There was a major buzz in the psychedelic drug industry on Wednesday.
MindMed Inc (US:MNMD / CAN:MMED) has made a change at the top.
Co-founder and former CEO JR Rahn has stepped down. MindMed’s Chief Development Officer, Robert Barrow, is stepping up to fill that role.
Rahn’s contribution to the company cannot be denied. He led MindMed from being a small Canadian startup to a NASDSAQ-listed company on the Russell 3000.
During his tenure, MindMed has raised ~US$200 million since going public, the most capital raised by a public company in the emerging psychedelics space.
The hunger of institutional investors for a piece of the action with MindMed comes from its deep R&D portfolio of clinical and pre-clinical drug development initiatives. Via its research partnership with the University of Basel (Switzerland), MindMed has now advanced three of these initiatives to Phase II of the clinical trials process.
Other pipeline initiatives, including ibogaine derivative 18-MC are also generating considerable excitement among investors.
However, controversy arose with news that Rahn had recently sold approximately half of his MindMed holdings. Coming at roughly the same time as a similar-sized sale by major shareholder, Bruce Linton, the optics for both Rahn and MindMed were less-than-optimal.
Consequently, JR Rahn has stepped aside. In a news release
announcing his departure, MindMed simply stated that “[t]he Company will also initiate a comprehensive search for a chief executive officer”.
But is JR Rahn’s replacement already in place?
Chief Development Officer Robert Barrow takes the reins as CEO
On
January 14, 2021, MindMed announced the appointment of a new Chief Development Officer “with FDA Phase 2 psilocybin clinical trial experience”: Robert Barrow.
Barrow has more than a decade of experience as a pharmaceutical executive. More specifically, he has overseen numerous early- and late-stage clinical trials, first with Olatec Therapeutics and then with the Usona Institute.
More specifically still, Robert Barrow was responsible for launching
a Phase II clinical trial for a psilocybin-based therapy, which received
Breakthrough Therapy Designation from the FDA.
With JR Rahn’s departure, Barrow has now assumed the role of CEO with MindMed. As a company launching
three psychedelics-based Phase II clinical trials (and hoping to obtain its own Breakthrough Therapy Designations), MindMed can obviously benefit from Barrow’s drug development experience.
Barrow backstops his practical pharmaceutical experience with a strong academic background. He holds both a Masters degree in Pharmacology as well as a Bachelor of Science.
In short, if MindMed had already been actively hunting for a new CEO, Barrow may have been their choice. As things stand, MindMed has explicitly stated that “Mr. Barrow will be a candidate” as they continue this process.
For MindMed, having someone with Robert Barrow’s particular credentials in house makes this transition a much less painful process.
As MindMed goes head-hunting, it has two options. It can find a long-term replacement for Barrow and move him back into his Chief Development role.
Alternately, if MindMed doesn’t find someone with even more attractive credentials than Barrow to come in as CEO, they can simply allow him to continue as CEO – but on a more permanent basis. Instead, they could look to bring in some new talent specifically centered on corporate development, to compliment Barrow’s drug R&D expertise.
MindMed ready for its next leg of corporate development
As MindMed’s Co-Founder and original CEO, JR Rahn brought with him more of a general “tech” background. It has served MindMed well.
Among the public companies that commenced trading with MindMed (or since that time), MindMed boasts – by far – the most growth. Even with the compressed valuations for psychedelic stocks through much of 2021, MindMed’s market cap has increased more than ten-fold from a year ago.
Now, however, as MindMed enters the “proof of concept” stage with several of its clinical trials (Phase II), the company can clearly benefit from having a CEO with a resume loaded with clinical trials experience.
If MindMed, in turn, replaces Robert Barrow with a different CEO, that will be a positive for the company – and its shareholders. The MindMed Board will certainly not a name a replacement for Barrow with inferior qualifications.
However, if MindMed chooses to confirm Barrow in his new role, this is in no way a “negative” for MindMed. Should MindMed decide (after doing its due diligence) that Robert Barrow is the best person for the role of CEO, it’s unlikely to raise any eyebrows.
MindMed is a drug development company seeking (in particular) to pilot several of its psychedelic drug research initiatives through Phase II of the clinical trials process. Robert Barrow has been there and done that, including specific experience with a psychedelic drug Phase II clinical trial.
The circumstances surrounding MindMed’s recent change at the top are not ideal. However, as shareholders look back at this in hindsight, they could easily end up pointing to this as a positive turning point in the company’s evolution.
The JR Rahn era of MindMed’s corporate development has ended. A new chapter has commenced, one which has every indication of being even more exciting than the chapter that preceded it.
