The Era Of Medical Psychedelics Is Upon Us

This morning, we received one of the most important clinical trial updates in many years. MindMed (Nasdaq:MNMD) announced that the company's Phase 2b trial for MM120 in GAD (generalized anxiety disorder) patients met its key secondary endpoint, demonstrating clinically & statistically significant durability of activity observed through week 12 after a single dose with no additional therapeutic intervention.

David Feifel, MD, PhD, Professor Emeritus of Psychiatry at the University of California, San Diego  stated:

"I’ve conducted clinical research studies in psychiatry for over two decades and have seen studies of many drugs under development for the treatment of anxiety. That MM120 exhibited rapid and robust efficacy, solidly sustained for 12 weeks after a single dose, is truly remarkable.

These results suggest the potential MM120 has in the treatment of anxiety, and those of us who struggle every day to alleviate anxiety in our patients look forward to seeing results from future Phase 3 trials.”

It’s hard to overstate just how large the market opportunity is in generalized anxiety disorder. There are 20,000,000 adults in the US with GAD, and 77% (more than 15 million) of those adults report having moderate to severe anxiety.

The current set of first-line treatments (benzodiazepines, SSRIs, etc.) are not effective in treating a significant percentage of the patient population. Furthermore, benzos and SSRIs have significant undesirable side-effects including addiction and reduced sex drive.

Based on the significant unmet medical need in the treatment of GAD – especially in patients who do not respond to or tolerate currently available medications – along with the initial clinical data from Phase 2b and other research conducted by MindMed, the U.S. Food & Drug Administration (FDA) has designated MM120 for GAD as a breakthrough therapy. MindMed plans to hold an End-of-Phase 2 meeting with the FDA in the first half of 2024 and initiate a Phase 3 clinical program in the second half of 2024.

The breakthrough therapy designation from the FDA is especially significant because this program is part of the FDA's broader effort to get promising new treatments to patients as quickly as possible. Drugs that receive Breakthrough Therapy designation can benefit from more intensive FDA guidance on an efficient drug development program, organizational commitment involving senior managers, and eligibility for rolling review and priority review.

This means that the FDA will work closely with the drug sponsor to provide guidance on the development process to expedite the development and review of the drug, including more frequent meetings and communications with the FDA.

Investors are cheering the breakthrough therapy designation news from MindMed, sending MNMD shares soaring more than 50% this morning:

MNMD (Daily)

Note that today's upside surprise from MM-120 Phase 2b trial data occurred in the direction of the preceding price trend (MNMD has been under accumulation since Q4 2023).

A couple of other points worth noting:

• MNMD had unusually high short interest, 13.07%, heading into today’s news.
• The company announced a $175 million offering of common shares and concurrent private placement.

With recent positive phase 2 clinical trial results from Cybin (CYB003 and CYB004), MindMed (MM120), Compass Pathways (COMP360), and imminent FDA approval of MDMA assisted therapy for the treatment of PTSD (Lykos Therapeutics, formerly MAPS), the era of medical psychedelics revolutionizing mental health treatment is upon us.