'Value Enhancement Plan' Could Transform Operations at MindMed. What the Founder Says Is Ahead At The Psychedelic Biotech

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. 

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.”

Photo by Álvaro Serrano on Unsplash