NEW YORK, Aug. 11, 2022 /PRNewswire/ -- Mind Medicine (MindMed) Inc. (NASDAQ: MNMD), (NEO: MMED), (the "Company" or "MindMed"), a clinical stage biopharmaceutical company developing novel products to treat brain health disorders, reported (8/11/22) its financial results for the quarter ended June 30, 2022. MNMD stock jumped 20% from Monday (8/8/22) on Friday's news.
Mindmed's stock jumped 20% on Friday's shareholder update and the announcement of a "Value Enhancement Plan" by two of Mindmed's large shareholders (see below). Compared to last year's second quarter, the company's G&A costs declined by almost $30M to $7.6M (for the 3 months ended June 30, 2022), a strong indicator that Mindmed's management understands the tough market environment and isn't counting on raising significant capital anytime soon. Research and development increased by ~$1M to $9.3M. Overall, Mindmed's net loss decreased by ~$28M. The company finds itself in a healthy financial position with ~$105M cash in the bank and only ~$10M in liabilities.
Value Enhancement Plan
Two of Mindmed's large shareholders, Dr. Scott Freeman (5.6% of MindMed's shares outstanding) and Chad Boulanger (4.51% of MindMed's outstanding shares), sent a letter to Mindmed's Board calling on the Board to adopt a new strategic plan proposed by Dr. Freeman's investment company (FMC) including: refocusing on its core drugs, cutting cash burn, and terminating MindMed's at-the-money equity offering. FCM believes MindMed has underperformed—operationally, financially, and strategically—as a direct result of management's lack of focus on its core drugs: MM-110 (18-MC) and MM-120 (LSD). FCM contends that MindMed can bring MM-120 to market in four years rather than seven to eight years, by re-classifying MindMed's Phase IIb study on MM-120 to a Phase III study. FCM also proposes that the Company reduce costs from forty-five million dollars per year to under twenty-five million dollars and that the unnecessary and dilutive at-the-money offering should be eliminated. By executing these proposals, FCM believes that MindMed can unlock significant long-term value for MindMed's shareholders.
FCM's large economic stake in MindMed reflects its convictions regarding MindMed's potential and gives it a strong interest in the success of MindMed.
Author owns MindMed shares at the time of publishing and may choose to buy or sell at any time without notice.
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