MindMed believes tripping could be big business

By Alma Fabiani

Published May 3, 2021 at 09:39 AM

Reading time: 2 minutes

“We help patients unlock the healing power of the mind through Psychedelic Inspired Medicines & Experiential Therapies. Together we can overcome,” reads MindMed’s website. The company is known for discovering, developing, and deploying psychedelic-inspired medicines to improve health, promote wellness, and alleviate suffering in patients. And that’s not all, on Tuesday 27 April, the biotech company went public on the Nasdaq exchange under the ticker “MNMD.” Here’s how MindMed hopes to capture shares of those markets with its alternative, psychedelic offerings.

After its Nasdaq listing debut on Tuesday, MindMed became the latest psychedelic drug developer to use a major US exchange as a pathway to raise money and bring new mental illness and addiction treatments deeper into the mainstream. This listing means the stock now trades on the Nasdaq Capital Market as well as on the NEO Exchange in Canada.

“Shares surged 33 per cent over the counter on Monday ahead of Tuesday’s listing,” reported Investor’s Business Daily. But things didn’t exactly go to plan—in a public market where stocks can do no wrong, MindMed got torched by close, dropping as much as 30 per cent.

That didn’t stop CEO JR Rahn to stay hopeful about the future of the stock listing, who said in a statement that it would “increase our visibility in the marketplace, improve liquidity, broaden and diversify our shareholder base, and ultimately enhance long-term shareholder value.”

And MindMed’s future does seem interesting. The biotech company is working on an array of projects from LSD’s impact on anxiety and ADHD to a compound it calls 18-MC (a non-hallucinogenic synthetic derivative of ibogaine that is in trials for addiction treatment).

And according to an investor deck, industry stats are all good trips to get on. The global antidepressants market is expected to grow colossally in the next few years, from anxiety and ADHD drugs to depression and anti-addiction treatments.

Like many other psychedelic drug companies, none of MindMed’s major projects has generated revenue or profit yet. In a March filing, the company said it expects operating losses to continue and that it expects to incur “significant costs associated with its research and development initiatives.”

It makes sense then that it is looking for opportunities to garner more attention and money. Now, the question is: is the stock a risky buy currently? Although the global psychedelic drugs market has grown significantly in recent years due to an increasing prevalence of mental disorders, depression, and breakthroughs relating to psychedelic drugs, the market still faces considerable risk and uncertainties before it can secure the US’ FDA approvals.

On top of that, the stigma associated with the use of psychedelic drugs is also a big burden. As of now, the psychedelic drugs market remains at an early developmental stage, with most companies still executing clinical trials. This could hinder MindMed’s growth in the near term. “Although its pipeline projects look promising, there remains high uncertainty regarding its commercial prospects and value,” writes Entrepreneur.

The stock soared 773.9 per cent over the past year, mainly because of a surge in the popularity of psychedelic drugs. That being said, uncertainties regarding a timeline for potential FDA approval of its therapies could mean danger ahead. That’s why it would be wise to avoid the stock and simply enjoy psychedelics as a recreational drug for now. Looks like MindMed is about to go on a bad trip…

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