MindMed And FCM Holdings' Dispute Over Clinical Path Forward Deepens

The proxy battle over MindMed’s MNMD control has now evolved to each side requesting their position on what is best for the company's future to be validated by independent sources, vis-a-vis the upcoming management elections this June 15.

MindMed recently published a report by former FDA officials consulting firm Greenleaf Health, as well as a presentation directed to the company’s investors, with CEO Robert Barrow stating MindMed is “at a pivotal inflection point” approaching the first clinical trial readouts and “well-positioned” to both address multiple areas of unmet medical needs and generate shareholder value. 

In reply to that report and to the company’s proposed plan as a whole, shareholder group FCM MM Holdings LLC (aka the counterpart in the dispute) says MindMed has “slashed” budget allocations on its lead drug candidate to 12.7% of total spending in 2022, while executive compensation rose to $51 million and, moreover, both CEO and CMO would lack the experience to successfully bring the drug to the market.

See also: FCM Holdings Accuse MindMed Braintrust Of 'Pursuing Misguided Clinical Path for MM-120'

Specifically, FCM states the company’s Phase 2b LSD clinical trial has been delayed by “irresponsible spending behavior and mismanagement” and that, contrary to what MindMed previously said, the Greenleaf document actually supports FCM's plan to “immediately” begin a Phase 3 LSD trial.

It reportedly does so by not denying the ability of MindMed to execute FCM's plan with the FDA, by not affirming it believes the company's current path is the best way forward, and by supporting moving on to Phase 3 following preliminary evidence suggesting drug effectiveness in Phase 2.

Further, FCM says Greenleaf did not dispute the ability to use unpublished original data, owned by MindMed, to show LSD's effectiveness in Phase 2, nor FCM’s analysis of 62 approved CNS drugs in the past decade showing that none have “followed the long, expensive, and tortuous path to drug approval” MM-120 allegedly is.

Additionally, FCM sent a presentation to the advisory firm Institutional Shareholder Services (ISS) outlining the “overwhelming case for change” at MindMed and how to “efficiently bring mental health medicine to millions amid MindMed's announcements of clinical trial delays.”

The ISS will listen to presentations from both the company and FCM, and issue recommendations to their clients on the proxy matter.

FCM's and its nominees beneficially own, control or exercise direction over an aggregate of 1,009,181 common shares of MindMed. FCM may be deemed to control an additional 359,357 Shares pursuant to a proxy coordination agreement.

Photo: Benzinga edit with photo by Pexels.