Finding the next Tesla means finding the next hotshot player in an existing industry with a new twist, or in a brand new industry that stands to emerge out of the dramatic ashes of a global pandemic.
For the EV sector itself, it means a potential rival to Tesla that might do the unthinkable: Make EVs feasible for the masses at a time when the coronavirus has injected a sense of urgency in the climate change debate.
For pharma, it’s about finding the biggest potential in the race for a vaccine, and a sudden impetus to speed up a litany of medical solutions for a range of diseases that have plagued us forever.
And then, there’s a new industry that has investors scrambling to find somewhere to park their money because it’s as tricky as it is potentially lucrative: Psychedelics 2.0, where magic mushrooms and LSD are reinvented and reformulated as a solution to our most crippling mental health problems.
The two guys who built one of Canada’s leading cannabis companies are now building what could end up being a leading psychedelics healthcare company, taking biotech and nature’s medical offerings to an entirely new level.
The trick to finding the next Tesla is finding the one that has legs beyond the hype.
Here are our top 3 picks:
#1 CureVac (NASDAQ:CVAC)
A coronavirus vaccine would be a market disruptor in multiple ways, and the psychological effects alone will boost stocks that have nothing to do with the medical industry. Over the past few months, even tech stocks have strengthened on the slightest hint of progress towards a vaccine. Why? Because it suggests light at the end of the tunnel for economic recovery--across the board.
For the biotech companies involved in the race, massive profits are at stake, but while the biggest players will gain (think Pfizer, Moderna, etc), and the small-caps are higher risk but potentially wildly lucrative, our pic is a slightly safer mid-cap such as CureVac, which lowers the risk but still leaves the door open for major gains for investors in the event of a vaccine.
CureVac is unique because it’s developing a “messenger RNA vaccine” and its candidate (CVnCoV) is in Phase 1 clinical trials right now, with experimental vaccine Phases 2 and 3 hoping to launch before the end of this year.
The German biotech company hopes to use its “unique messenger RNA technology” to “mimic nature and give our body the information on how to fight against the virus”.
CureVac isn’t a small company, with a $10-billion market cap that is largely born out of recent investor confidence in this German-based outfit’s ability to get to a vaccine fairly quickly. It only went public in August.
To that end, investors have even more reason to be confident today than they did last week: The stakes have just been raised for competitors because CureVac just received a $300-million government grant to speed up its research and scale things up.
The trick with this one is that it’s not just about getting to the finish line first. Chances are that others (Moderna and German Biontech) could get to the market first, but CureVac is different and has potentially farther-reaching applications, including in other vaccines, cancer therapies, antibody therapies and rare diseases. Even if they don’t win the actual race, CureVac is hoping to win the award for the best vaccine solution.
And the German government is already said to be in advanced talks with CureVac to secure up to 225 million doses of its coronavirus vaccine, with an option for another 180 million.
Analysts estimate up to 8 billion euros of revenue within two years even if CureVac only charges 20 euros per dose.
#2 HAVN Life Sciences (CSE:HAVN)
These aren’t your mother’s psychedelics, and this isn’t just a company that wants to sell you mushrooms. These are pioneers who have two paths to the natural health products market, and they’re involved in high-level academic research on what is shaping up to be the next major trend in the healthcare industry.
These are psychedelics that have are being reinvented as Mother Nature intended--as safe and effective medicinal therapy for a range of mental health issues that have by now become the bane of our existence.
And America’s addiction to opioids has gotten so far out of control that a safe psychedelic solution could end up being fast-tracked through multiple legal channels.
The timing couldn’t be more urgent: We are in the throes of a pandemic that has caused an explosive increase in the number of U.S. adults struggling with mental health issues from 32% in March to 53% in July and climbing.
This space has been heating up for some time, but the pandemic catalyst has just thrust it into overdrive.
The space was shocked into a fast-paced reality this week when UK-based Compass Pathways, a mental health company known for its psychedelic treatments and backed by PayPal, filed for an IPO and plans to list on the NASDAQ under the “CMPS” ticker.
But while Pathways is already getting overexposure, another rising star in this emerging wildcat space is HAVN Life Sciences, which just listed on the CSE.
HAVN is what happens when two major names in the cannabis industry get together to take Mother Nature’s bounty of healthcare solutions and turn it into a player in the next major wellness trend.
As scientists work tirelessly to reinvent psychedelic drugs as solutions for “a range of emotional problems” from rampant depression, addiction, PTSD, obsessive-compulsive disorder, and anxiety, Vic Neufeld and Gary Leong, both founders of Canadian cannabis darling Aphria (NYSE:APHA), are helping to pioneer the new industry.
