Cybin FDA Milestone Amidst Financial Burn-rate

The TDR Three Takeaways:

1. FDA Approval for Phase 2a Study: Cybin has received FDA clearance to begin a Phase 2a study of CYB004, a molecule derived from deuterated dimethyltryptamine (DMT), for treating Generalized Anxiety Disorder (GAD). This marks a significant advancement in psychedelic therapy research.

2. Promising Therapeutic Potential: Preliminary studies of Cybin CYB004 have shown strong and rapid psychedelic effects at lower doses, indicating its potential as an effective treatment for GAD and possibly other anxiety disorders. This aligns with Cybin FDA approval goal of addressing unmet needs in mental health care.

3. Financial Considerations and Market Performance: Despite not generating revenue and experiencing a significant burn rate, Cybin’s share price has been relatively stable compared to its peers in the psychedelic sector. However, the company’s financial situation, including a recent equity dilution and ongoing capital needs, highlights the importance of continued strategic financial management to support its research and development efforts.

Cybin (NYSE American: CYBN, NEO: CYBN), a clinical-stage biopharmaceutical company, has today announced a notable milestone in psychedelic therapy research. This follows up to the news two weeks ago we reported here at TDR. Cybin has received clearance from the U.S. Food and Drug Administration (FDA) to initiate a Phase 2a study of CYB004. This proprietary molecule, derived from deuterated dimethyltryptamine (DMT), is targeted for the treatment of Generalized Anxiety Disorder (GAD). This decision follows encouraging results from two Phase 1 studies that demonstrated the safety, pharmacokinetics (PK), and pharmacodynamics (PD) of CYB004, which exhibited strong and rapid psychedelic effects at lower doses compared to unaltered DMT.

Scheduled to begin in the first quarter of 2024, the Phase 2a study marks a significant step forward in exploring innovative treatments for GAD. The study, designed as a randomized, double-blind, active-controlled trial, will assess CYB004’s preliminary clinical efficacy, safety, tolerability, PK, and PD in GAD patients. The trials will take place across multiple sites in the United States.

This progress is bolstered by extensive research and data from five completed clinical studies on DMT and its deuterated variants, including CYB004 and SPL028. These studies have provided valuable insights on dosing and preliminary efficacy in treating depression and anxiety. Notably, a completed Phase 2a study of SPL026 (IV DMT) suggested a reduction in anxiety symptoms in patients with major depressive disorder, highlighting the potential of deuterated DMT molecules like CYB004 in treating anxiety disorders.

Cybin’s focus on meeting the unmet needs in mental health care is particularly relevant given the widespread prevalence and impact of anxiety disorders. Anxiety disorders are the most common mental health conditions worldwide, significantly contributing to disability-adjusted life years (DALYs). GAD, a frequently observed anxiety disorder in primary care, has high prevalence rates. Despite this, existing treatments for anxiety disorders often have limited effectiveness, underlining the urgent need for better therapeutic options.

Cybin aims to not only introduce CYB004 as an effective treatment for GAD but also to improve the quality of life for those affected by this condition. By harnessing the unique properties of CYB004, such as its rapid onset of effects at lower doses, Cybin seeks to provide more patient-friendly and convenient treatment options.

Regarding Cybin’s financial situation, I have provided a summary of my independent analysis below. The company currently does not generate revenue, making its burn rate a critical factor. As of now, Cybin’s share price stands at $0.38, with cash on hand of $0.055 per share and a Net Current Asset Value (NCAV) per share break-up value of $0.054. The company reported an EBITDA per share loss of $0.16 last year, indicating the need for additional capital. Last year, Cybin raised equity, which resulted in a 16% dilution of shareholder value. Despite these challenges, Cybin has performed relatively well compared to its peers in the psychedelic sector, with only a 7% decrease in its share price over the past 12 months. However, further equity dilution seems likely and necessary for the company to continue its developmental efforts and create shareholder value.

Cybin recent FDA approval for the Phase 2a study of CYB004 and its ongoing research in psychedelic therapy represent significant steps in addressing the pressing need for effective mental health treatments. While the company faces financial challenges, its relative market stability and continued research advancements suggest a potential for future growth and contribution to the field of mental health care.

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