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Mind Medicine stock forecast: Can MNMD benefit from meme stock fans’ attention?

By Mensholong Lepcha

Edited by Jekaterina Drozdovica

17:15, 26 August 2022

Abstract artificial intelligence image drawn in 3D illustration
Mind Medicine stock forecast Photo: k_yu / Shutterstock

Clinical stage psychedelic medicine developer Mind Medicine (MNMD) saw its stock soar over 30% in a single session in mid-August on news of activist investors taking a stake in the company.

The stock gained attention on reports that a college student who had made over $100m in the Bed Bath and Beyond (BBBY) short squeeze in August had built an over 5% stake in Mind Medicine stock price in partnership with his uncle.

The activist investors revealed that they sent a proposal letter to the Mind Medicine board, detailing ways to overhaul the company’s business and help its stock price appreciate.

What does this mean for Mind Medicine and any Mind Medicine stock forecast? We take a look at the latest news and other factors that could affect the company’s share price.

Mind Medicine: Developing drugs with LSD

Mind Medicine, also known as MindMed, is a clinical stage biopharmaceutical company that develops psychedelic medicines and therapies to treat brain disorders. 

According to the company's 10K SEC filing, its focus lies in the medical field of psychiatry, addiction, pain and neurology.

MM-120, a pharmaceutically optimised form of lysergide (LSD), is the company’s lead drug candidate. MM-120 is being developed for the treatment of generalised anxiety disorder (GAD) and attention deficit hyperactivity disorder (ADHD).

MM-120 is currently undergoing Phase 2 studies in GAD and ADHD.

The company’s other drug candidates include MM-110, which is being developed for the treatment of opioid withdrawal, and MM-402 for the treatment of core symptoms of autism spectrum disorder.

MindMed is also developing a regulated software-as-a-medical device for patients and healthcare providers to diagnose, prevent and treat brain health disorders.

Based in Vancouver, Canada, the company’s stock is listed on the country’s NEO Exchange, Germany’s Börse Frankfurt and the Nasdaq Stock Exchange in the US under the ticker symbol MNMD.

Price history: Nasdaq debut in 2020

Since its Nasdaq debut in March 2020, the stock has climbed from $0.40 to $0.83, as of 25 August close.

In 2022, the Mind Medicine stock price has suffered in the bear market. The stock has fallen about 45% year-to-date, compared to the benchmark Nasdaq Composite index’s (US Tech 100) loss of 20%, as of 25 August 2022.

Mind Medicine saw a wild rally in August after the Financial Times reported that college student Jake Freeman, who had made $110m earlier in the month in a Bed Bath and Beyond (BBBY) short squeeze rally, had built a stake in Mind Medicine.

Mind Medicine stock price, 2020 - 2022The MNMD stock price surged over 10% and over 36% on 17 August and 18 August, respectively, to hit a six-month high of $1.33.

The drug company then saw three straight days of losses as it fell over 40% to close at $0.798 on 23 August. As of 25 August close, the MNMD share price was trading at $0.83.

Mind Medicine’s all-time high on the Nasdaq stands at $5.77, which it reached on 27 April 2021. The stock had crashed to an all-time low of $0.083 on 6 March 2020.

Activist investor news: Freemans build 5.6% stake in MNMD

The Financial Times report on the activist stake in Mind Medicine has been the biggest market-moving news for the stock in 2022.

Following the report, MNMD stock posted a 36.1% closing gain on 18 August –  its biggest intraday rise in 2022. During the session, the MNMD stock price had gained as much as 77.5% to an intraday high of $1.33 before trimming gains to close at $1.02.

According to the Financial Times, a college student named Jake Freeman and his uncle, Dr Scott Freeman, had built an activist stake in Mind Medicine. On 11 August, they wrote to the company’s board on how to improve its business.

The Freemans posted their letter on Reddit. They held a 5.6% stake in the company, the letter claimed.

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The letter proposed the appointment of Dr Scott Freeman to the MindMed board of directors. It claimed Dr Freeman as a co-founder and former chief medical officer of MindMed.

The six-page “MindMed value enhancement plan” called on the company to focus on deploying capital to the development of its key drugs while cutting non-essential research and development.

“In our view, MindMed’s expansive side projects have come at the cost of cash and decreased focus on MindMed’s core drugs. Our plan centers around the deployment of cash to accelerate the development of MM-120 and MM-110 while drastically reducing current cash burn,” said Scott Freeman, Jake Freeman and Chad Boulanger in the letter.

