Thanks in large part to the global COVID-19 pandemic, 2020 has been a year of tremendous challenges and adversity.
But those historic challenges have also been met with impressive resiliency and innovation from individuals, corporations and the global science community.
Nowhere has this been more apparent than in the critical area of mental health.
What was already a significant – and rapidly-growing – global crisis has become even larger over the past 12 months.
This has sparked innovation from companies both large and small working to provide treatments for disorders such as anxiety, depression, obsessive compulsive disorder and post-traumatic stress disorder (PTSD).
One promising area of innovation is psychedelics, where an ever-increasing wave of research has emerged showing that psychedelics can offer effective treatments for mental health disorders that are often superior to traditional medicines.
These psychedelics – including psilocybin, the active compound in ‘magic mushrooms’ – are showing great promise and attracting the attention of scientists, up-and-coming biotech firms and investors alike.
In fact, some industry observers are suggesting that the psychedelics industry is currently at a similar stage as the legal marijuana industry in 2016...with increasing legalization, commercialization and expansion on the near-term horizon.
One under the radar company at the forefront of innovation in the area of mental health is Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF).
Lobe Sciences is a research & development based company that is currently developing unique medicines and devices to support wellness and improve mental health.
Thanks to their valuable intellectual property – including 5 provisional patents for psychedelics – and a number of other critical advantages, investors may have an opportunity to invest in an undervalued asset with significant upside potential...in a market that’s growing exponentially.
Here are 5 Reasons why you should keep Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) on your radar.
1. The Mental Health Market is Massive...and Generating Lots of Attention
The number of people affected by mental health disorders is staggering.
According to the World Health Organization (WHO), one in every four people around the world will be affected by a mental or neurological disorder at some point in their lives.
At this moment, around 450 million people suffer from mental health conditions and the impact of the COVID-19 pandemic is only beginning to be felt in this total.
Mental health disorders are on the rise in every country around the world and it is estimated that they will cost the global economy an astounding $16 trillion by 2030.
Currently most depressive disorders are being treated by prescription antidepressant drugs, a market that was valued at $13.7 billion in 2016 and is forecasted to grow to $15.9 billion by 2023.
But there appears to be a better solution than these traditional prescriptions to treat a wide range of mental health conditions.
Over the past five years, an increasing amount of academic research has emerged demonstrating the therapeutic potential for psychedelics to help treat issues such as depression, drug addiction, anxiety and more.
This has triggered such a wave of growth in the development of psychedelics that the market for psychedelic drugs is projected to grow at a compound annual growth rate of 16.3% over the next years to reach $6.85 billion by 2027.
Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF), through a stealthy acquisition strategy and cutting-edge scientific development, is building a growing portfolio of intellectual property to support wellness and improve mental health.
The company focuses on clinical development of medicines and related devices to treat specific indications and brain traumas. In particular, the company is targeting such areas as brain trauma and posttraumatic stress disorder (PTSD) associated with head trauma.
In 2020 they made a number of significant strides and has successfully executed on several key growth initiatives to position the company as formidable psychedelic medicine company at a time when psychedelics appear poised for significant growth in the burgeoning multi-trillion-dollar mental health market.
2. Lobe Sciences Ltd.’s Impressive – and Expanding – Intellectual Property Portfolio
One of the keys to evaluating any potentially undervalued biotech investment is understanding the strength of the company’s intellectual property.
In the case of Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF), the company continues to expand its impressive portfolio of provisional patents to position itself well for future growth.
In July 2020, they acquired Eleusian Biosciences Corp., and as part of the transaction they acquired a number of key intellectual properties.
Lobe Sciences Ltd.’s IP portfolio now includes 5 provisional patents – 3 for psychedelics based medicines and 2 for medical devices.
Among these provisional patents is one for therapeutics for the treatment for mild traumatic brain injuries with PTSD or PTSD alone, and devices including a nasal mist transducer used to deliver therapeutics.
Most recently, the company filed a provisional patent application involving a facial worn device combining virtual reality glasses for delivery of programmed virtual and augmented reality simulations. This allows for the administration to an individual of a psilocybin-derived agent and/or N-acetylcysteine in combination with Virtual Reality therapy.
