Earlier this week, Eight Capital launched coverage on a basket of psychedelic companies. This comes after they produced an industry primer during the summer months. The second company on this list is Cybin Inc (NEO: CYBN), which they have given an C$8.15 12-month price target and buy rating.

Cybin currently has 6 analysts covering the stock with an average 12-month price target of C$9.53, or a 230% upside. Out of the 6 analysts, 2 have strong buy ratings and the other 4 have buy ratings. The street high comes in at $15 from Stifel-GMP while the lowest price target is C$7.

Eight Capital says that since Cybin went public late last year, the company has developed and further diversified its pipeline to have multiple assets towards clinical stages, commenting, “The Company looks poised to take its orally-delivered psilocybin formulation.” They also expect a number of catalysts going into the second half of this year and the first half of 2022.

The first point Eight Capital makes is that the company has done a good job at derisking itself as its working towards a commercial distribution of oral psilocybin, “that stands out as a differentiated route of delivery for this asset, which could translate to favourable safety and efficacy relative to other approaches.” They add that the readout from Compass Pathways on their Ph2b psilocybin pill formulation expected by year-end should give a good baseline as well as extra confidence in Cybin’s trial.

The next point from Eight Capital, is that the company has secured multiple solid partners, with their partnership with Catalent for use of its orally dissolving tablet. Additionally, they have partnership agreements with Covance and Kernal for different technology. The firm also has a strong balance sheet when compared to peers. The company has $99 million in pro-forma cash, which is expected to fund the companies trials through Eight Capital’s forecast period.

The last highlight made by Eight Capital is the potential for a collaboration with a large pharmaceutical company. They say that the 2019 FDA approval of Johnson and Johnson’s psychedelic-based treatment for relevant mental health conditions makes it clear that the “big pharma” has the go-ahead to touch these assets. Eight Capital writes, “we view an eventual take-out or partnership/collaboration opportunities with pharmaceutical giants as a natural progression of events.”

Below you can see the catalysts Eight Capital is watching for.


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