- CYBN continues to demonstrate good progress with its preclinical activities on its novel drug programs, report observed
- Stifel also notes selecting indications with large patient pools, an understated market size, and potential for multiple synergies across development and distribution
- Report incorporates both CYB001 and CYB004 into valuation
As Cybin (NEO: CYBN) (OTCQB: CLXPF), a biotechnology company focused on progressing psychedelic therapeutics, continues to develop its multimolecule strategy, people are paying attention. A recent Stifel report raised Cybin’s price target by C$12, up from C$4 to C$15, and maintained the company’s speculative buy rating (https://ibn.fm/HLcxX).
“CYBN continues to demonstrate good progress with its preclinical activities on its novel drug programs, including CYB004, with the announcement of two chosen indications, Social Anxiety Disorder (‘SAD’) and Generalized Anxiety Disorder (‘GAD’), some of the most common mental illnesses in the U.S,” the investment firm reported in its release. “We note CYB004 is a 2nd generation deuterated psychedelic molecule, offering strong potential for IP protection and a long period of outsized returns, in our view.
“Currently, management expects CYB004 to enter Phase 1 clinical trials H1/22 with further research likely needed before determining whether to combine SAD and GAD into one clinical trial at the outset or to separate the two early on,” the report continued. “We now include CYB004 in our valuation for the first time, raising our target from $11 to $15, and reiterate our SPEC BUY rating given the large disconnect with the market, offering an attractive entry point.”
As key points for its decision, Stifel pointed to the company selecting indications with large patient pools, a potentially understated market size, and the potential for multiple synergies across development and distribution. “CYBN has selected Social Anxiety Disorder (‘SAD’) and Generalized Anxiety Disorder (‘GAD’) as the initial target indications for its novel and proprietary psychedelic molecule CYB004,” the report stated. “SAD and GAD affect 3–7% of the U.S. population, putting both indications in line with the prevalence of Major Depressive Disorder, in our view, and representing a large potential patient pool.”
Stifel pointed out that the global pandemic potentially increased these numbers, “with management indicating a 3-fold increase and the CDC suggesting symptoms of an anxiety or depressive disorder increased from 36.4% to 41.5% during the Aug. 2020–Feb. 2021 period (already in the height of the pandemic) with the percentage of those reporting an unmet mental health care need increased from 9.2% to 11.7%.”
As for market size, the report noted that “whilemanagement indicated a potential global market size of ~US$4b for both indications combined, we believe the opportunity could be markedly higher. We note these estimates are based on the patient population seeking treatment with first-line therapy utilizing SSRI/SNRI antidepressants. However, we believe a majority of the patient population either does not seek treatment or does not receive appropriate treatment. . . . Hence, should CYB004 prove to be a more effective alternative with less side effects, its addressable market size could be larger than what we see currently.”
Finally, Stifel also observed thatpatients dealing with anxiety commonly also have psychiatric co-morbidities with up to 80% of GAD patients also suffering from another mood disorder during their lifetime. “More specifically, we believe there could be a 50–60% probability that patients suffering from an anxiety disorder also have Major Depressive Disorder (‘MDD’). This could be a reason why antidepressants became a first-line treatment. Given CYBN’s primary drug candidate (‘CYB001’) focuses on MDD, we believe there are considerable drug development synergies where both clinical trials could share information, distribution/marketing channels, and have an overall higher chance of success,” the report stated.
“We are incorporating CYB004 into our valuation for the first time through a 10-year, 2-stage DCF analysis with main assumptions including: successful launch FY28, pricing in-line with CYB001 & Spravato at ~$53k, addressing only the most severe anxiety cases, terminal growth of 2% and discount rate of 25%,” the report concluded. “As a result, our target increases from $11 to $15. SPEC BUY.”
Cybin Corp., a leading biotech company focused on progressing psychedelic therapeutics, is on a mission to revolutionize mental health care. The company is focused on progressing psychedelic therapeutics by utilizing proprietary drug-discovery platforms, innovative drug-delivery systems, novel formulation approaches and treatment regimens for psychiatric disorders.
For more information, visit the company’s website at www.Cybin.com.
NOTE TO INVESTORS: The latest news and updates relating to CYBN are available in the company’s newsroom at https://ibn.fm/CYBN
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