Apr 18, 2023

Medical Psychedelics Alert: These Two Psychedelic Leaders Are Making Headlines

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MedicalGold sector alert - 9:30am 4/18/2023

MindMed and Numinus are at the forefront of medical psychedelic research and utilization, and are two of our focus companies due to their advancements in the field. MindMed's ongoing Phase 2a/2b clinical studies of their proprietary LSD analog (MM-120) as a treatment for anxiety and major depressive disorder are poised to introduce this drug as the first true psychedelic to gain FDA approval. Moving up the value chain, Numinus's aggressive clinical expansion has positioned itself as the leader in the psychedelic-assisted therapy segment of the industry. This rapid growth is due in large to Numinus' acquisition of Novamind in June 2022, which expanded their network of wellness clinics (12 in total across the USA and Canada) and provided Numinus with new CRO capabilities and 2 new research sites in which to conduct clinical trials (as a 3rd party contract service). The impact on Numinus's bottom line is enormous, boasting gross margin growth of 40.7% during the first six months of fiscal 2023 (ended February 28, 2023) compared to 17.8% during the same time period last year. Clearly, the use of medical psychedelics to treat mental illnesses is gaining purchase in the mental health space, and these two companies are paving the way.


MindMed recently announced positive topline data from their Phase 2 study of LSD as a treatment for major depressive disorder (MDD), confirming their preliminary results by demonstrating long-lasting anti-depressive effects up to 16 weeks after administration of the first of two ascending doses (100ug followed by 200ug four weeks later). This effect was both clinically meaningful and statistically significant (as measured by the clinician-rated Inventory of Depressive Symptomatology, IDS-C). These results provide additional context for LSD’s therapeutic potential to treat a variety of mental illnesses, and support the use of MindMed’s proprietary LSD compound, “MM-120”, as both a treatment for anxiety (in Phase 2b) and depression. More information about the trial can be found on the clinicaltrials.gov website [NCT03866252].

The company has also strengthened its legal arsenal by appointing Mark Sullivan as Chief Legal Officer and Corporate Secretary, a strategic move as the company’s co-founder Scott Freeman battles over patent rights with former co-founder, Stephen Hurst. In an alleged bizarre and pernicious move, Hurst allowed a MindMed patent protecting their LSD analog (BOL-148) to lapse, freeing it to be licensed to Hurst’s (alleged) accomplice Carey Turnbull, CEO of Ceruvia Biosciences. Scott Freeman alleges that both Hurst and Turnbull conspired to defraud shareholders to gain access to IP at Freeman’s expense. It is important to note that MindMed is not directly involved in this lawsuit (filed 9/2/2022), which names Freeman as the plaintiff and Hurst and Turnbull as the defendants (in addition to some affiliated corporations). MindMed is staying out of the ongoing litigation, and stated that they are confident in their patent prosecution strategy for lead LSD and MDMA drug candidates (MM-120 and MM-402, respectively).

MNMD (Daily)

At the end of 2022, MindMed had $142.1 million in cash and cash equivalents. The company has had a cash burn rate of roughly $15 million per quarter, which gives the company cash runway into 2025. Remarkably, at today's share price, MNMD is trading near its cash value, giving the company little credit for its clinical trial progress. The MNMD daily chart illustrates a stock that just put in place a higher low, and has begun to turn higher. Technical momentum indicators (RSI and ROC) are breaking higher and indicative of a nascent uptrend that has plenty of further room to run. The next area of potential resistance is near $4.00, which is approximately 15% above Monday's closing level.


Numinus’s rapid expansion of psychedelic-assisted therapy (PAT) clinical across the USA and Canada was catalyzed by their acquisition of Novamind in 2022. Their revenues grew 600% year-over-year to CAD $11M in the first 6 months of fiscal 2023 (ended February 28, 2023). During this time, their gross margin grew 40.7% compared to 17.8% in the same period last year, which the company largely attributes to the completion of the Novamind acquisition offering higher-margin services. In addition to their PAT clinics, revenue is generated by contract research organization (CRO) services through Numinus’s Cedar Clinical Research group, which coordinates clinical trials for other biotech companies. Numinus recently opened its 3rd clinical trial site in the USA (and 5th site overall) in Phoenix, AZ.

Numinus recently launched a new clinic licensing platform (the “Numinus Network”) that gives independent practitioners the opportunity to own and operate their own clinic under the Numinus Wellness brand through a franchise model. This licensing model will allow Numinus to keep scaling with limited capital outlay and overhead, and will expand patient access to psychedelic-assisted therapy. Practitioners that are unfamiliar with PAT will be given the option to participate in the company’s new certification pathway, an 8-week, 4-course curriculum which requires students to undergo multiple types of learning experiences, including an experiential component in which the student will actually received psychedelic compounds.

The company is also pursuing FDA approval for their proprietary Psilocybe cubensis (“magic mushroom”) tea (“EnfiniTea”), and was recently granted a Clinical Trial Application (CTA) to begin a Phase 1 study (“ A Phase 1, Open-Label, Single-Arm Study to Evaluate Psilocybin Experiential Training in Healthy Volunteers and Expand Knowledge and Qualifications of Therapists Planning to Conduct Psilocybin-Assisted Therapy (NUMT2)”) by Health Canada. This clinical trial will be the first to test the whole Psilocybe mushrooms for safety and efficacy, and will provide experiential training for practitioners learning (but not completely new) to conduct PAT.


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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