With a growing portfolio of key intellectual property, Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) is working to master the development of transformational medicines and devices with a focus on treating mental health disorders such as mild traumatic brain injuries and PTSD.
3. Lobe Sciences Ltd.’s Strategic Relationships Provide a Significant Advantage
The company’s acquisition of Eleusian Biosciences Corp. back in July 2020 also provided Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) with something that most up-and-coming companies in the psychedelics space simply do not have:
Access to world-class research capabilities and scientists in transformational medicines.
This comes in the form of Eleusian’s collaborative relationship with a multidisciplinary team of scientists and physicians at the prestigious Miller School of Medicine at the University of Miami.
The objective of this collaboration is to demonstrate the safety and efficacy of the combination of psilocybin and N-Acetylcysteine ("NAC") in treating mTBI with PTSD or stand-alone PTSD and other indications.
NAC has demonstrated efficacy in treating mTBI, particularly in reducing neuronal losses and reducing impaired cognitive and neurological symptoms after injury to the head.
This collaboration for critical brain wellness research provides the company access to a research powerhouse in the University of Miami, a school which has achieved international recognition for its breakthroughs and advanced knowledge in a number of medical breakthroughs.
4. Lobe Sciences Ltd. is Led By an Experienced Team of Expert Scientists
During the rapid growth in the legal cannabis space, many small cap companies were led by hastily assembled management teams filled with equity managers.
As investors look to the psychedelics space for growth potential similar to the cannabis markets, it’s important to examine each potential investment carefully...and in particular you should scrutinize the qualifications of the management team.
Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) is run by a small, focused team of scientists, engineers and operators with significant expertise in their fields.
Collectively this team is committed to the investigation and development of treatments using alternative and non-traditional mechanisms for better health...and the qualifications they bring to the table are outstanding.
- CEO & Director Tom Baird is a seasoned CEO who has led a number of small and medium sized businesses. He has also led engineering design, strategy and corporate development and product management organizations for both publicly traded and private companies such as TRW Inc., which was acquired for $7.8 billion by Northrup Grumman ($52 billion market cap), Reynolds and Reynolds and Mitchell International.
- Chief Science Officer Maghsoud Dariani is also President and CEO of Semorex Inc., a privately held company focused on the discovery and development of novel therapeutics for cancer. Previously, Mr. Dariani was president of Focus Pharmaceuticals, Inc., where he managed the development and approval of drug products, achieving one FDA approval and bringing another to the clinical evaluation stage before negotiating the sale of the company.
- Science Advisor Dr. Mark A. Geyer Ph.D. is a Distinguished Professor of Psychiatry and Neurosciences Emeritus at the University of California San Diego (UCSD) and directs the Neuropsychopharmacology Unit of the VISN 22 Veterans Administration Mental Illness Research, Clinical, and Education Center. For four decades, his group has had continuous funding from the National Institute on Drug Abuse to study the behavioral effects of psychedelics and entactogens.
- Director Jonathan Gilbert was most recently the founder and CEO at Tassili LifeSciences, Corp., a biotech firm conducting research utilizing Psilocybin. Tassili was successfully acquired by a public company in March of 2020. He was also the founder and CEO of Scythian Biosciences, Inc. from December of 2014 through May of 2018. Scythian was a publicly traded research and development company in Canada focusing on the prevention and treatment of concussions and traumatic brain injury with its proprietary Cannabinoid combination, as well as strategic investments and partnerships across cultivation, distribution and retail of legal Cannabis.
5. Ongoing Cannabis Revenue Gives Lobe Sciences Investors a Unique Backstop
In addition to its focus on the psychedelics market, Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) has an ongoing “leftover” revenue stream from its previous focus on cannabis in the state of Washington.
Their tenant partner, Cowlitz County Cannabis Cultivation Inc. is projected to generate approximately US $20 million in gross sales revenues for the 2020 calendar year.
This potential ongoing revenue stream (the recognition of which is contingent on Lobe exercising its option) should provide Lobe Sciences Ltd. with a strong foundation to help support its research and development in the psychedelic space.
