Is MindMedicine Stock A Buy?

Mind Medicine (MindMed) Inc (NASDAQ:MNMD) is a psychedelic therapy developer that went public on the Nasdaq market on April 27, 2021. Psychedelics have not traditionally been accepted by legacy mental health and pharmaceutical companies. However, the company has three projects in its pipeline undergoing Phase 2 trials.

So, is MindMedicine stock a Buy?

It’s popular among retail traders, especially as psylocibin and cannabis legalization are slowly creeping across the United States. And the company holds a deep cache of $161 million in liquidity that it plans to spend on getting its pipeline moving while upgrading its technology division.

MNMD is not just focused on psylocibin – the company has two projects seeking to use LCD to relieve attention deficit hyperactivity disorder (ADHD) and anxiety. It also has a third using ibogaine as the active ingredient for an addiction treatment drug.

MindMedicine: Inside The Firm

MindMed is a pharmaceutical company focused on clinical development and studies of psychoactive hallucinogens as a treatment for a wide range of ailments. This includes candidates for anxiety, ADHD, opioid withdrawal, and cluster headaches. It also focuses on drug-assisted therapies for mental health.

The company has a broad pipeline of drugs under its research, including LSD, MDMA, DMT, and psylocibin. This gave it data to confirm dosages for ecstasy and presents possible use cases for mental health. And investors will get another status report on its clinical trials soon.

It also gained the attention of Shark Tank investor Kevin O’Leary, who became one of the company’s earliest investors. He spent some of 2020 promoting psychoactive drugs and this company as he was doing his due diligence and deciding to invest.

Is MindMedicine Stock A Buy?

After a big jump upon initially going public, MindMed is valued at over $1 billion. It’s too early to determine what it’s intrinsically worth, as it’s still a pre-revenue company. Everything will depend on whether its treatments are approved by the Food and Drug Administration, along with international regulatory agencies.

If you’re a fan of psychedelics and believe it will happen, then this is an intriguing stock to consider adding to your portfolio. Its big focus is on a digital medicine platform called Albert which also has collaborations from companies like Novartis (NVS) and Merck (MRK), along with the National Institutes of Health (NIH).

With this type of backing, it has a chance at succeeding in its quest.

MindMedicine Revenues and Earnings

Because it’s only a clinical-stage company, MindMed doesn’t have any revenue or earnings. None of its treatments are allowed to be sold on the general consumer market nor in a healthcare facility. 

The FDA is required for the safety and efficacy of any food- and drug-related treatments before you take them. Because of this, unregulated promoters are restricted from reaching consumers.

Once it has a treatment approved, MNMD can begin to generate earnings and revenues. At that point, we can only begin to address the real revenues. There’s an addressable market for each drug, but that doesn’t mean it will be immediately picked up. The company has to sell it.

And that’s just one of the hurdles ahead.

MindMedicine Asymmetric Payoff For Investors?

MindMedicine has more risk than a typical company because it’s a pharmaceutical company. In that regard, it lives or dies by the approval of its treatments. That creates an asymmetric payoff rewards for adventurous investors.

But it also has a secondary risk in that a lot of its treatments are based on drugs that are currently considered illegal.

This means that it’s even riskier than a cannabis company, as the government can draw a line wherever it wants. Our next administration could easily start another drug war, and that could certainly tank MNMD share price.

And investors don’t know how much top line sales could be yet. Its Albert platform is certainly impressive, but this may not be the future of telehealth that everyone expected. However, many in big pharma believe it is, so it’s getting a lot of buzz. But there is competition, especially in that arena.

MindMedicine has its fair share of competitors in the psychedelic space, like New Phase Research & Development, Alfasigma, Grunenthal and Kemwell Biopharma. Each has its own possible path to the finish line, and they all threaten its viability.

Is MindMedicine Stock A Buy? The Bottom Line

MindMed is a psychedelics company that went public in 2021 and has several treatments in its pipeline. The most promising are three Phase-2 clinical trials that could move forward this year. And it has an impressive balance sheet that means it should have no issue executing on its roadmap before its runway ends.

The company is in great shape and has support from the broader retail investment community. Of course, it needs to prove its value from here by actually generating revenue and sustaining it. There’s no telling how that will happen moving forward, but we do know it’ll involve technology and psychedelics.

If you love drugs, this could be a great play, but we don’t know enough about it yet. 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.