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MindMed Inc. (Nasdaq: MNMD) is a biotechnology that should be on everyone’s watch list. The reason I mention this is because they have been able to make significant improvements in MDMA Treatment space against certain types of disorders.
In a precedent Seeking alpha matter Worthy “Brain Medicine: GAD Program Continues Success with BTD and Positive Treatment Data,“I noticed that the company has already achieved positive results from the Phase 2b study of MMED008 using MM-120 to treat patients with generalized anxiety disorder (GAD). The triggers for that are quickly approaching, but I thought it was so important that I would be reviewing this company Again, due to a problem that occurred in the MDMA field.
I’m talking about the fact that a competitor in the space known as Lykos Therapeutics, which developed MDMA to treat patients with post-traumatic stress disorder (PTSD), has received FDA advisory committee approval. Refusal of medication. For starters, the FDA could still decide to approve the drug anyway in August 2024. Second, the scrutiny comes because the data wasn’t clear-cut. I think MindMed’s data represents a clearer cutoff and targets populations that haven’t seen another GAD drug approved since 2007. This may make the FDA a bit more lenient when it comes to reviewing this drug.
Finally, it has a backup filter being developed in the pipeline known as the MM-402. What makes this drug unique is that it still has the same premise as MDMA, but was developed to be completely different with a superior safety profile, less stimulation and strong positive social effects. With all of these different factors, I think that even if the FDA ends up being strict about Lykos Therapeutics’ US marketing approval, MindMed has elements in place to be very different. This is why I believe that despite the recent regulatory activities in the MDMA space, it is still a good option to buy.
Lykos Therapeutics’ regulatory update is a dilemma, but MindMed may be a completely different case
As I mentioned above, MindMed is developing the use of MM-120 to treat patients with generalized anxiety disorder (GAD). It was revealed in the phase 2b study of MMED008 that the primary endpoint of HAM-A score improvement over a 4-week period was met in a significantly dose-dependent manner. Global market for generalized anxiety disorder treatment It is expected to reach $4.26 billion by 2033. I also discussed this in my previous article “Seeking Alpha” titled above as well, and that there are several catalysts that investors can look forward to. For example, a phase 3 study using MM-120 to treat patients with generalized anxiety disorder is on track to start in the second half of 2024.
As you can see, MindMed is on the right track when it comes to developing this program. The main issue with MDMA agonist drugs is Lykos Therapeutics’ recent regulatory developments. Briefing documents first published by the FDA appeared to be favorable. He pointed out that there are some questions that the agency will ask the advisory committee. Not only that, I think it’s important to highlight that the FDA has been lenient in the past with psychedelics. Consider that Spravato of Johnson & Johnson (GNG), which It is approved by the Food and Drug Administration To target patients with treatment-resistant depression (TRD), it carries a warning label. The bottom line is that this medicine is only obtained through a restricted type of distribution system, under a risk evaluation and mitigation strategy (REMS). Therefore, patients can only receive this treatment at a doctor’s office or at a designated clinic. Therefore, as a worst-case scenario according to Lykos Therapeutics with its Midomafetamine (MDMA) capsules, it may still be able to gain FDA approval with a REMS in place. Although the PDAC panel overwhelmingly rejected the drug, that doesn’t mean the FDA has to follow its guidelines. If you believe the PTSD community needs such a medication, it could go against the recommendations of the PDAC.
The chances of Lykos Therapeutics getting FDA approval for Midomafetamine (MDMA) capsules look bad, but there is still a chance it will be approved by the US agency. One question as part of PDAC, Which was rejected by a majority of 2 yes votes and 9 no votes. Would it have been so if the available data showed that this drug was effective in patients with PTSD? Keep in mind that this may be the fact that the study design was not sufficient to prove that this drug works in this specific group of patients. Therefore, this may not be the case with MindMed MM-120 for generalized anxiety disorder.
The other thing about GAD is that there have been no new treatment options since 2007. It is very likely that the FDA will be more lenient for this indication, compared to PTSD. What could change the market’s opinion regarding MDMA drugs to treat neurological disorders is if the FDA eventually approves Lycos for the treatment of PTSD. Such a decision is expected to be issued on or before August 11, 2024.
MM-402 could be a huge comeback story if it works
MDMA drugs now being developed have safety issues, hence the PDAC’s reluctance. However, Midomafetamine (MDMA) capsules were shown to meet the primary endpoint of both studies. There is a back-up candidate for MindMed, which is another drug called MM-402.
