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Meme stock Mind Medicine: Will MNMD board follow Reddit value enhancing plan?

By Jenny McCall

11:30, 23 August 2022

Images of meme stocks on a iPhone.
The Freemans wrote a harshly worded letter to MindMed’s senior management team - Photo: Shutterstock.

It began with Bed Bath and Beyond (BBBY) and now it's time for psychedelic medicine and biotech company, Mind Medicine Inc. (MNMD), to receive some business strategy advice from its two new activist investors.

MNMD, also known as MindMed saw its stock price surge on Thursday by 38% after it was announced that a college student, called Jake Freeman who made $110m (£93m) in the BBBY rally, also has an activist stake in the pharmaceutical company, alongside his uncle, Dr. Scott Freeman. The pair wrote to MNMD, advising them on how to improve its business - but will the MNMD board listen?

The FT reported on the success the Freeman family had, which saw the student receive a huge windful on a $25m investment in BBBY, which ultimately netted him a profit in the US homeware company, as the meme stock's price increased.

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Mind Medicine (MNMD) share price chart

The value enhancing plan

The Freemans then moved onto MNMD, and like BBBY, the family wrote to Mind Medicine, outlining their value enhancing plan and posted it on the social media site Reddit, causing MNMD to gain meme stock status. 

Dr Scott Freeman, who also manages an investment fund called Freeman Capital Management Fund (FCM), wrote to MindMed’s senior management team, calling on them to adopt his strategy of refocusing on their core drugs and to reduce cash burn.

The value enhancing plan said: “As detailed in the letter, 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 (MNMD) 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 $45m dollars per year to under $25m dollars. By executing these proposals, FCM believes that MindMed (MNMD) can unlock significant long-term value for MindMed's shareholders.”

The Freemans stressed that 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.”

Like BBBY, MindMed (MNMD) saw its stock price surge last week and then again on Monday, after the Freemans sent their proposal to the company and posted it on Reddit. MNMD, which uses psychedelics to treat brain disorders, saw its share price rise by 12% yesterday, but it fell back down later in the day.

Bed Bath and Beyond (BBBY) share price chart


Will MindMed listen? 

So, will MindMed (MNMD) follow the Freemans proposal?


67,541.00 Price
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Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
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3,501.51 Price
+0.020% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
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0.62 Price
+2.890% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


19,717.50 Price
+1.040% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

Dr Freeman wrote his letter on 11 August, the very next day, MindMed (MNMD) released its financial results and stated that it would be shelving its 18-MC (MM-110) program for opioid withdrawal.

Robert Barrow chief executive of MindMed, said: “Following a productive Type C meeting (with the Food and Drugs Administration), we received feedback from the agency in which they requested Additional Preclinical Characterization of MM-110. That will now be required prior to initiating the proposed Phase 2a trial in the US.”

“We agree with the agency, as this information would be necessary to treat participants and our plan Phase 2a clinical trial with what we believe to be an adequate dose and duration. Given the time and cost that would be required based on these recent developments, we are reallocating our internal resources from this program to our other product candidates that we believe have a higher probability to generate near-term value for our shareholders.”

The above statement appears to go against the Freemans proposal, where they state the company should in fact refocus its efforts on its core drugs, one of which is MM-110 (18-MC).

All is not lost

With that said, on the same earnings call, Barrow said:

“Based on this assessment, we were reaffirming our key near-term strategic priorities and are focusing our resources on advancing our MM-120 program in Psychiatric Education, specifically Generalized Anxiety Disorder and Attention Deficit Hyperactivity Disorder and our MM-402 program and autism spectrum disorder.

“We are encouraged by these positive data which reinforce decades of clinical evidence of the potential therapeutic effects of LSD and anxiety and depression and further support our clinical development strategy and our enthusiasm for our MM-120 program and GAD.

Barrow highlighted that this is “just the beginning” for the MM-120 program and that the teams’ priorities are to advance the ongoing clinical trials with MM-120.  

MM-120 was one of the drugs that the Freemans urged MNMD to focus on.

So, it seems that MindMed (MNMD) may indeed be listening to the Freemans advice.

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