QUARTERLY IN DEPTH INVESTMENT ANALYSIS – CYBIN INC (NYSE: CYBN)
Disseminated on behalf of CYBN Inc (CYBN)
QUARTERLY IN DEPTH ANALYSIS
This communication is not an offer to buy or sell securities nor is it to be construed as personal investment advice. Nothing contained in this communication should be relied upon as a promise or representation as to future performance.
As I mentioned on Sunday, in lieu of our Weekly Picks Newsletter this week I am going to be presenting another new Small Stock Investment Thesis. My goal is to cover one company in detail every quarter that I feel has good investment potential when considering risk / reward.
Last quarter I covered a small cap electric vehicle (EV) growth name (Hypercharge Networks Corp – HCNWF) when it was still trading at $0.33 and for those that followed my thesis, saw it move to $4.50 (1000+% gain).
This quarter I am going to be covering a Biotech name that I feel, after extensive due diligence and interviewing members from the executive team (including the CEO, Doug Drysdale) is in a good position to gain additional market share and growth in the short and medium term.
I have spent a lot of time researching this space and the different avenues / possibilities this company has ahead of themselves and will be breaking down my thesis below based on my comprehensive due diligence, analysis of competitors in the space, favorable risk-reward potential and encouraging financial updates.
Cybin Inc (NYSE: CYBN; NEO: CYBN.NE)
- Idea: Long CYBN $0.25 – $0.30
- Target Area: $0.75 – $0.80+
- Risk: $0.15
- Time Frame: 2 – 6 Months
As of June 19th, 2023:
- Common Shares: 207,463,646
- Warrants: 23,230,485
- Options: 20,569,800
- Class B Common Shares: 5,305,421
- Total Outstanding: 266,872,462
- Insider Owned: 22.29%
- Current Market Cap: $69.75M
- Book Value: $0.30
- Cash Per Share: $0.09
- Burn Rate: $10M CAD / Quarter
Weekly 13ema key reclaim – IMO short term from a technical standpoint
Abstract: This thesis provides a comprehensive analysis supporting a long position on CYBN, a pharmaceutical company specializing in Mental Health Disorder Treatments. By conducting extensive due diligence and considering factors such as research studies, pipeline progress, financial updates, competitors, market potential and risk analysis, this thesis justifies the long position while highlighting the favorable risk-reward potential association with CYBN’s upcoming study results. Additionally, this thesis presents the information in a clear and effective manner to enhance overall understanding and decision making, covering what I look for when I make an investment.
Introduction: CYBN is positioned to revolutionize the Mental Health Treatment market with its innovative therapies targeting Major Depressive Disorder (MDD) and Alcohol Use Disorder (AUD). Through advanced research and development efforts, CYBN aims to address the symptoms and root causes of these conditions, filling a significant unmet need in the market. By capitalizing on the transformative potential of its treatment approaches, CYBN has become an attractive investment opportunity.
Research Studies: CYBN’s ongoing research studies have yielded promising results, particularly in addressing the symptoms and root causes of MDD. Unlike conventional treatments that focus solely on symptom management, CYBN’s therapies aim to provide holistic relief by addressing the underlying causes of these disorders. The potential extension of treatment options to AUD further expands the company’s market potential and enhances its competitive advantage.
Pipeline Progress: CYBN’s pipeline progress is marked by significant milestones. The imminent release of Phase 2 Data and subsequent discussions with the FDA regarding Phase 3 Trials represents a critical step towards regulatory approval and commercialization. There have been two non-profits in the same industry that have previously received FDA Breakthrough Therapy Status Approval for generic Psilocybin (and MDMA) so I would expect that given CYBN’s approach to make these drugs more scalable (and with better efficacy for patient outcomes), that there is a very high probability that they will also receive their FDA Breakthrough Status Approval – leading to potential market dominance.
Financial Updates: CYBN’s recent third-quarter financial information reveals promising insights. The company’s efficient financial management is demonstrated by its carefully controlled burn rate, ensuring sustainable operations and reducing the disk of dilution for existing shareholders. The ongoing ATM program provides CYBN with access to additional capital, enabling growth opportunities while enhancing working capital. These positive financial updates underscore CYBN’s stability for potential future success.
Competitors: While competition does exist in the Mental Health Treatment market, CYBN seems to hold a favorable position. The strategic acquisition of a study has accelerated CYBN’s progress by 18 months, propelling the company ahead of its competitors. Additionally, CYBN’s patent protection and shorter development timelines provide a significant competitive edge. The streamlined, cost effective administration of CYBN’s treatments, position the company as a potential market leader.
Market Potential: The market potential for CYBN’s treatment solutions is substantial. With depression affecting millions of people worldwide, the demand for effective and innovative therapies is high. CYBN’s approach to addressing the root causes of MDD (and its potential extension into AUD Treatment) positions the company the capture a significant market share. I feel there is a strong probability of market acceptance and there will be widespread adoption of CYBN’s therapies when compared to SSRI’s. Simply put – they are cheaper and faster to administer then competitors.
Risk Analysis: While investing in the stock market involves inherent risks, CYBN’s strong value proposition mitigates potential concerns around financing activities used to continue enrollment in current and future research studies. The positive results from past research studies, and the company’s robust pipeline progress, reduce the risk associated with clinical trial outcomes. Regulatory challenges are minimized through Breakthrough Therapy Status (if granted), accelerating market entry. Furthermore, I feel that there is a favorable risk-reward potential associated with CYBN’s upcoming study results that justifies the long position.
Essentially, risking $0.15 to make $0.45+
Looking at the recent movement from positive updates, we can see even larger moves in the past. The chart is currently coming off the lows and there have been a recent consolidation down here as we wait for Phase 2 study results (which are due to be released shortly).
In conclusion, based on comprehensive due diligence, CYBN presents a speculative long opportunity. This bullish case is supported by robust research studies, favorable pipeline progress, encouraging financial updates, advantageous competitive positioning, significant market potential and careful risk analysis.
Current Idea is a speculation long on CYBN (2 – 6 months).
Spartan (aka ‘Chris’)
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