Diamond Equity Research Releases Update Note on Enveric Biosciences Inc. (NASDAQ: ENVB)

Core Insights - Enveric Biosciences has designated EB-003 as its lead development candidate, targeting severe mental disorders without the hallucinogenic side effects typical of psychedelic drugs [2] - The company has initiated a business development campaign to unlock value from its drug candidates through potential out-licensing agreements, with significant milestone payments and royalties anticipated [3][4] - Enveric has signed a $66.5 million non-binding term sheet with MindBio Therapeutics to out-license novel psilocin prodrug candidates for mental health disorders [11] - The updated valuation methodology reflects a valuation of $6.64 per share, contingent on successful execution by the company [12] Development of EB-003 - EB-003 is a neuroplastogenic molecule aimed at treating severe mental disorders like depression and anxiety, promoting neuroplasticity without significant hallucinogenic effects [2] - The compound is currently in pre-clinical development, with a Pre-IND meeting with the FDA planned for early 2025 [2] - Preliminary data indicates EB-003's ability to bind to the 5-HT2A receptor, which is crucial for its non-hallucinogenic potential in humans [2] Strategic Partnerships - Enveric has executed seven non-binding out-license term sheets with four strategic partners, potentially representing up to $410 million in milestone payments and future royalties [3][5] - The company has also inked two non-binding term sheets with an undisclosed biotechnology company for cannabinoid-COX-2 conjugate compounds, with potential milestone payments of up to $61 million [4][5] - These partnerships are designed to accelerate the development of drug candidates while mitigating financial and operational risks [5] Innovative Approaches - Enveric utilizes its AI platform, PsyAI™, and a library of novel psychedelic molecules, Psybrary™, to develop treatments for hard-to-treat mental health conditions [7] - The collaboration with MindBio Therapeutics focuses on developing a candidate from the NPP class for neuropsychiatric conditions, utilizing microdosing to reduce hallucinogenic effects [11]