When drug developers go after the same disease, clinical trial results often have a see-saw effect on the stock market. Investors inevitably view one company’s data as stronger than its rivals, and share prices move accordingly. This has happened seemingly countless times in research areas like cancer, obesity, rare disorders and immune system conditions.
One notable exeption, however, is psychedelics. After the leading company in the space, U.K.-based Compass Pathways, reported positive findings in mid-February from two large studies evaluating its synthetic version of psilocybin — the mind-altering compound found in certain mushroom species — shares of at least four psychedelics developers rose by mid-single digits to low-double digits.
One of those developers, Definium Therapeutics, this week unveiled data from its own late-stage trial, in which a formulation of LSD significantly outperformed a placebo at relieving symptoms of major depression. The drug’s impact was so profound that analysts described it a “best-case” scenario for Definium, shares of which jumped around 50% on Monday to trade a bit under $37 apiece.
Marc Goodman, of Leerink Partners, raised his peak sales estimate for the drug to between $1.5 billion to $2 billion. “So overall it’s a very good day” for Definium, he wrote in a note to clients.
