Water Tower Hour Recap
Cody Shandraw, President of Healing Realty Trust and seasoned investor in unconventional opportunities, joined us on the Water Tower Hour podcast to give his perspectives on the investing landscape in the psychedelics sector. Those interested can listen to the episode on Apple Podcasts, Spotify, or on our website. Accessible links in our full report. Thoughts on the disconnect between industry tailwinds and publicly traded psychedelics stocks. After the initial startup phase and ‘crazy’ growth in 1920/21, followed by the shakeout stage in 1922/23, Shandraw believes that the market is now in that maturation stage of the cycle when the real winners will start to emerge, whether it’s from a drug development success standpoint, and/or the IP portfolios they own and the management teams that lead them. He asserts that a lot of companies went public much too early and had they stayed private longer, they would have been in a much better position today to raise capital. Private equity is doing much better. While publicly traded psychedelics stocks have been typically down 80-90% over the past two years, Shandraw says that investments in private psychedelics companies are flourishing. He highlights the recently announced AbbVie/Gilgamesh collaboration agreement worth up to $1.95 billion to Gilgamesh, which chose not to go public after it raised early-stage money in 2020/21 as an example. Infrastructure bottlenecks need to be addressed. With psychedelics-based therapies close to commercialization, Shandraw’s main concern is that the clinical landscape falls well short of what is needed. He ‘generously’ estimates that only 5% of the ~2,600 ketamine clinics in the US can accommodate the longer duration sessions of MDMA-AT. Shandraw sees Healing Realty Trust (HRT), which was formed to grow a clinic-focused real estate portfolio as part of the solution to address the lack of infrastructure and uses proprietary data (via an exclusive arrangement with HealingMaps), as a way to identify the best regional opportunities for expansion. For full disclosure, Shandraw is Chairman of the Board of HealingMaps. M&A landscape in psychedelics. Shandraw explains why he expects to see additional acquisitions of public companies over the next 12 months from larger (pharma) players entering the space. Final thoughts. Shandraw shares his thoughts on how to play the psychedelics growth story going forward and why the cannabis sector may be a good guide.
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