An innovative approach to mental illness and addiction treatment
is just one of many reasons to buy Mind Medicine stock
Mind Medicine, a leading psychedelic medicine biotech company, was recently listed on the Nasdaq stock exchange and now trades under the symbol “MNMD”.
I wrote about Mind Medicine roughly a year ago when it was revealed that Kevin O’Leary – better known as Shark Tank’s Mr. Wonderful – was one of the company’s investors. At the time, he said that “either it’s going to be an extraordinary outcome or it’s a zero“.
The recent Nasdaq listing is a positive development towards the extraordinary outcome scenario.
J.R. Rahn, the CEO and Co-Founder, said that the Nasdaq listing “will increase our visibility in the marketplace, improve liquidity, broaden and diversify our shareholder base, and ultimately enhance long-term shareholder value [It is] an important step that will help facilitate our mission to discover, develop and deploy psychedelic inspired medicines and therapies to address addiction and mental illness.”
Indeed, Mind Medicine’s visibility is increasing rapidly and the Nasdaq listing will attract more buyers.
It’s important to look beyond the hype. Does Mind Medicine have solid fundamentals?
After conducting serious research, I believe it does.
Here are 3 compelling reasons why you should buy Mind Medicine stock – if you are patient and have a high risk tolerance.
1. Mind Medicine is revolutionizing mental illness and addiction treatment
The first reason why you should buy Mind Medicine stock is because the company is revolutionizing a sector of healthcare which hasn’t seen innovations in more than 30 years.
MindMed focuses on developing psychedelic-inspired medicines that combat depression, alcoholism, and Opioid addiction.
Its corporate thesis is that the current mental illness and addiction treatments are failing:
- Anxiety: +67% increase in benzodiazepine prescriptions from 1996-2013
- Addiction: +395% in overdose deaths incolving prescription Opioids from 1999-2018
- ADHD +123% increase in ADHD prevalence and 89.1% of individuals are not receiving treatment
In order to provide an effective and modern solution, Mind Medicine is developing a new treatment paradigm.
First of all, data suggests that LSD may be a safer alternative than Benzodiazpines: a U.S. Department of Health and Human Services study that show that LSD accounts for just 0.34% of ER visits involving illicit drugs.
Secondly, anecdotal evidence suggests that ‘microdosing’, the act of taking very small amounts of psychedelic drugs such as LSD and Magic Mushrooms, can improve focus and productivity. Microdosing is a very popular trend in the Silicon Valley, where techies and engineers use it to boost their performances. While the hard science hasn’t yet proved its efficiency, there is plenty of anecdotal evidence supporting its beneficial effects.
Third, if Mind Medicine’s corporate thesis is proven right, the payoff could be massive. Indeed, the potential market for these products is huge. MindMed’s Investor Presentation claims that global mental health costs are expected to total $16 trillion through 2030.
In the USA alone, there are currently 40 million American adults affected by anxiety, 20 million with substance abuse disorders, 17 million dealing with major depression and 10 million using stimulant prescription medicine to combat ADHD. MindMed is targeting legacy markets with nearly $30 billion in yearly sales. By 2024, the U.S. psychedelic medicine market alone will generate close to $1.3 billion in revenue.
The market for Mind Medicine’s products is there, the question is will the company succeed in bringing its products to market?
2. The company is close to commercializing its main offerings
The second reason why you should buy Mind Medicine stock is because it’s developing a promising pipeline of innovative drugs.
If everything goes to plan, they could become the next generation of anti-addiction, anxiety, ADHD and depression treatments.
While the company’s corporate thesis is appealing, its success depends entirely on receiving FDA approval and commercializing its drugs.
In this regard, it is making encouraging progress:
- Project Lucy, the company’s flagship aniety treatment, is close to entering Phase 2B.
- 18-MC, used to fight substance abuse, is close to entering Phase 2A
- LSD Microdosing, an adult ADHD treatment, is also close to entering Phase 2A
- Its projects in collaboration with the University Hospital Basel are also in advanced stages and will soon enter Phase 2B.
If these clinical trials are successful, Mind Medicine will start commercializing its major offerings within a couple of years. The encouraging takeaway is that several drugs have a chance of receiving FDA approval at roughly the same time – or in short intervals – which will bring in substantial revenues virtually all at once.
Patient investors with a high risk tolerance should consider getting in early before the FDA approves the drugs.
3. Mind Medicine boasts an impressive list of backers
I wrote about Mind Medicine roughly a year ago when it was revealed that Kevin O’Leary was an early investor.
However, I recently discovered he’s not the only influential business mind backing the company.
The following financial heavyweights are also backing Mind Medicine’s commercial and research endeavors:
- Steven Cohen, the hedge fund billionaire who cofounded Tao Capital
- Joby Ptizker, an heir to the Hyatt Hotel fortune
- Bob Parsons, the billionaire founder of GoDaddy and PXG, a golf equipment manufacturer
- Blake Mycoskies, founder of Toms Shoes
- Michael Novogratz, CEO of Galaxy Investment Partners
Successful businessmen invest in startups for one reason only: to make money.
Seeing so many elite investors on the list of backers means this company has been properly vetted and has a reasonable chance of success.
This gives Mind medicine plenty of credibility going forward.
At present, Mind Medicine is still a high-risk, high-reward speculative gamble.
If the FDA refuses to approve Project Lucy, commercialization will be set back and the market will react negatively.
However, if the FDA approves the main projects, Mind Medicine start selling products and the stock will soar.
At current prices, the risk-reward ration is very appealing.
However, only invest if you have a long term view and a high risk tolerance.
Disclaimer: This article was is the fruit of my personal research and should not be considered as professional investment advice. Please conduct your own research and analysis before investing in any financial asset.