After psychedelic drug company Mind Medicine (Nasdaq: MNMD) released a detailed letter to shareholders pushing back against an attempted board coup by a company called FCM MM Holdings, FCM responded with its own letter to shareholders accusing the current board of botching the company’s strategy as well as other misdeeds.
FCM MM Holdings and its affiliates beneficially own 1,368,538 common shares of MindMed Inc., representing approximately 3.5% of the outstanding common shares.
MindMed released its letter alongside its earnings earlier this week.
FCM’s letter notes that MindMed’s stock valuation has plunged 95%, while the executive team awarded itself with lavish compensation. It’s worth noting that the PSYK ETF is down 22% for the past year and the Horizons Psychedelic Stock ETF is down 42% for the past year.
FCM says that the board only spent 12.7% of its funds on operating costs for the company’s drugs and 31.8% on compensation. It also accuses the board of only owning 0.22% of the company’s shares, which it claims to be smaller than most boards’ average.
The FCM letter suggests that its suggested board members would cut unnecessary expenses and save the company $4.5 million. It also wants to proceed with a Phase 3 study of MM-120. The group believes that the company is pursuing a Phase 2b dose finding study that is flawed and unnecessary. The current MindMed board stated it can’t proceed to the Phase 3 study without completing this Phase 2b study.
The letter also claims that the current board doesn’t have experience with the FDA process, which the current board has accused the FCM team of as well.
The FCM team did disclose it has met with the current MindMed team but hasn’t gotten the response it had hoped for.
“Since 2021, we have attempted to engage constructively with the Board on our ideas for adding value for the benefit of all MindMed shareholders, including our Value Enhancement Plan that we presented to the Board and management in August 2022,” the letter read. “We remain dumbstruck by the Board’s lack of urgency in addressing the critical issues we raised with them. Unfortunately, we had to take the extraordinary step of nominating four highly qualified director candidates because FCM determined that the only way to put MindMed back on track and stop the destruction of further shareholder value would be to reconstitute the Board and take immediate action for the benefit of all shareholders.”