Capital 10X Growth Navigator – January 18th 2022

Commodities

Energy & Mining

Commodity cyclicals are off to a very strong start to begin the year.  Energy has been the strongest performing category, with natural gas up 15% year-to-date and oil up 13%.

The strong start for the commodities has translated to strong returns for the commodity producers. Oil & Gas exploration and production stocks are up 16% year-to-date, while copper mining stocks are up 8%.

In our December report “Copper Miners on Discount” we highlighted that base metal mining stocks are cheap relative to history on a valuation basis (EV/EBITDA).

Within the sector small cap copper miners offer the best value; Sierra Metals (NYSE:SMTS, TSX:SMT) and Hudbay Minerals (TSX:HBM) are two copper miners that screen deep value relative to their small/mid cap copper peers.

Psychedelics

Mindset Pharma’s Groundbreaking Psychedelics Endorsement from Big Pharma

Japanese based Otsuka Pharmaceuticals, one of the worlds largest pharmaceutical companies ($20B market cap, $13B sales), announced earlier this month a groundbreaking partnership and strategic investment in Mindset Pharma (CSE:MSET).  This is a very significant deal for the industry as it marks the first endorsement from big pharma on 2nd generation psychedelic drug development.

The McQuade Center for Strategic Research an Development, LLC (MSRD), a member of the global Otsuka family of pharmaceutical companies, and Mindset  announced a collaboration that will support the development of psychedelic medicines.

We sat down with James Lanthier, CEO of Mindset Pharma to shed some colour on the deal; he speaks to the importance of the partnership to Mindset and the psychedelics industry; the non-dilutive financials terms and R&D sponsorship and also company catalysts for 2022.

Functional Mushrooms: The Sweet Spot of the Nutraceutical & Psychedelic Markets

Capital 10X published a report last week examining the functional mushroom market. It is one of the four main segments of the emerging psychedelic sector; along with drug development, intellectual property and treatment clinics.

Functional mushrooms are one of the fastest growing verticals within the nutraceuticals market, a market estimated to be valued at $8B today and is projected to reach $19B by 2030.

Within the psychedelic investment landscape, we believe that functional mushrooms are one of the most attractive cash flowing verticals.  Functional mushrooms sit in the investment sweet spot of psychedelics and nutraceuticals.

Established and emerging brands include: Om, Four Sigmatic, Spore, Host Defense and HAVN Life. HAVN Life Sciences (CSE:HAVN) is one of the best positioned within the category, having recently acquire one of the leading US functional mushroom brands in Spore Life Sciences, which compliments their own HAVN Life brand.

The Spore Life Sciences acquisition provides HAVN Life a U.S. consumer base of 110,000 customers, nearly 40,000 subscribers, and year-to-date revenues of nearly $8 million CAD (as of the end of November 2021), with recent sales at a run rate of more than $1 million USD per month.

Atai’s Ketamine Analog gets FDA Investigational New Drug Clearance

The FDA has given Investigational New Drug (IND) clearance to conduct a clinical study of Atai Life Sciences (NASDAQ:ATAI) ketamine analog PCN-101 (R-ketamine). Atai plans to initiate the study early this year through its platform company Perception Neuroscience.

Atai’s compound could offer a differentiated profile to currently available antidepressants and address key patient needs, including the potential of rapid action and anti-suicidal effect. In preclinical animal models of depressive behavior, R-ketamine was shown to offer longer durability and better tolerability.

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Sierra Metals is a market awareness client of Capital 10X.

HAVN Life is a market awareness client of Capital 10X.

Mindset Pharma is a market awareness client of Capital 10X.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

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