Why is this another drug that investors should watch closely? This is because this particular drug has the potential to overcome the problems associated with first-generation MDMA drugs. MM-402 is being developed to treat patients with autism spectrum disorder (ASD) in a phase 1 study. The classification of this drug is that it still has the same mechanism of action (MOA) as MDMA, but with a lower potential for side effects. If safety differentiation can be adequately demonstrated in treatment data, this could keep MindMed alive in the biotech space, if MDMA continues to become an issue in terms of FDA approvals. The bottom line is that this other drug is R(-)- MDMA type, which means that it still provides positive social effects (for improved efficacy), but at the same time has a superior safety profile compared to other MDM A drug types. Other advantages are a standardized dosing regimen and also less stimulation (improved safety profile for patients). The final item to consider is that there are many types of drugs being explored beyond R(-)-MDMA. The other two MDMA drugs being evaluated in the phase 1 trial initiated by UHB investigators are S(+)-MDMA and R/S-MDMA. The goal is to look at tolerability and pharmacokinetics, but also evaluate the physiological and endocrine effects of all three of these drugs as well. However, data from this phase 1 study is expected to be released any day now in the second quarter of 2024.
Financial Mind Medicine
According to the 10-Q SEC FilingMindMed had cash and equivalents of $252.3 million as of March 31, 2024. The reason it had cash on hand was because it was able to complete multiple financial transactions. One such transaction would be to use an ATM, which was established on May 4, 2022 with an S-3 filing shelf registration statement. As of March 7, 2024, it had raised an aggregate amount of $40.9 million under this ATM agreement, however, on the same day it terminated the remaining portion of this transaction. Two other financial transactions occurred on March 7, 2024, namely a public offering and a private placement agreement. Each of these transactions raised $93.5 million and $70.1 million, respectively.
MindMed believes it has enough cash on hand to purchase Cash runway To finance its operations until 2026. It has Burn cash $22.2 million in cash per quarter.
Risks to the business
There are several risks that investors should be aware of before investing in MindMed. The first risk to consider is the development of MM-120 to treat patients with generalized anxiety disorder. Although the primary endpoint was achieved with statistical significance in the Phase 2b study of MMED008 in these patients, there is no guarantee that a similar or superior outcome will be achieved in the soon-to-begin Phase 3 trial.
The second risk to consider is the development of MM-402 to treat patients with autism spectrum disorder. The first phase of the trial initiated by the researchers is still ongoing using this drug to treat this group of patients, and there is no guarantee that the results will be positive. The goal is to use R(-)-MDMA to achieve similar positive social effects as current MDMA drugs, but with a greatly improved safety profile. There is no way to know whether this drug and other next-generation MDMA drugs will be able to achieve similar or superior effectiveness compared to first-generation drugs.
The third and final risk to consider relates to the development of MDMA drugs themselves. Especially since Lykos Therapeutics did not vote favorably on PDAC regarding the two questions that were asked. This is a risk because an FDA rejection on or before August 11, 2024 could cause trading in MindMed’s stock to decline significantly. Combined with the fact that this may be another negative stigma that MDMA drug developers will have to face in the coming years. However, I believe the differentiators that MindMed has with its drug targeting greater unmet medical needs may allow for more leniency. Additionally, it is entirely possible that management could do a better job of explaining the data they obtained through their study using the MM-120 for GAD. Finally, MindMed doesn’t rely solely on this drug as a form of MDMA. It is also developing next-generation variants, the three mentioned above in a phase 1 trial initiated by the researchers, with R(-)-MDMA being the most prevalent.
Conclusion
MindMed remains an investor-friendly biotech company to keep an eye on, despite the setback Lykos Therapeutics just faced with its Midomafetamine (MDMA) capsule for treating patients with post-traumatic stress disorder. Especially since the FDA still has a very positive view on a lot of these MDMA companies. Many MDMA drugs have received Breakthrough Therapy Designation (BTD) for several disorders.
I believe MindMed still has an opportunity to move the industry forward in the pursuit of GAD, which has not seen a new drug option in a few decades. In a worst-case scenario, many of these companies may have to go through REMS to get approval, like J&J’s Spravato. Even beyond that, other types of MDMA drugs still provide the same function as MM-120, but offer a superior safety profile. It is entirely possible that the MDMA space will be successful, and some tweaks and changes in chemistry may have to be made to eventually gain regulatory approvals.
Editor’s Note: This article discusses one or more securities that are not traded on a major U.S. exchange. Please be aware of the risks associated with these stocks.
