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Why Is Enveric Biosciences (ENVB) Stock Up 120% Today?


  • Shares of biotech specialist Enveric Biosciences (ENVB) are gaining triple digits on Thursday.
  • The company received a Notice of Allowance for a patent application for a key therapeutic.
  • ENVB stock is lighting up social media, although it more broadly remains a risky venture.
Biochemical/biotech research scientist team working with microscope
Source: Mongkolchon Akesin / Shutterstock.com

Enveric Biosciences (NASDAQ:ENVB) stock is enlivened amid an otherwise soft early afternoon session on Wall Street, delivering triple-digit percentage gains. Specializing in the development of novel small-molecule therapeutics for depression, anxiety and addiction disorders, Enveric just received positive regulatory news. Still, while ENVB stock looks like a massive winner across social media, the stock remains a speculative venture overall.

According to the company’s press release, Enveric received a Notice of Allowance from the U.S. Patent and Trademark Office (USPTO) regarding its patent application for EB-373. As a “new chemical entity (NCE) psilocin prodrug,” EB-373 aims to treat anxiety disorder.

Specifically, the upcoming patent is called “C4-Carbonothioate-Substituted Tryptamine Derivatives and Methods of Using.” Per the release:

“The soon-to-issue patent […] contains composition of matter claims for a family of novel prodrug derivatives of psilocin, including EB-373, Enveric’s lead product candidate. The USPTO issues a Notice of Allowance after making the determination that a patent should be granted from an application.”

Naturally, the announcement is bolstering sentiment for ENVB stock. According to Enveric CEO and Director Joseph Tucker, compared to competing therapeutics, EB-373 may “potentially elicit a more rapid onset of action, more controlled therapeutic effect, and reduced gastrointestinal side-effects compared to conventional psilocin prodrugs, such as psilocybin.”

ENVB Stock Has Promise, But Shares Remain Speculative

Another factor contributing to the broader enthusiasm toward ENVB stock today centers on the underlying total addressable market. According to the Anxiety & Depression Association of America, anxiety disorders represent the most common mental illness in the States, affecting 40 million adults, or 19.1% of the population. Generalized anxiety disorder (GAD) specifically affects 6.8 million adults as well, yet only 43.2% receive treatment. With that data in mind, a clear opportunity exists for novel treatment solutions, in turn supporting ENVB.

Further, Enveric specializes in psilocin prodrugs, according to its website. Both psilocin and the aforementioned psilocybin are hallucinogens. However, ongoing research shows that such “magic mushrooms” can be effective at easing fear and anxiety. Therefore, the Notice of Allowance for Enveric symbolizes some significant momentum not only for ENVB stock but for the rest of the industry as well.

Of course, this company does remain a risky venture. While Enveric sports a cash-rich balance sheet, data from Gurufocus indicates that it hasn’t posted revenue since 2019. Additionally, though the underlying industry here offers a lot of promise, it also poses some significant risks. From the need to expand malpractice insurance coverage to broader legal vagaries, ENVB stock isn’t quite a slam dunk.

Why It Matters

For the year so far, ENVB stock has gained more than 45% as of this writing. However, in the trailing one-year period, shares have stumbled more than 60%, demonstrating the volatility behind Enveric’s trading patterns. With that in mind, investors will want to exercise extreme caution before jumping on the bandwagon today.

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Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/why-is-enveric-biosciences-envb-stock-up-120-today/.

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