As outlandish as it sounds, psychedelic chemicals like LSD might be the wonder drugs of the near future. If you're a skeptic, consider that a growing body of research over the last couple of decades has shown that psychedelics have the potential to help people with common but difficult-to-treat mental illnesses like depression and addiction. And where there's a way to improve over the existing solutions, there's money to be made.

That's where the psychedelic biotech Mind Medicine (MNMD 5.30%) comes in. The company has several therapy programs in development, all of which aim to leverage the latest research and biotechnology innovations to make psychiatric medicines that have never been commercialized before. Could the stock make its early investors into millionaires, or is it just another biotech that's having a moment before flaring out?

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The case in favor

There are a few things that make me think that Mind Medicine is a millionaire-maker that's worth investing in. 

First, it's developing several psychedelic therapies that target a handful of large and expanding markets. Drugs that treat depression, anxiety, addiction, and attention deficit hyperactivity disorder (ADHD) account for nearly $30 billion in global spending each year. If the company succeeds in developing a psychedelic therapy that could siphon off even a small portion of that sum annually, it'll make the current crop of investors quite rich. Because Mind Medicine has more than one drug in its pipeline, it even has the chance of striking gold more than once. Right now, three of its programs are in phase 2a of clinical trials.

Second, within its target markets, the traditional medications are not curative, and many are habit-forming or have significant side effects that can worsen over time. As an example, benzodiazepine drugs for treating anxiety disorders are known to be addictive, and can actually increase a patient's anxiety with regular use.

In contrast, Mind Medicine's psychedelic therapy program investigating LSD for anxiety builds on a growing body of research that shows treatment with the drug can lead to long-lasting relief with only one dose. And, so far, that relief doesn't seem to carry the same risks of addiction or counterproductive side effects. That means Mind Medicine will have a competitive advantage against the entrenched players if its therapies make it through the clinical trial process.

Finally, in some cases, the market penetration of existing therapies is quite limited compared to the estimated number of eligible patients. Only 36% of anxiety patients are estimated to seek treatment. So, there's plenty of room for Mind Medicine's innovative therapies to access new demand in addition to what's already there.

The case against

The biggest obstacles facing Mind Medicine are the legal, regulatory, and social barriers toward the acceptance and commercialization of psychedelic medicines. The medicines are still illegal in many countries, and so there isn't much formal understanding of how to use them to treat patients effectively. Plus, there's a bit of a social taboo that surrounds psychedelic drugs, which could inhibit their widespread adoption.

While these issues are shifting in Mind Medicine's favor over time, there's no guarantee that they'll continue to do so. If psychedelic therapies are outlawed or too heavily restricted, the company won't be able to succeed at all.

Then there's the standard set of risks that accompany a biotech stock. Drug development is an arduous process, and the company's programs could easily fail to demonstrate safety or efficacy. The same goes for its technologies, including its LSD neutralizer chemical that's intended to make psychedelic drugs into safer, more controllable, and mass-producible therapy regimens. No public business has succeeded in this endeavor before, and very few have tried until quite recently. 

The verdict

After its initial listing on the NASDAQ, Mind Medicine's stock had a rough May. But these losses don't detract from its potential for tremendous growth over the next decade. The field of psychopharmaceuticals is ripe for disruption regardless of the stock's price movements to date, and Mind Medicine is definitely the type of company that could be the ultimate disruptor.

And, as of June 10, lawmakers in California are currently considering whether to decriminalize psychedelic drugs and set up a system for potentially regulating their therapeutic use. So it looks like the regulatory issues could be finally loosening up, and that's a key enabler of Mind Medicine's future as a therapy maker.

Investors will probably need to wait a few years before revenue starts to roll in and the stock starts to pop, but I'm confident that this could be bigger than a ten-bagger. If this stock grows by 2,000% over the next decade -- a common occurrence for biotechs at a similarly early stage -- to reach a market cap of $16.4 billion, people who invested $50,000 today would become millionaires. And even with a smaller investment, it'd be quite a moneymaker. To me, Mind Medicine screams, "This is a millionaire-maker stock, buy it now!"