The article Key Takeaways from MindMed’s 2023 Corporate Update was originally published on Microdose.
On January 9th, psychedelic medicine company MindMed (Nasdaq: MNMD, NEO:MMED) released its 2023 corporate update. In it, the company explains to investors where its many programs stand, and the key catalysts to watch for in 2023.
With 2022 being in many respects a bad year for the company — for example, they cut some drug development programs such as 18-MC and their stock tanked by around 85% — MindMed is eager to reassure investors that it’s all uphill in 2023. (Despite this doomsday narrative, however, 2022 also saw many great moments for the company, such as the publication of positive data showing LSD can help alleviate anxiety symptoms.)
With that in mind, in reading MindMed’s 2023 corporate update, I am left with two key takeaways for the psychedelic company.
A Make it or Break it Year for MindMed Clinical Trials
It is hard to understate how important 2023 will be for MindMed when it comes to clinical trial results.
By the end of the year, MindMed should release data on its two flagship programs: treating Generalized Anxiety Disorder using LSD; and using LSD microdoses to treat Adult ADHD.
Both programs use MM-120, which is MindMed’s homemade version of LSD.
In late 2023, the public will get their first look at the results of the Phase 2b clinical trial treating Generalized Anxiety Disorder with large doses of LSD. This data reveal will be the clearest evidence yet whether MindMed’s bet on LSD will pay off.
The company had previously released data for their Phase 2a trial, treating various anxiety disorders with LSD, which had positive — though not revolutionary — results. The key takeaway from that trial was that 16 weeks after treatment, 65% of patients saw their anxiety symptoms decrease by at least 30%. This compared to only 9% in the placebo group.
If MindMed can replicate these findings in its larger Phase 2b trial, with 200 patients, it will not only justify the company launching Phase 3 trials — reminder, a new treatment must pass through two successful Phase 3 trials to become approved for use —but it should also reassure investors that LSD was a good bet.
By the end of 2023, MindMed also plans to release data on its Phase 2a trial, treating Adult ADHD with LSD microdoses. Despite conflicting evidence on the efficacy of microdosing psychedelics to date, the prospect of LSD microdosing as a medicine is what drew many retail investors to MindMed in the first place.
If MindMed shows that LSD microdoses can be an effective medication for Adult ADHD, then the company could be sitting on a gold mine, as 1 in 20 children take medications such as Adderall for ADHD (yes the current trial is in adults, but if it is shown to be safe and effective, trials in children will surely follow.) Small doses of LSD will almost certainly be found to be much safer than continuously taking amphetamine-based drugs, so now the question is just if it is more effective.
If it is, MindMed will be the closest to bringing this drug to market, which would be great for investors. More importantly, however, it could positively change millions of lives.
If both of these trials deliver positive results, then MindMed will have effectively proved the doubters of 2022 wrong. However, if one trial comes back negative, it could add fuel to the fire of doubt that many feel towards the company at the moment.
If both were to come back negative, it would probably be the beginning of the end for the company. But that is just my opinion, based on a scenario that I personally see as unlikely.
MindMed will also launch a Phase 1 safety trial of MM-402, which is a version of MDMA (the R-enantiomer of MDMA to be specific) in 2023. The company intends to use this medicine to help treat symptoms of autism.
Cash is Not a Problem…For Now
Of course in order to fund the science described above, the company will need tens of millions of dollars. Luckily, MindMed was able to raise north of $200 million when its stock price and market cap were much higher. As of the end of Q3 2022, the last reported quarter, the company had a healthy $154 million in the bank.
According to MindMed, this means the company has a cash runway into 2025. In other words, MindMed can survive for another two and a half years before running out of money.
This means that they have the necessary cash for the chance to prove to its investors that LSD, and MindMed itself, was a good bet. There is zero chance of the company having cash problems before we get to see the results of the LSD for anxiety, and LSD microdoses for ADHD trials.
If the trials are successful, MindMed will eventually have to raise capital again, as the window for them making serious revenue begins in 2026 — at the earliest.
That, however, is a problem for another day. If MindMed is able to publish positive results for its psychedelic clinical trials, and they show the world that they have revolutionary medicines in the wings for ADHD and anxiety, then its stock should respond positively. This would make raising capital in the future less painful.
That being said, the stock market reacting rationally — in the short term at least — is not guaranteed. Either way, we will just have to wait and see how 2023 plays out.