NEW YORK, May 20, 2026, 18:02 EDT
Jupiter Neurosciences dropped late Wednesday. The stock had jumped earlier after the company said it plans to license PharmAla Biotech’s MDMA-based ALA-002 for U.S. use. A few hours after that announcement, Jupiter set terms for a $2 million stock sale. The shares reversed hard, erasing the day’s advance.
The stock traded at $0.205, off about 37% from its last close, after swinging from an intraday high of $0.67 to a low of $0.1809. Volume topped 230 million shares, which is a big day for a company with a market cap close to $7.2 million.
Jupiter’s push into psychedelic-assisted psychiatry lands as U.S. regulators speed reviews in the sector. Reuters in April said the FDA gave national priority vouchers to three firms following an executive order for psychedelic drugs with breakthrough-therapy label.
Jupiter and PharmAla said Wednesday they’ve signed a non-binding term sheet that hands Jupiter exclusive, perpetual rights in the U.S. to ALA-002, which is described as a next-gen, non-racemic MDMA NCE. FDA classifies it as chemically distinct from previous MDMA products. PharmAla put the potential value at over $100 million. That includes $3.33 million as an upfront payment, milestones, and royalties. Jupiter will put $600,000 in escrow. The two sides have set a 90-day window to wrap up definitive contracts.
MDMA, most recognised as ecstasy outside of medical settings, is at the center here. The companies have positioned ALA-002 as a therapeutic candidate with tight controls, not meant for consumers. PharmAla said it will hold onto the rights for markets outside the US.
Christer Rosén, chairman and CEO at Jupiter, said the planned deal is “strategically aligned” with Jupiter’s CNS focus. PharmAla’s founding CEO Nicholas Kadysh said ALA-002 would have a “dedicated U.S. development and commercialization home” under the arrangement. GlobeNewswire
Jupiter announced a securities purchase agreement to sell 7,142,858 shares in a registered direct offering for roughly $2 million in gross proceeds. The deal puts shares directly in the hands of selected investors. D. Boral Capital is acting as exclusive placement agent. Closing is expected around May 21, pending standard conditions.
That sale is part of the reason for the turnaround. Selling new shares can raise cash a company needs, but it also means more shares are out there, which dilutes holders.
Jupiter’s balance sheet was stretched before. In its Q1 filing, the company posted $18,652 in product revenue and a net loss of $2.06 million. Cash at March 31 stood at $2.36 million, with an accumulated deficit of $36.7 million. Management said those numbers raised big doubt about its ability to keep going as a business, saying Jupiter might not have enough funding to last 12 months without new capital.
But there’s more at stake than just this financing. The ALA-002 deal is still only at the term sheet stage, not a closed transaction. Jupiter needs to pass due diligence, finish up documentation, and get any approvals. The company also has to deal with Nasdaq rules—a February filing said Jupiter has to be back in compliance with the $1 minimum bid price and $35 million market value standard by Aug. 25, 2026.
Compass Pathways and AtaiBeckley still dominate the field. The two companies—both working on mental-health drugs—trade at much higher valuations than Jupiter. Compass Pathways, focused on a psilocybin-based treatment, is valued at about $1.42 billion. AtaiBeckley sits around $890 million. Jupiter’s market cap is about $7 million.
Jupiter’s got a deal in the headlines, fresh funding, and a Nasdaq clock ticking. Now comes a quieter test—can Jupiter get the PharmAla term sheet locked in and keep the work funded without taking another hit on its shares?
