After an upsized financing, MindMed is cashed up to power higher for psychedelic stock investors
It’s good to be
MindMed Inc (CAN:MMED / US:MMEDF / GER:MMQ) these days.
- It has the backing of high-profile investors like Kevin O’Leary and Bruce Linton
- It has the deepest psychedelic drug R&D portfolio among all public companies
- Its share price has ran from CAD$0.44 to $CAD1.03 since September 18th
And that is
after a 20% hit to MMED due to weakness in the broader markets. But there is every reason for shareholders to believe that MindMed stock will soon be hitting new highs.
As psychedelics investors already know, MindMed has
applied to uplist on the NASDAQ. That application was made over a month ago, meaning a decision (one way or the other) should be coming shortly.
With CMPS having already launched a successful NASDAQ IPO and with the psychedelics sector having the strong support of numerous financial heavyweights, there is no reason to expect a rejection by the NASDAQ.
Psychedelic Stock Watch has already examined the implications of a MindMed uplisting to the NASDAQ – both for the company and the sector as a whole.
Well capitalized for psychedelic drug success
Since that time, MindMed has closed on
an upsized CAD$28.75 million financing. Money makes the world go round and nowhere is that truer than with public companies.
Industry leader Compass Pathways sits with (by far) the most robust treasury among public psychedelics companies. The US$146.6 million it raised for its IPO financing supports a market cap of $1.1 billion.
With MindMed’s latest raise, it now sits with
cash reserves of CAD$50.1 million. This should be ample capital to advance its own market cap from (after last week’s selloff) <CAD$300 million. This is especially true given that MindMed boasts the most robust psychedelic drug research program in the industry.
Compass has a highly-publicized (and well-positioned) Phase 2 clinical trial for a psilocybin-based therapy for treatment-resistant depression. But MindMed has three research initiatives at the Phase 2 stage of clinical trials.
- LSD microdosing for the treatment of adult ADHD
- LSD therapy to treat cluster (or “suicide”) headaches
- A third LSD-based trial for the treatment of anxiety
Backing that up are several other R&D programs at the Phase 1 stage of clinical trials. This includes 18-MC: MindMed’s non-hallucinogenic ibogaine derivative for the treatment of addiction. MindMed has been able to develop such a deep portfolio through its collaboration with the University of Basel (Switzerland).
Compass Pathways has the most prospective individual research initiative among public psychedelic drug companies. But over the longer term, MindMed’s portfolio may demonstrate more overall value for shareholders.
A top performer among psychedelic stocks
MMED has actually outperformed CMPS since Compass went public on September 18th, by roughly 50%.
Compass Pathways
September 18th: $17 October 30th: $32 Change: +90%
MindMed
September 18th: CAD$0.44 October 30th: $CAD1.03 Change: +134%
A NASDAQ listing for MindMed would further improve the company’s access to capital. It would also provide much greater exposure for investors and put MindMed on the radar of a host of institutional investors for which MMED is not eligible.
Even before MindMed’s latest financing, Psychedelic Stock Watch already posed the question:
Despite a very tough week for global markets, that achievement appears to be an even better bet for MindMed today.
Yes, the COVID-19 pandemic is worsening as the world braces for a second wave. But COVID is also primarily responsible for a rapid escalation of the Mental Health Crisis: stress-related disorders like depression, anxiety, addiction and PTSD.
With mainstream medicine failing miserably to cope with these afflictions, psychedelic drugs stand out as (by far) the best hope to successfully treat the 1+ billion people suffering from these mental health disorders.
That also puts psychedelic drugs (and psychedelic drug companies) in line to capture these multi-billion-dollar treatment markets.
Given the size of the treatment markets and the research and market potential of the psychedelic drug industry, there is plenty of room in this sector for more than one winner.
That said, with the possible exception of Compass Pathways, no psychedelic drug company appears to have better prospects for corporate success today than MindMed Inc.
DISCLOSURE: The writer holds shares of MindMed.