The already famous names behind Aphria--one of Canada’s leading cannabis companies--have now developed a global community in support of “microdosing” therapy research, extraction, formulation and delivery to the market. And their work with veterans and the military, especially in the area of PTSD, is garnering them a lot of congratulatory attention.
Enough so that these pioneers plan to become the standard in a new industry that definitely ranks among the top of those that could end up producing the next Tesla-like success.
Neufeld is the former CEO of Aphria and the former CEO of Jamieson Wellness (TSX:JWEL), which he built into a leader in vitamins and botanical medicines during his 21 years at the helm.
And now, HAVN (CSE:HAVN) has brought on Gary Leong, a highly sought after chemist who was the former Chief Scientific Officer at Aphria and another 14-year veteran of Jamieson Wellness. Leong has also served as an advisor to several Canadian government regulatory committees.
Now, coming off the success at both Aphria and Jamieson, they’ve mapped out a clear path to success for HAVN.
And it’s all going down in HAVN’s state-of-the-art mycology lab at The University of British Columbia, where it has the ability to expand into a pilot plant for extraction. In other words, they’ll be able to both formulate and manufacture psychedelics in one location.
But the billion-dollar element is this: HAVN expects to secure its first Health Canada license by the end of this year. That means they’ll be able to start researching and developing psychedelic compound formulations right away. The next step: licensed dealer status, which is scheduled to be secured by 2021, allowing the supply and sale of regulated psychedelic compounds.
This would catapult HAVN into one of the biggest emerging trends in the healthcare industry in two ways: As an active lab providing academic institutions with psychedelic compound extractions, and as a manufacturer and dealer that is ahead of everyone because it will have licenses and permits in an industry where the rest are playing catch-up.
In a world where mental health issues have taken front and center and investors are suddenly dying to pile money into anyone who can crack this magic mushroom nut in a way that is safe and effective, HAVN Life has the clear pioneering head start.
#3 NIO (NYSE:NIO)
Tesla (NASDAQ:TSLA) is now the most valuable carmaker “of all time”. And with combined market caps of some $70 billion, Uber and Lyft are also severely disrupting the giant auto industry. Tesla is worth almost $345 billion while the top three American automakers--GM, Ford and Chrysler--are worth around $70 billion.
But while Tesla’s EV threat to the industry is clear, it’s also sparked a rush in other electric vehicle manufacturers. And one, in particular, has had a breakout year:
NIO is China’s answer to Tesla, and it’s a direct one. It helps that the company now is fully cashed up thanks to a $1-billion bailout by provincial Chinese authorities. And now it’s armed with solid Q2 earnings and has since raised another $1.7 billion on the market. Over the past month, this stock has gained some 30%. Over the year, it’s up 240%.
And now NIO is preparing to venture into other markets, with Europe first on its list in another direct challenge to Tesla. Now, NIO’s got another model on the way, and it’s early-year balance sheet problems appear to have been resolved.
And China has the advantage of a government keen on seeing its EV industry overtake the rivals. China is already the biggest car market in the world, and Beijing is set on becoming the dominant force for EVs, with new COVID-era policies designed to boost their chances.
Johnson & Johnson (NYSE:JNJ),
Ketamine, a powerful anesthetic drug, and tranquilizer, has in clinical trials shown immense benefits as a treatment for depression and anxiety in tiny micro-doses. And after years of resistance, the FDA is now approved on a limited basis the first-ever legal Ketamine drug—a nasal spray called Spravato used in treatment-resistant depression.
Spravato, developed by pharmaceutical giant Johnson & Johnson (NYSE:JNJ), has received widespread praise in the medical community. Not only is the medication the first of its kind, it has also had overwhelmingly positive benefits to the patients utilizing the drug. The drug showed improvement in depression symptoms for periods of time as long as four weeks.
Though patients are not able to use the medicine without direct supervision from a healthcare provider due to the side-effects, the procedure so much has proven to be safe and sustainable in the long run.
Selective serotonin reuptake inhibitors (SSRIs) are the most commonly prescribed antidepressants. They include the Zoloft brand from Pfizer (NYSE:PFE). Zoloft is one of the world’s most recognizable antidepressants. The drug works by preventing the movement of serotonin back into nerve endings, essentially making the chemical more available for the body to use. This is important because low levels of serotonin have been linked to depression, anxiety, and even obsessive-compulsive behavior.
Pfizer’s Zoloft set itself apart of the many other brands of SSRIs thanks to its tolerability. In many studies, Zoloft has proven itself a drug with minimal negative side-effects, making it one of the first medicines doctors try for many people suffering from depression.
The Green Organic Dutchman (TSX: TGOD)
The Green Organic Dutchman is primarily a research and development company focusing on cannabinoid-based products. Most of its products are dried organic cannabis, oils, and edibles, but it also is involved in breeding plants to create new strains and distributing seeds for medical applications.
