MindMed Addresses Board Coup, Says It Has Two-Year Cash Runway

The company asked its shareholders to reject a slate of directors offered up by FCM MM Holdings.

Mind Medicine (MindMed) Inc. (Nasdaq: MNMD) (NEO: MMED) reported a net loss of $24.8 million for the first quarter ended March 31, compared with $18.5 million for the same period in 2022.

The company does not have revenue to report at this time.

Cash Levels

As of March 31, MindMed had cash and cash equivalents totaling $129.4 million, compared with $142.1 million at the end of December 2022. The company said it believes it has enough cash to fund its operating requirements into the first half of 2025.

The net cash used in operating activities was $13.3 million for the quarter, versus $12.9 million in the quarter that ended March 31, 2022.

“2023 is a critical year for MindMed, and we are well positioned to continue advancing our R&D pipeline toward multiple near-term milestones later this year,” said Robert Barrow, CEO and director of MindMed. “These include key data from our Phase 2b study of MM-120 for the treatment of generalized anxiety disorder, as well as from our Phase 2a proof-of-concept trial of repeated low-dose MM-120 in attention-deficit/hyperactivity disorder.”

The company also has a Phase 2a study evaluating MM-120 for attention deficit hyperactivity disorder that remains on track for late 2023 topline readout.

The company is developing MM-402, its proprietary form of MDMA for the treatment of core symptoms of autism spectrum disorder. The first clinical trial is expected this year.

Board Coup

MindMed also issued a letter to shareholders asking that they not vote for a slate of four director candidated offered up by FCM MM Holdings, an entity affiliated with Jake Freeman, Scott Freeman, and Chad Boulanger. Current management believes the group is unqualified to serve on the board.

“FCM is waging a proxy contest to take control of the company despite only owning a small percentage of our outstanding shares and failing to provide any realistic strategic plan for MindMed,” the letter read. “We believe that allowing FCM to harm the company’s current strategy and management team – who have been successfully executing our plan under your Board’s oversight – would put your investment at risk.”

The letter went on to say that management has met with the Freemans and Boulanger numerous times since August 2022 to evaluate FCM’s perspectives on the company and its strategic direction.

“In these discussions, it became abundantly clear that FCM does not understand MindMed’s business – which has significantly evolved since Scott Freeman left the company in 2020 – or the associated regulatory processes.”

The letter goes on to call out “ideas FCM floated in its August 2022 ‘Value Enhancement Plan'” as damaging to shareholder value.

“These proposals reflect a pronounced misunderstanding of FDA drug approval processes, an ignorance of the capital allocation and financing needs of a company at MindMed’s growth stage, and a disregard for what is in the best interests of all shareholders.”

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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