Compass Pathways is a new IPO that shot up the NASDAQ charts over the past week. Investors are jumping on the stock because of its position in the growing psychedelics industry. We at Insider Financial are bullish on psychedelics as well; however, there’s a better play in the space than Compass Pathways, and that is MMEDF. In this article, we take a look at the bull case for MMEDF as it works to become a dominant player in the psychedelics industry.
First up, here’s a little background info for those not familiar with MMEDF. Mind Medicine (MindMed) Inc. is a neuro-pharmaceutical company that discovers, develops, and deploys psychedelic-inspired medicines to improve health, promote wellness, and alleviate suffering. The company is assembling a compelling drug development pipeline of innovative treatments through human clinical trials to help patients with mental and behavioral health issues, including substance use disorder.
The MindMed executive team brings extensive biopharmaceutical industry experience to this groundbreaking approach to the development of next-generation psychedelic medicines. MindMed trades on the NEO Exchange under the symbol MMED. MindMed can also be traded in the US under the symbol OTC: MMEDF and in Germany under the symbol DE:MMQ.
University Hospital Basel’s Liechti Lab
MMEDF has a collaboration agreement with University Hospital Basel (UHB), licensing the rights to one of the richest libraries of human psychedelics data in the world. MindMen received a plethora of data owing to its exclusive collaboration with Liechti Lab, giving it access to over 10 years of psychedelics research. The company has already advanced five programs—including three Phase 2 studies for adult ADHD, anxiety disorder, and cluster headaches, respectively.
The primary focus for MMEDF is the following:
- LSD for anxiety ADHD
- 18-MC for OUD
- LSD for adult ADHD
- LSD for cluster headaches
18- methoxycoranaridine (18-MC, Ibogaine derivative) program
The 18-MC program has developmental roots dating back to the mid-1990s and had previously received US$6.8 million in grant support from the National Institute on Drug Abuse (NIDA) in 2012 for its study as an anti-addictive treatment. The investment thesis for MMEDF surrounds this program as a frontline therapeutic option for opioid use disorder (OUD), a $40 billion market opportunity.
Currently, there is no mainline non-opioid medicine approved to treat OUD. Most therapeutic options involve alternative opioids to wean patients away from their primary opioid addiction (i.e. methadone for heroin withdrawal). MMEDF is currently concluding its Phase 1B dosing study of 18-MC and intends to commence a Phase 2a trial before the year-end.
MMEDF 18-MC Approval Likely
18-Methoxycoronaridine is not listed as a Schedule 1 drug in the U.S. by name. And while chemical derivatives of controlled substances (ibogaine in this case) can still qualify as controlled substances without being documented explicitly, 18-MC does not produce similar hallucinogenic effects, thereby reducing the potential for abuse and regulatory scrutiny by proxy.
Also consider that as recently as October 2013, 18-MC was considered “Not Controlled” in a status decision determination by Health Canada. In their opinion, 18-MC is not structurally similar to any drug included in the schedules to the Controlled Drugs and Substances Act (CDSA). Although it is unclear whether that determination remains in effect today, we can find no evidence its status has been reversed.
Currently trading with a market cap of $141 million, MMEDF is an exciting story among small caps with Shark Tank star Kevin O’Leary as an investor. The company just applied to uplist to NASDAQ and Canaccord Genuity just came out with a US$1.30 price target on the shares. We believe MMEDF can go much higher than US$1.30, especially when you consider that Compass Pathways has a current market cap of $1.5 billion. With Oregon and Washington, DC set to vote on decriminalizing psilocybin on November 3, we see the bull run in MMEDF continuing.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in OTCMKTS:MMEDF or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.