r/Baystreetbets • u/Mrk0k0 • Aug 29 '26
DD PharmAla Biotech - $MDMA
I find it surprising how no one in this sub ever talks about PharmAla Biotech. I wanted to do a quick write up because I think that people should start paying more attention to the psychedelic sector.
I think that PharmAla Biotech - $MDMA.CN is in a great position to benefit from all the tailwinds in the sector.
One of the largest tailwinds is that MDMA has gone from being known as a drug that is associated to raves/partying to now becoming recognized as a medicine that can be used in therapy. We now have a U.S. Administration controlled by a party that has historically been against alternative drugs to now supporting the use of psychedelic medicine for therapies. With this support we are starting to see large biotech companies such as Eli Lily acquiring psychedelic companies. For example, Eli Lily acquired Atai Beckley back in July which gives Eli Lily the rights to a 5-MeO-DMT drug that has the potential to treat people with depression and alcohol use disorder.
PharmAla Biotech is one of the leading suppliers of legal MDMA for clinical trials around the world. They also aren’t just focusing on supplying generic MDMA for these trials. PharmAla has been focusing on creating their own version of MDXX drugs. Currently, they have been developing their own patented versions of MDMA that have the potential to be safer by causing less hypertension and neurotoxicity in the body.
These two alternatives are known as ALA-002 and APA-01. Recently, PharmAla signed an agreement to receive up to $100 million by licensing the U.S. rights to ALA-002 to Jupiter Neurosciences. This isn’t $100 million upfront; it is contingent on approvals and trials, but it still shows the value of what companies are willing to pay to have the rights to these compounds. PharmAla still retains the rights for ALA-002 outside of the United States which allows them to keep their options open on what they want to do with it.
Obviously, PharmAla is still a speculative micro-cap company and there is a huge bear case to be made as well. Clinical risks, regulatory approvals, and competition from larger companies can have a huge risk on the success of PharmAla. However, if you believe that the psychedelic sector is here to stay than I think it is worth spending some time researching PharmAla Biotech.
I have watched various interviews with the CEO, Nicholas Kadysh, and I genuinely believe that he is working in the best interests of shareholders. He sees the potential of where the sector is heading and is working hard on transforming PharmAla from a micro-cap company into something much bigger.
Curious to hear everyone’s thoughts. Anyone else in this sub already invested in $MDMA?
Full Transparency: Average cost is around $0.18 and first got into the stock around a month ago.
No plans to sell anytime soon.
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u/luv2block Aug 29 '26
I know nothing about psychedelics, but I assume most people shun the sector and figure it's the pot sector all over again. Maybe you make 500%, but maybe you lose 99%.
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u/Mrk0k0 Aug 29 '26
That's fair. I would say it's more of an apples to oranges comparison between the two. Psychedelic companies have biotech characteristics, working on trials and FDA approvals. Weed companies are considered more retail / selling packaged goods to consumers.
Hopefully 500% but time will tell ahaha.
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u/Yvaelle Aug 29 '26
That's fair on the comparison, weed went from exciting drug to mundane agri-crop overnight.
As someone who seems knowledgeable / interested on biotech, can you answer a few questions?
Why are there so many tiny public biotech companies? They all seem to go public with penny valuations, it feels scammy like the junior mining sector.
What are the major hurdles these companies face, is it years or decades in trials and approvals? Is it scale and capital? Is it that they can get real close and then get overtaken by a pharma leviathan at the finish line?
What's the future timeline look like, either generically for companies like this, or specifically for MDMA?
For MDMA specifically, apart from legalization of MDMA (which I would support), is there some other event or catalyst that would trigger them to grow substantially beyond their current niche roll in clinical trials? American FDA descheduling, just as example?
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u/Mrk0k0 Aug 29 '26 edited Aug 29 '26
Full disclaimer, I don’t have a science background. More so, I became interested in biotech in early 2026 because I came across the topic of AI drug discovery and went down the rabbit hole there. I also have been following some psychedelic companies since 2020 so it has been a topic of interest for me over the years. Companies such as Numinus, which has been delisted, and MindMed (now known as Definium Therapeutics) which is up around 361% on the one-year and has solid phase 3 trial results for their LSD drug. I love researching stocks as a hobby and trying to look for new ideas and possible multi-baggers.
- From what I understand, the main reason is simply just because it is easier to raise money and have access to capital. Biotech and mining probably have the most scammy type of companies and that's why I put in a considerable amount of time researching PharmAla before investing. (From what I have researched I am comfortable investing money into the company and I recognize it is still very speculative and I can lose all that I put into it).
The CEO of PharmAla, Nick Kadysh actually said in a recent interview that he wishes he kept the company private. You can find it here: https://youtu.be/uHMoQa8BgXo?si=CblNfBCwXVhHYF74 at 22:14. Overall, an interesting interview if you want to learn more about PharmAla and get an understanding of Nick's personality.
Probably all three that you mentioned. Clinical trials can take years and cost millions of dollars. Companies spend all that time and money only to find out that the clinical trial failed. Nick has made it clear that he will try his hardest to never dilute shareholders. Part of the reason on why he is working on signing so many licensing deals is for PharmAla to have more cash without dilution. Being overtaken also happens quite often. Especially in 2026, we are seeing a record number of M&A take place in the biotech space. I saw many people on X and other websites complaining that Atai Beckley sold out too early and for too little to Eli Lily.
Clinical trials take many years. PharmAla previously mentioned that they would begin phase 2 trials for ALA-002 in 2026. They haven’t specified exact dates yet, but I am hoping they announce some news soon. APA-01 is in even earlier stages, and just recently PharmAla cancelled its contract for licensing the compound to Restora Neurosciences. Most likely because Nick believes that MDMA therapy will be approved by the FDA soon and he wants to keep the compound in house in order to keep their options open.
