Exclusive: MindMed's Nasdaq Listing Enables Institutions Diversified Access To A New Age Of Medicine
In light of the momentous occasion, Benzinga spoke with MindMed co-founder and CEO J.R. Rahn, as well as board member Kevin O’Leary, author, investor, "Shark Tank" star and co-founder of O'Shares ETFs.
What To Know: Mental health doesn’t discriminate. That’s become apparent given the pandemic which devastated the economy and left millions unemployed. With traditional mental health care infrastructures in the U.S. being outdated, demand for new, alternative solutions — those without acute adverse effects such as abuse and dependence — has picked up.
MindMed, which is focused on the medicinal value of psychedelics, is believed to have the answer by many, including Kevin O’Leary who backed the company in its early stages.
“I’ve been involved with the company for almost three years,” O’Leary explained. “When I first heard of this idea from J.R., I thought he was nuts. But, he convinced me and he has been 100% right in every milestone of the journey.”
Dubbed the "Tesla of mental health," MindMed, through proprietary research, some of which was conducted in collaboration with the laboratory of Professor Dr. Matthias Liechti, the world’s leading psychedelics, pharmacology and clinical research group at University Hospital Basel, in Switzerland, has helped destigmatize and deploy psychedelics solutions.
In a move to bolster innovation and allow investors a chance to participate in the new age of medicine, MindMed listed on the Nasdaq, a brand that’s supported firms like Apple Inc (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT), at their earliest stages.
“It was definitely a long process to get here,” Rahn noted. “Because of the high listing standard, Nasdaq is a great place to interact with institutional investors and ultimately enable us to allocate capital to these unmet medical needs in mental health.”
What Does It Mean: At the outset, Rahn had difficulty conveying the prospects of medicinal psychedelics — an asset class of its own — to venture capitalists.
“They couldn’t see past the fact that these were psychedelics, even though there was so much promise in the underlying academic and scientific data.”
Fast forward a few years, MindMed, in partnership with leading research entities, is building a sustainable infrastructure to develop and deploy FDA-approved psychedelics.
In the last year, the company began the first-ever clinical trial on MDMA and LSD combinations, launched Albert — a division to research and develop an integrated platform for delivering psychedelic medicines, experiential therapies, as well as digital therapeutics — and acquired HealthMode, a digital medicine, and therapeutics startup.
“We continue to progress our project Lucy,” Rahn noted in reference to the company’s experiments with LSD therapy for anxiety disorders. “We also continue looking at programs and trials that we have in the academic realm, with our various collaborations with the University Hospital Basel, and what we can take from that data, both on the MDMA and LSD space, and translate that into commercial drug trials.”
Initial Reaction: The response has been overwhelmingly positive.
Investors, cognizant that MindMed has created a new paradigm in how mental health is treated, are creating pages like MindMed Investors Club on Reddit, to dissect and support the company’s achievements in a public forum. MindMed even caught the attention of the famed WallStreetBets Reddit forum, a group of investors looking to capitalize on opportunities with high potential for reward.
“There is a very passionate shareholder base that is looking for returns but also wants to change mental health,” Rahn added. “This is really the advent of conscious capital.”
Now that the company is listed on the Nasdaq exchange, institutional investors will be more inclined to allocate sufficient capital to the nascent, so-called junior pharma space.
“When you want to be validated by institutional clients and sovereign funds, which spend a lot of time researching sectors they want exposure to, Nasdaq is the place,” O’Leary said. “It’s an unwritten rule.”
Why It Matters: Aside from validation, diversification is a key barrier to investing for smart-money investors and institutions.
Institutional investors, especially in junior pharma, are looking to mitigate risk and weight according to diversity across a few key metrics, according to O’Leary.
“Every time a new [company] comes to market, I ask myself how many molecules, how many trials, what’s the diversification in terms of what molecule they’re testing, and what mandate they’re pursuing,” he said, speculating that MindMed could achieve a superior market cap because of its diversification across those metrics.
“MindMed has so many clinical trials — 17 plus,” O’Leary explained. “Most other companies have very few trials; they’re betting the farm on one or two molecules, and that’s much riskier.”
Innovation Outlook: Thus far, O’Leary says Rahn, who practically founded the sector, has been right about the geometric growth, state-by-state legalization of psychedelics for medicinal purposes, and acceptance by the public.
Going forward, though, MindMed is looking to accelerate progress across its clinical trials, as well as expand its pipeline with additional trials and platforms to deliver medicines.
“There’s a drug development side and then there’s a technology platform side,” Rahn said. “We need to coalesce both into building MindMed into a leader in mental health.”
MindMed is now trading on the Nasdaq and is accessible across all brokerages with access to U.S. markets.
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