The plan also proposed job cuts of 11 out of 22 full-time employees and reducing cash compensation for company executives by 50%.

“By following this plan, we believe that MindMed could significantly reduce the development time of MM-120 (LSD) and MM-110 (18-MC) and have a marketable drug within four years while reducing cash-burn by approximately fifty percent,” the letter continued.

As of the time of writing (26 August), the Mind Medicine board has not directly addressed the letter.

The company said in its second quarter earnings report published on 11 August 2022 that it “intends to prioritize and focus its current development efforts and resources on MM-120 in psychiatric indications”.

Latest earnings and reverse stock split news

Mind Medicine reported a quarterly net and comprehensive loss of $17.1m, compared to $44.5m a year ago, in its June quarter earnings report published on 11 August.

As of 30 June 2022, the company’s cash and cash equivalents came in at $105.7m, compared to the $133.5m reported on 31 December 2021.

In other news, the company announced on 25 August first patient tests in its Phase 2B dose-optimisation trial of MM-120 for the treatment of generalised anxiety disorder.

On 4 August, Mind Medicine announced that its board had approved a 1-for-15 ratio reverse share split of its common shares.

A reverse stock split is when a number of existing shares are consolidated into fewer, higher-priced shares. 

Corporate actions like stock splits and reverse stock splits do not directly affect a company’s market capitalisation. These actions only increase or reduce the number of existing shares in a company. Their combined value remains unchanged.

“The reverse share split is intended to enable the Company to achieve several important corporate objectives, give the Company greater flexibility in considering and planning for future potential business needs, and to address the Nasdaq minimum bid price requirement,” Mind Medicine said in a press release.

The reverse stock split is subject to regulatory approval and is expected to take effect after market close on 26 August. The MNMD share price fell 12.5% on 5 August 2022, a day after the reverse stock split announcement.

Mind Medicine stock forecast: Analysts’ views

Data compiled by MarketBeat, as of 26 August, showed that all four analysts covering Mind Medicine rated the stock a ‘buy’. Oppenheimer initiated its coverage of Mind Medicine on 25 August with an ‘outperform’ rating.

HC Wainwright lowered the price target in its MNMD stock forecast from $10 to $5 on 16 August.

Cantor Fitzgerald initiated coverage of Mind Medicine in early August with an ‘overweight’ rating. Its Mind Medicine stock forecast for 2022 gave the stock a price target of $3.

Roth Capital and Maxim Group gave MNMD stock forecasts of $7 and $6, respectively, in their Mind Medicine stock predictions.

Elsewhere, an algorithmic-based Mind Medicine share price forecast from Wallet Investor saw the stock closing 2022 at $0.79, as of 26 August. The site’s Mind Medicine stock forecast for 2025 saw the stock falling to $0.000001.

Note that analysts' Mind Medicine stock forecasts can be wrong. Predictions shouldn’t be used as a substitute for your own research. 

Always conduct your own due diligence. Remember that your decision to trade or invest should depend on your risk tolerance, expertise in the market, portfolio size and goals. And never trade money that you cannot afford to lose.

FAQs

Is Mind Medicine a good stock to buy?

Cantor Fitzgerald initiated coverage of Mind Medicine in early August with an ‘overweight’ rating and a price target of $3.

Note that analysts’ stock ratings can be wrong. Always conduct your own due diligence. Remember that your decision to trade or invest should depend on your risk tolerance, expertise in the market, portfolio size and goals. And never trade money that you cannot afford to lose.

Will Mind Medicine stock go up ?

An algorithmic-based Mind Medicine share price forecast from Wallet Investor saw the stock closing 2022 at $0.79, as of 26 August. Note that Mind Medicine stock predictions can be wrong.

Should I invest in Mind Medicine stock?

Mind Medicine, also known as MindMed, is a clinical stage biopharmaceutical company that develops psychedelic medicines and therapies to treat brain health disorders. 

Whether you should invest in Mind Medicine stock should depend on your risk tolerance, portfolio goals and timeframe and experience in equity markets. Always conduct your own due diligence before investing. And never trade money that you cannot afford to lose.

 

Markets in this article

MNMD
Mind Medicine (MindMed)
7.95 USD
-0.3 -3.660%

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