market.
Year-to-date, Altria has seen its share price fall by 18%. But that doesn't mean it's not still a good buy. As the cannabis industry continues to gain traction, Altria offers potential shareholders something many other stocks in the industry don't: dividends. Altria has maintained its high-dividend yield for years now, and though its share price has slipped slightly this year, its dividend payouts are still appealing.
GW Pharmaceuticals (GWPH) got into the cannabis game through a major industry milestone. Back in 2018, GW Pharma received approval for its cannabis-based drug Epidiolex from the Federal Drug Administration. It was the first FDA approved drug based on cannabis for the American market…and GW Pharma's stock enjoyed a huge boost at the news.
GW had a stellar third-quarter, reporting a yearly growth in revenue of 50% due in part to the sales of Epidiolex. Justin Gover, GW's CEO explained, "We are pleased to report strong revenue growth in the 3rd quarter despite the challenges presented by COVID-19. Epidiolex meets a serious unmet need within the field of epilepsy and we expect the product to demonstrate continued strong growth in the months and years ahead," adding, "The recent expanded indication for the treatment of seizures associated with TSC has been very well received by patients, clinicians and payers."
Curaleaf Holdings (CURLF) is an up-and-coming U.S. cannabis company with big plans for vertical integration. The multi-faceted company has its hands in all levels of the cannabis game, where it cultivates and manufactures a wide range of products, operates dispensaries, and much more.
The Massachusetts-based company has seen significant growth since it went public in what the Motley Fool called "the largest cannabis debut in history." And it's lived up to the hype. Curaleaf has had a stellar year, with its stock price bouncing from a low of $3.16 back in March to an all-time high of $10.88 at the time of writing.
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