But it is especially valuable to the company because Lobe Sciences has an option to acquire 100% of this potential US $20 million asset for just USD $50,000.
The potential valuation of this piece of their business offers investors in Lobe Sciences Ltd.a unique scenario where they can invest in an undervalued, cutting-edge biotech company whose existing cannabis revenues provide “bonus” valuation moving forward.
Bottom Line
- Lobe Sciences Ltd. (CSE:LOBE; OTC:GTSIF) appears well positioned to succeed in the enormous – and rapidly-growing – mental health market.
- The company’s impressive portfolio of intellectual properties includes 5 provisional patents – 3 for psychedelics based medicines and 2 for medical devices.
- A unique collaboration with the prestigious Miller School of Medicine at the University of Miami gives the company something most up-and-coming biotech firms do not have: access to world-class research capabilities and scientists in transformational medicines.
- The company is led by a management team of scientists, engineers and operators with significant expertise in their fields.
- And the company’s ongoing cannabis revenues provide investors with a unique backstop to help support Lobe’s research and development efforts in the psychedelic space.
Other companies working to take advantage of rapidly-growing mental health and psychedelics markets include:
AEterna Zentaris Inc. (TSX:AEZS) is a major biopharmaceutical up and comer. The company has seen steady growth, and an array of new developments over the recent years. With a focus on oncology, endocrinology, and women's health solutions, AEterna has created a variety of new products, including Macrilen, the first and only FDA-approved oral test for the diagnosis of Adult Growth Hormone Deficiency.
Recently, AEterna received European approval to market Macrillen which has pushed its value even higher. Dr. Christian Strasburger, the Head of Clinical Endocrinology at Charité Unversitaetsmedizin Berlin and the principal investigator for macimorelin explained, “Clinical studies have demonstrated that macimorelin is safer and much simpler to administer than the current methods of testing for insulin-induced hypoglycemia, and is well-tolerated by patients and reliable in diagnosing the condition.”
Aptose Biosciences Inc. (TSX:APS) is a biotech company specializing in personalized therapies to address Canada’s unmet oncology needs. The company uses genetic and epigenetic profiles to gain insights into certain cancers and patient populations in order to develop new treatments within the space.
Aptose has an exclusive partnership with Ohm Oncology to develop, manufacture and commercialize APL-581 in order to treat hematologic malignancies and related molecules.
CRH Medical Corporation (TSX:CRH) specializes in products and services designed for the treatment of gastrointestinal diseases in the United States, Canada, and internationally. With a long history within the space, CRH has positioned itself as a leader in the field, trusted by medical professionals all over the world.
CRH also made a majpr acquisition at the beginning of the year, buying out Anesthesia Care Associates, LLC, an Indiana-based gastroenterology anesthesia practice. The estimated $2.6 million deal will increase CRH’s footprint in the space, and has been well received by investors.
Burcon NutraScience Corporation (TSX:BU) is a Canadian tech firm bridging the gap between food and health, a connection that should not be overlooked. It is known for its high-purity, sustainable, flavorful, and affordable products. The company has checked every box in the modern customer’s book. Founded over 20 years ago, Burcon has been at the forefront of the since 1998, and it’s only become more refined since.
In its mission statement, Burcon explains that it “seeks to improve the health and wellness of global consumers through the discovery and development of sustainable, functional and renewable plant-based products for the global food and beverage industries.”
Else Nutrition Holdings Inc. (CSE:BABY) is a company that proves mental and physical health shouldn’t begin as an adult. Else Nutrition has taken a different approach than many of its competitors, targeting a particularly young market – babies.
Their products aim to deliver al of the same benefits as typical baby food, but with an organic twist. In fact, 92% of their products are made from three core healthy ingredients, almonds, tapioca, and buckwheat. And the best part, is they never alter the plants’ chemistry or remove any of the micronutrients, they just alter the texture. As the science connecting physical and mental health becomes more clear, it’s more important than ever to start taking care of yourself as early as possible, something Else has recognized in a big way.
By. Peter Matthews
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