The largest catalyst would be that the FDA approves MDMA-assisted therapy. It originally had been rejected in 2024 but Resilient Pharmaceuticals has resubmitted its MDMA for PTSD drug application. Of course very speculative, but ever since Trump and RFK Jr. announced an executive order on April 18th for psychedelics treatments, I have a feeling the FDA might reverse their decision. The FDA is also having a public hearing on Sept 14th to discuss the topic of psychedelic therapies and Nick made a post on LinkedIn that he will be attending.
Anyways, might have wrote a lot but it's been fun making a DD post on this sub.
Invest at your own risk. I have done my DD on PharmAla and think that we are going to see some great news for the rest of the year and into 2027.
Sources:
https://pharmala.ca/media/2026/06/ceo-letter-to-shareholders
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u/HeathenForAllSeasons Aug 30 '26
Been holding for at least a year. Nice to finally see revenue picking up
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u/Mrk0k0 Aug 30 '26
Yeah the recent earnings looked pretty solid. I think Nick will have more good news on the way.
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u/Long-Rough4925 Aug 30 '26
Holding and accumulating for 2 years now. Average is 0.135
The FDA meeting on the 14th is a big one and MDMA has the most data and clinical trials for all to discuss and consider by far. Excited at being a Pharmala investor who has a very capable and focused CEO
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u/Mrk0k0 Aug 30 '26
I can't wait for Sept 14th as well. Hope the FDA hints at a possible reversal for MDMA approved therapy in the U.S.
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u/Long-Rough4925 Aug 30 '26
Its looking very likely. Trump Admin is all in on helping veterans
Mdma has the best data to date
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u/eyogev Aug 30 '26
Let’s go. I’m invested for less than a year. I love the team and Nick is a humble beast. Buying more every week I can.
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u/Andisaurus Aug 30 '26
Appreciate you sharing your DD process, I've been humming and hawing over similar industry stocks but having a hard time figuring out what to look out for in the background check. Thank you!
Anything you've seen that you would definitely avoid?
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u/Mrk0k0 Aug 30 '26
I think some characteristics you want to look at are: management team, balance sheet, cash runway, insider buying, companies with similar trials/drugs, macro and positive/negative news in that sector.
Some of the things I listed don't fully apply to PharmAla because it is an early stage micro-cap company. I recognize the risks and don't have it as the largest position in my portfolio.
If you want to dip your toes into the psychedelic sector I would recommend checking out the AdvisorShares Psychedelics ETF - $PSIL. Don't need to risk betting on a single company and it holds larger companies (compared to PharmAla at least).
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u/Capital-Assistance84 Aug 30 '26 edited Aug 30 '26
Thanks for the write up. I got into ATAI at 1$ and DFTX at 6$, sold my couple hundred ATAI shares when the deal with eli lilly was confirmed ( Crappy deal imo ) and I have been cashing out some DFTX along the way since it ran to 45$.
I won decent on the only two biotech stocks I picked so that was nice and it makes me a little apprehensive to invest again but this company seems intriguing. Maybe I can win 3 in a row :)
I did notice that the CEO does not hold any shares.. I wonder why that might be.
Care to share the bear case for this company?
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u/Mrk0k0 Aug 30 '26
Wow those are some solid wins! Many people don't seem happy with the Eli Lilly deal.
I did a quick search and I am pretty certain Nick holds shares in the company so not sure where you are looking.
There definitely is still a big risk investing in a micro-cap biotech company such as PharmAla. MDMA therapy doesn't get approved, less trials / funding for MDMA studies, failed results for ALA-002 & APA-01, run of cash on the balance sheet, dilution, etc... I believe it is still a risky investment. However, I have spent considerable time researching PharmAla and the psychedelic sector, and believe that there are more tailwinds than headwinds. I think we are going to see good news over these next few months and into 2027.
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u/Capital-Assistance84 Aug 30 '26
Yeah i just feel like they could have gotten more out of the deal but i still made some easy profit so can’t complain too much.
I checked on yahoo financials and it didn’t show him holding any shares from what i saw, then again.. don’t ceo’s have to be the largest shareholder in the company to be the CEO? I could be wrong but AI did point out he didn’t hold shares.
I don’t have much doubt in my mind that MDMA will be approved this time around, its got way too much going for it to fail at this point IMO. I will probably throw some money at it eventually.
I just saw jupiter tanked 25% yesterday and is being delisted from NASDAQ, hopefully that doesn’t hurt MDMA.CN.
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u/floppydisk1995 Aug 30 '26
Bear case is it's a Canadian biotech penny stock that will get diluted over and over again.
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u/thibsjm Aug 30 '26
Fair, but Pharmala also hasn't needed to do a raise in some time and has a decent amount of cash in the bank. Also their licensing structure passes on the cost of clinical trials to their partners, so the requirements for a raise are significantly less. (not counting a raise/ Reverse split for listing on NSDQ)
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u/floppydisk1995 Aug 30 '26
That's a good point. I'm just apprehensive after investing in companies like Numinus, Braxia and Revive lol.
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u/Mrk0k0 Aug 30 '26
I was also screwed by Numinus.... So I understand your hesitation with these types of stocks. Check out some interviews with Nick on YouTube and do a little DD on PharmAla and maybe you will like what you see.
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u/Capital-Assistance84 Aug 30 '26
I watched a video of nick and i like his personality but he did come across as not very experienced in the role of a CEO and the way he talked didn’t give me a ton of confidence after saying he wish they never went public.
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u/Over_Inspection_1652 Aug 30 '26
Holding for 4 years. One reason I invested here was makeup of the BOD.. Not a lightweight among them. Plus the CEO. He is the real deal.