Recently, the Canada-based Dutchman announced a pivotal distribution partnership with HelloMD, a leading online medicinal cannabis company. The Dutchman will begin selling its premium organic product to HelloMD in late January for online distribution.
Andrew Pollock, Vice President of Marketing at the Dutchman, explained, “Patients deserve premium organic cannabis and through the partnership with HelloMD, we are pleased to provide increased access to TGOD’s product lines with the highest level of customer service and functionality to our patients.”
Aurora Cannabis (TSX:ACB)
Aurora Cannabis is one of the biggest names in the burgeoning marijuana sector. With a market cap over $14 billion, Aurora has carved out its position as a leader in the industry. And the company is still making moves.
Recently, Aurora sealed a supply deal with Mexico’s Farmacias Magistrales SA, the country’s first and, for now, at least, only federally licensed importer of raw materials containing THC.
In an announcement from Aurora, the company stated that the deal “firmly establishes Aurora’s first-mover advantage in one of the world’s most populous countries, where more than 130 million people will have federally legal access to a range of Aurora’s non-flower medical cannabis products containing THC.”
Cronos Group (TSX: CRON)
Following its October slump, Cronos Group has seen a surge in trading volume, with a renewed investor interest in the company thanks to rumors surrounding the company’s discussions with tobacco giant Altria.
The Canadian firm, though primarily an equity investor, has made some major moves in recent years, wheeling and dealing with some of the hottest names in the sector. Because of its forward-thinking attitude, it has drawn the attention of many major mainstream players, including the company behind Marlboro, Altria Group.
On December 7th, rumors were finally confirmed when Cronos made the official announcement of a C$2.4 billion strategic investment from Altria. "Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth," said Cronos Group's Mike Gorenstein, Chairman, President and Chief Executive Officer.
Emblem Corp. (TSX.V: EMC)
Emblem is a leading licensed marijuana producer in Canada. With a number of cannabis-based products, Emblem works closely with the medical community to ensure both patients and physicians have the information necessary to make decisions regarding treatments involving marijuana.
Recently, Emblem completed testing on a new oral extended release product with partner Canntab Therapeutics. With the successful tests, the companies announced that they will be moving forward into clinical trials.
In addition to its advancements in the medical field, Emblem is also working towards a safer community, partnering with DriveABLE in an effort to curb accidents from impaired drivers. Nick Dean, CEO, Emblem Corp. explained, “Impairment – whether from alcohol, cannabis, fatigue, underlying medical conditions, or narcotics – is a serious issue that affects safety on roads and in the workplace.”
THC Biomed International (TSX:THC)
THC Biomed operates as a licensed producer under Canada's Marihuana for Medical Purposes Regulations. It is also engaged in the research & development of the products and services to medical marijuana.
THC Biomed's recently announced a new THC-based beverage, aiming to appeal to a broader range of consumers. John Miller CEO explained, "THC has conducted extensive research on cannabis edibles and beverages and I have found our product to be exclusive in its category."
Though THC Biomed may be smaller than some of its more well-known competitors, it is just as ambitious. And it’s beginning to pay off. Earlier this month, the company made its first shipment of cannabis products to its Saskatchewan partner, and is rapidly expanding its holdings, with two new strata lot purchases, adding to its growing array of assets.
By. Neil Rogers
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
FORWARD-LOOKING STATEMENT. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include: that governments will legalize and regulate psychedelic medicine; that HAVN Life Sciences Inc. (“HAVN”) can have necessary licenses by 2021 to sell psychelic therapy; that HAVN can create and market depression and anxiety treatments; and that HAVN’s business will be profitable. Forward-looking information is based on the opinions and estimates of HAVN at the date the information is made, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Psychedelic medicine may not be legalized on the timeline as expected or at all; psychedelic medicine may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; that HAVN may not be as able to produce effective treatments or scale up as thought because of potential lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees, partners or suppliers; none of HAVN’s treatments have passed clinical trials or received FDA or other health authorities’ approval; HAVN may not be able to raise funds and develop better treatments than competitors in the psychedelic medicine industry; actual operating performance of the facilities HAVN may not meet expectations; competition may quickly develops that HAVN may not be able to retain key employees, partners and suppliers; costs may be higher than expected and profits therefore lower; and other risks affecting the Company in particular and the psychedelic medicine industry generally, including without limitation risks related to most agricultural crops, including crop failure; and medical developments, including without limitation failure of human trials or rejection by medical regulators. The forward-looking statements in this document are made as of the date hereof and the Company disclaims any intent or obligation to update such forward-looking statements except as required by applicable securities laws.
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