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Up 163% YTD, Is It Too Late to Buy MindMed Stock?
Valued at $645 million by market cap, Mind Medicine (MNMD), also known as MindMed, is a clinical-stage biopharma company developing novel product candidates to treat brain health disorders. Shares of the company went public in March 2020, and touched a record high 12 months later. Today, MindMed stock trades 88% below its all-time highs - but MNMD has more than doubled its market value in 2024, up 163.9% on a year-to-date basis.
Let’s see if you should hold Mind Medicine stock in your equity portfolio right now.
An Overview of Mind Medicine
Mind Medicine aims to be the global leader in the development and delivery of treatments that unlock new opportunities to improve patient outcomes. It is developing a pipeline of drug candidates targeting serotonin, dopamine, and acetylcholine systems.
In December 2023, Mind Medicine announced positive top-line results from its Phase 2b clinical trial of MM-120 in generalized anxiety disorder. The trial demonstrated dose-dependent improvements on the Hamilton Anxiety rating scale compared to placebo at Week 4. The drug was administered as a single dose in a clinical setting with no additional therapeutic intervention.
MM-120 is Key for MindMed
Mind Medicine is excited by the positive results for MM-120, given that it’s the first study to assess the drug's effects in the absence of any psychotherapeutic intervention. These findings are a significant step forward in Mind Medicine’s goal of bringing a revolutionary treatment to millions of patients with general anxiety disorders.
GAD is a common condition that adversely impacts millions of people globally. According to Daniel Karlin, MD, MA, Chief Medical Officer of MindMed, “Few new treatment options have shown robust activity in GAD since the last new drug approval in 2004, making the strong, rapid, and durable clinical activity of a single dose of MM-120 observed in the trial particularly notable.”
The results were sufficient to score breakthrough therapy designation for MM-120 from the Food and Drug Administration (FDA), which means MM-120 will get fast-tracked by the regulatory body on its way to potential approval. Phase 3 trials are expected to begin during the second half of this year, and could likely be the key catalyst behind the next major price swings in MNMD stock.
How Mind Medicine is Funding MM-120
Mind Medicine ended 2023 with a cash balance of $99.7 million, compared to $142 million in the year-ago period. It has enough cash as well as a committed credit facility to fund operations into 2026.
In 2023, the company used $64.4 million to fund operations, higher than the $50.1 million used in the year-ago period. The company’s research and development expenses also rose from $36.3 million to $52.1 million in this period, primarily due to an increase of $16.1 million in expenses related to the clinical research and development for the MM-120 GAD Phase 2b clinical trial and $2.6 million in internal personnel costs. MNMD's net loss totaled $95.7 million in 2023, wider from the $56.8 million in the year-ago period.
Earlier this month, Mind Medicine disclosed the pricing of an underwritten offering of 16.67 million common shares at an offer price of $6. It also entered into share purchase agreements for 12.5 million common shares at a price of $6, allowing it to raise $175 million and shoring up its liquidity.
What is the Target Price for MNMD Stock?
Out of the seven analysts tracking MNMD stock, six recommend “strong buy,” and one recommends “moderate buy.” The average target price for MNMD stock is $29.83, indicating an upside potential of over 205% from current levels.
The Takeaway on MNMD Stock
Similar to other clinical-stage biopharma companies, investing in Mind Medicine stock carries significant risks. However, the stock may generate exponential gains in the upcoming decade if the company’s portfolio of medical products is successful in treating brain health disorders.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
