Cybin (NYSE: CYBN) stock is up 40%. CYBN stock, well, we might think it has gone up because psychedelics seem to be having their moment in the Sun. Approvals for their use in the treatment of certain mental health conditions for example. And this is sort of true, but not wholly. For the actual trigger here has been a hedge fund buying in in volume. They might well have done so on the back of the change in attitude toward psychedelics of course, probably did. But as we say, it’s the buying, not the change in circumstances, driving the stock price here.
Cybin’s business: “Cybin Inc., a clinical-stage biopharmaceutical company, focuses on developing psychedelic-based therapeutics. The company’s development pipeline includes CYB003, a deuterated psilocybin analog, which is in Phase 1/2a clinical trial to treat major depressive and alcohol use disorders; CYB004, a deuterated dimethyltryptamine, which is in Phase 1 clinical trial for treating generalized anxiety disorders; and CYB005, a phenethylamine derivative, which in preclinical stage to treat neuroinflammation.”
We can then add changes in attitude toward the use of psychedelics: “As a result, MAPS said its subsidiary, MAPS Public Benefit Corporation, would likely file an NDA for the candidate by the end of the year. That sets the stage for a potential US FDA approval in 2024. Were that to occur, the MDMA candidate could become the first true psychedelic drug to win FDA approval. The last therapy with a psychedelic component approved by the agency came in 2019 with Johnson & Johnson's (JNJ) Spravato (esketamine), a derivative of the dissociative hallucinogen ketamine, for treatment-resistant depression.”
So this little part of the world is changing. We then add in what looks like a fortuitous deal: “Cybin Inc. (NYSE American:CYBN) (NEO:CYBN), a clinical-stage biopharmaceutical company developing new and innovative psychedelic-based treatment options, acquired Small Pharma Inc. (TSXV:DMT) (OTCQB:DMTTF), a U.K.-based biotechnology company focused on short-duration psychedelic therapies for mental health conditions.” That was announced a few weeks back - good timing of course.
Cybin stock price from Google Finance
But that’s background, the real driver of the CYBN stock price is this: “Cybin Inc. (NYSE-A:CYBN, NEO:CYBN) shares have skyrocketed on the news that billionaire investor Steve Cohen’s hedge fund Point72 Asset Management purchased almost 19 million shares in the biotechnology company which is developing psychedelics-based therapies for major depressive disorder and anxiety.”
Now it’s not true that every hedge fund investment comes off. We should not just assume that because Cohen is buying in that the stock will both rise and stay risen. But it’s still a fairly good bet.
It’s entirely true that Cybin looks like being in the right place at the right time. But the driver of the stock price rise is the buying that’s already happening.
