Lesser-known life science and biotechnology firm Psyence Biomedical (NASDAQ:PBM) skyrocketed on Friday following a potentially pivotal development. Australian regulators gave the green light for the company to conduct a Phase 2B study for its psychedelics-based treatment. As a result, PBM stock shot up 140% before paring back some of the gains.
According to the Toronto, Canada-based biotech’s press release, Psyence received full approval from the Australian Health Research Ethics Committee (HREC) to initiate its planned Phase 2B study in Melbourne, Australia. “The study will examine the use of nature-derived psilocybin as a treatment for Adjustment Disorder due to a recent cancer diagnosis in the palliative care context,” the company noted.
Per the release, an estimated 56.8 million people worldwide require palliative care annually. A substantial number of these patients exhibit a high level of psychosocial distress following their diagnosis.
With adjustment disorder representing a serious condition impacting around 19% of patients with life-limiting diagnoses, a great demand exists for delivering a solution.
PBM Stock Rises on Enhanced Credibility for Psychedelics
Moving forward, under the Phase 2B study, Psyence researchers will conduct a double-blind, placebo-controlled test focusing on three doses of nature-derived psilocybin in 84 patients in conjunction with psychotherapy. The primary endpoint is change in HAM-A (Hamilton Anxiety Rating Scale), a widely used tool to measure anxiety severity over time.
“Developing therapies such as psilocybin assisted psychotherapy, which may reduce patients’ stress and anxiety and result in better quality of life as they navigate a cancer diagnosis, can be very impactful,” stated Psyence CEO Dr. Neil Maresky.
That’s because, according to the doctor, current solutions for adjustment disorder in palliative care have a low rate of success in addressing all symptoms.
Moreover, PBM stock likely skyrocketed due to the enhanced credibility for psychedelics as a therapeutic approach. These treatments often suffer due to the controversy tied to the psychedelics themselves. In addition, technical concerns regarding viability exist. At the same time, as more studies are being conducted, the potential of psychedelics as a therapeutic solution rises.
Why It Matters
Currently, no analyst covers PBM stock. That may change as over the past five sessions, shares have gained about 290%. Nevertheless, it’s been a wild ride since the company made its public market debut earlier this year. Since its first public trading session, PBM sits just below parity.
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On the date of publication, Josh Enomoto did not have (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.
