Evotec, PsyBio Therapeutics, MorphoSys - Milestone in Development!

Long history

Currently, "magic mushrooms" are one of the hippest topics on the stock markets. But the history of mushrooms containing psychedelic substances goes back thousands of years. The Aztecs of Mexico already used the psilocybin-containing mushrooms for ritual and profane purposes as intoxicating drugs. But it was not until 1957 that Albert Hofmann, who had already discovered LSD, was the first to isolate psilocybin and psilocin as the active substances of the mushroom. The chemical structures of the main active substances are closely related to LSD, so they also produce similar psychoactive effects. In the 1960s, synthetically produced psilocybin was marketed under the name Indocybin® by the pharmaceutical Company Sandoz for experimental and psychotherapeutic purposes. The increasing use as a narcotic drug, especially by representatives of the hippie movement, was cited as one of the reasons for the prohibition of LSD and other psychedelics in the early 1970s.

Revolutionary approaches

For many years, there has been an increasing number of studies with volunteers to investigate the possible therapeutic effects of drugs, such as psilocybin or LSD. These studies are looking at the use of psilocybin and other hallucinogens to treat a range of otherwise untreatable mental disorders, such as chronic depression, post-traumatic stress disorder, and drug or alcohol addiction. Now, PsyBio Therapeutics aims to bring a unique drug to market. In cooperation with the University of Miami's Department of Psychology, the Canadians are working with other related active ingredients, investigating their interactions, and researching substances that work even better than pure psilocybin. This collaboration has already yielded several patents.

Global leader

According to PsyBio CEO Evan Levine, the Company is in pole position regarding research and patent prosecution in the industry. The Company also has a unique selling proposition, which should significantly impact margins in the future. The Company recently filed a process patent that can produce psilocybin using bacteria significantly cheaper, faster and more environmentally friendly than any other published method.

Earlier this week, PsyBio was able to announce another important step. It was able to start developing its second product candidate, a proprietary biosynthetic formulation of norbaeocystin, in collaboration with the Advanced Biofuels and Bioproducts Process Development Unit. Norbaeocystin is an analog of psilocybin and is not a controlled substance. The Company has begun Phase 1 of this process, including the technical transfer of analytical chemistry to identify capture methods for fermentation products as well as key feedstock and metabolites. PsyBio shares were listed on the Canadian Stock Exchange in late February and are also tradable in Frankfurt. The market capitalization is around CAD 40 million. A bet on the future.

You can read the full interview with PsyBio Therapeutics CEO Evan Levine here: Interview Evan Levine

Promising cooperation

The German biotech Company Evotec has announced the successful conclusion of a partnership. The Japanese pharmaceutical Company Takeda Pharmaceutical Company Limited may use Evotec's RNA platform to identify promising RNA sequences to target small molecule ligands that can be further developed into potential first-in-class therapeutics. In return, Evotec will collect research payments and can expect to receive early-stage, preclinical, clinical and commercial milestone payments of up to the equivalent of EUR 134 m per program. In addition, Evotec is entitled to staggered royalties on the products' net sales resulting from this collaboration. Chart-wise, the stock is facing a decision at the moment. A break of the EUR 30 support would generate a sell signal. We advise investors to wait and see.

Negative signs

The MorphoSys share has already broken the support. Since its high at the start of the year, the stock has corrected by just under 50% and was quoted at EUR 75 yesterday. The correction is likely to extend to the next target point at around EUR 70. We currently advise against an investment. Also, fundamentally, we do not see MorphoSys as a buy candidate at the moment. The weak outlook for the full year 2021 still causes uncertainty.