In a long-awaited move, psychedelic therapy developer Mind Medicine (or MindMed) (NASDAQ:MNMD) was registered on the NASDAQ on Tuesday of last week, causing its stock to explode by more than 50% compared to its level earlier in the month. While the price has settled from its recent heights, investors — myself included — are doubtless pleased. What’s more, retail traders from Reddit and Robinhood are also showing strong interest in the stock, which could drive it even further.
With the state of the company’s current set of projects and its roughly $161 million in cash, investors can look forward to other major catalysts stemming from MindMed’s new technology division and its progress in clinical trials over the next year without worrying about dilution from fundraising. So what might those catalysts be, and when might they happen?
Progress in the clinic will drive future growth
Perhaps the most important catalysts for shareholders are the company’s three headliner pipeline projects in phase 2 trials. Two of these projects seek to treat conditions like attention deficit hyperactivity disorder (ADHD) and anxiety using LSD, whereas the third is an investigational treatment for addiction using a compound containing ibogaine, a naturally occurring psychoactive found in certain plants. Phase 2b of the LSD-for-anxiety trial will start sometime in Q4. Before that, MindMed will need to file an investigational new drug (IND) application with the U.S. Food and Drug Administration (FDA), so investors can expect an appreciable bump in stock price if regulators assent to the trial.
Similarly, the company plans to initiate a phase 2a proof of concept trial to investigate the impact of microdosing LSD and psilocybin (magic mushrooms) for adult ADHD. But perhaps the largest potential stock impact will stem from the results of its phase 1 trial for addiction using the compound derived from ibogaine. If things proceed as planned, investors should know whether the project can proceed to the next phase by the end of the year, given that the trial itself is scheduled to conclude in the third quarter.
The company is also pursuing a slew of research projects that will open up new opportunities to expand its pipeline in the future. In early April, MindMed published new data regarding its personalized MDMA (ecstacy) therapy project. The data confirms that “the dose of MDMA can be optimized using predictors [such as] body weight, sex, age, genetics, personality trait measures, and mood before drug administration.” If you’re a pharmacologist or medical professional, that finding might seem a bit obvious. But for MindMed’s purposes, it’s a key piece of knowledge that will be foundational for further clinical research into using MDMA to treat mental illnesses.
Will new collaborations bear revenue?
Aside from its core clinical projects, MindMed is also diversifying into digital health. Surprisingly, the company may soon start to earn revenue as a result of its brand-new Albert digital medicine platform. While Albert is still in its early form and details are quite scarce, it appears to be a consumer-facing mental telehealth service that links telehealth with self-reported health metrics from patients. As part of MindMed’s work on Albert, it has secured a bevy of collaborations with companies like Merck and Novartis, not to mention public entities like the National Institutes of Health (NIH).
It’s unclear exactly how much revenue these partnerships could produce or when revenue might be reported, but every dollar would provide the company with a longer runway to work on its core pipeline projects. Especially if one of the big pharma players thinks that Albert is a lucrative project, MindMed could easily get a major new investment while solidifying its ties to powerful allies.
In summary, MindMed will be busy for the rest of the year, and its stock could be charged up by a handful of different factors. Investors should keep an eye out for MindMed’s next earnings report to learn more about management’s plans for Albert, not to mention more details about potential revenue from its software-driven partnerships.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.