FCM MM Holdings sent a letter to MindMed’s MNMD board of directors calling on them to adopt a new strategic plan to "turn the company around.”
The note begins with a provocative statement: “We have seen the value of our investments in MindMed plummet as the stock has fallen from its highs of around $5.77 to $0.70 per share,” and then goes on to express investors’ concern “about the company’s strategic direction.”
The group represented by FCM investments believes MindMed’s management has underperformed partly due to dividing its attention “among too many different projects” resulting in a lack of focus on the company’s core drugs: MM-110 (18-MC) and MM-120 (LSD).
FCM’s detailed scheme notes that it is confident in MindMed’s ability to “significantly reduce” the R&D steps for both proprietary drugs to reach the market in four years, rather than seven or eight, by re-classifying the Phase 2b study on MM-120 to a Phase 3 study.
The proposal also calls for MindMed to reduce cash burn for approximately 50%, going from $45 million per year to under $25 million. That is, according to FCM’s letter, the unnecessary and dilutive at-the-money offering should be eliminated.
The FCM fund is managed by cofounder Dr. Scott Freeman, who was MindMed’s chief medical officer in the 2019-2020 period. FCM represents an overall investment of almost 5.6% of the company’s shares outstanding.
Scott Freeman was Chief Medical Officer (CMO) of MindMed for a little over a year (Spring 2019 - Summer 2020), moving over from Savant HWP which was acquired by MindMed for its 18-MC program.— Psychedelic Alpha (@Psyched_Alpha) August 11, 2022
Here's Scott on MindMed's website back in March 2020. pic.twitter.com/o0S6btBrKE
In numbers, Dr. Freeman's investment in MindMed is claimed to be in excess of 19 million shares or 4.51% of MindMed's outstanding shares. The other signee is Chad Boulanger who holds an investment in over four million shares or equivalent 1% of outstanding shares.
The letter concludes by calling for MindMed’s reply before August 31, 2022, and proposing Dr. Freeman's incorporation onto the board of directors “to unlock the company’s full potential.”
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Meet the biggest cannabis industry players and make deals that will push the industry forward.
Featuring live company presentations, insider panels, and unmatched access to networking, the Benzinga Cannabis Capital Conference is where cannabis executives and entrepreneurs meet.
Join us September 13-14, 2022 at The Palmer House in Chicago, IL.