On Wednesday, HC WainWright began coverage of Field Trip Health FTRP, a company in the psychedelics space, which is developing a chain of psychedelics-assisted therapy clinics throughout North America and Europe.
The firm gave Field Trip a Buy rating and a $20 price target, pushing the company’s shares from $4.5 on Tuesday at market close to $5.3 on Wednesday morning. The bump was enough to keep share price at a new base, leveling at $5 on Thursday at market close.
With this prediction, Field Trip shares could be worth four times its price in just one year, further cementing the institutional backing of the psychedelics sector.
Clinics aside, the company is also an advanced player in psychedelic drug development, with FT-104, a proprietary psilocybin analog that could provide improved therapeutic potential to naturally-occurring psilocybin.
“We find Field Trip's valuation compelling ahead of the anticipated Phase 1 top-line data on FT-104 and a potential broad Phase 2 program in multiple indications in 2022,” wrote HC WainWright analysts.
The firm said FT-104 could soon have among the most robust intellectual property protection in the space and added that the company’s mental healthcare strategy has the potential to hit two birds with one stone by building an infrastructure of clinics that also gather clinical data.
“With clinics generally achieving profitability within 15-18 months and with multiple potential psychedelic compound approvals anticipated from 2023 and beyond, a leading operator of clinics such as Field Trip could have a steady and growing cash flow from operations, with healthy margins.”
Though very optimistic, the analysts mentioned that the company’s strategy still deals with substantial risk. Some factors include clinical development risk tied to FT-104 and future psychedelic drug candidates, competitor risk in relevant therapeutic areas, government regulatory risk as well as risk associated with commercialization, reimbursement, pricing and business development.
Photo: Field Trip's Los Angeles Clinic. Courtesy Image.
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