MindMed Catches Fire, Seeks To Up-List On NASDAQ

Compass Pathways (US:CMPS) has been hogging most of the headlines in the psychedelics space since it commenced trading on Friday. But perhaps no one is happier to see CMPS go public than the management of MindMed Inc (CAN:MMED / US:MMEDF) – and the company’s shareholders.

It was a quiet summer for MindMed investors.

As of Thursday’s close, MMED stock was trading at CAD$0.44. It had been flat for the last 3 months – and well off its high from the spring (CAD$1.00).

Two trading sessions later, MindMed is up more than 30% -- on big volume.

Monday’s volume of 4.88 million shares (on news of a NASDAQ application) was the biggest trading day for MMED stock since March 31, MindMed’s first month of public trading.

Why wouldn’t investors get excited?

Industry leading research

Compass Pathways has the best-positioned psychedelics clinical research program. Its Phase 2 clinical trial for a psilocybin-based therapy for treatment-resistant depression has been fast-tracked by the FDA.

With the backing of heavy-hitters such as PayPal’s Peter Thiel, Compass has the deepest pockets in the industry – now even deeper after going public.

It also has a rich market cap, already trading above the $1 billion threshold.

MindMed’s clinical research is arguably even deeper than that of Compass Pathways, via its collaboration with the University of Basel, Switzerland. MMED has three Phase 2 clinical trials already underway.

One program involves microdoses of LSD as a treatment for adult ADHD. Another involves the use of LSD to treat cluster headaches (or “suicide headaches”). The third is testing the efficacy of LSD to treat anxiety.

MindMed also has several other Phase 1 clinical research initiatives either underway or already complete. This includes MindMed’s unique research with 18-MC – a non-psychoactive ibogaine derivative – to treat addiction.

MindMed’s market cap? Even after its two-day run, it’s CAD$195 million (US$148 million).

That may be robust compared to most of the other publicly traded companies in the psychedelics space.

But it’s pretty lean compared to Compass Pathways. As of Monday’s close, Compass has a market cap of US$964 million.

That’s more than a six-bagger from where Compass is presently sitting. And if MindMed shareholders see a NASDAQ listing as the stepping stone that will get them there, who can blame them?

Summer is officially over.

Compass Pathways is now public company, and a psychedelic stock unicorn.

The market sleep-walked past several announcements by MindMed of advances in its clinical research over the summer. But autumn appears to be a new season for MindMed.

With Monday’s news of a NASDAQ application, the market – and investors – are now fully paying attention.

Satisfying NASDAQ listing requirements would likely require a sharp rollback to MindMed (currently ~330 million shares outstanding). Even so, if it will bring the increased liquidity and access to capital of a NASDAQ listing, shareholders will happily take their spoonful of medicine.

MindMed has already done well for itself with its primary listing on Canada’s fledgling NEO Exchange. But with a psychedelic drug clinical research program that is second to none, it may be time for MMED to graduate.

DISCLOSURE: The writer holds shares of MindMed Inc.
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