On Wednesday, Baird reaffirmed its positive stance on MindMed (NASDAQ:MNMD), maintaining an Outperform rating and a $27.00 price target for the company's stock. The endorsement follows the scrutiny MindMed's shares faced during the FDA Advisory Committee meeting, which reviewed a competing drug, Lykos's MDMA, intended for PTSD treatment.
The analyst from Baird noted that while MindMed's leading candidate, MM120, shares psychedelic properties with MDMA, there are key differences in their development programs. MM120, aimed at treating generalized anxiety disorder, may have advantages in the regulatory process. The FDA had requested additional data from Lykos on adverse events (AEs) and the potential for abuse during its phase 3 trials. MindMed is expected to benefit from these insights.
The FDA's concerns about abuse potential did not appear to be a definitive factor in the approval process, especially given the existing literature on the abuse potential of substances like MDMA and LSD. The analyst emphasized that both MDMA and MM120 are intended to be administered in treatment centers, reducing the risk of abuse since patients would not take the substances home.
Baird's confidence in MindMed remains steady despite the recent market pressures. The firm's analysis suggests that MindMed's strategic approach to regulatory approval could help navigate the challenges highlighted by the FDA's feedback on Lykos's MDMA. MindMed's focus on MM120 for generalized anxiety disorder continues to be supported by Baird's Outperform rating and $27.00 price target.
In other recent news, MindMed, a biopharmaceutical company, recently disclosed its Q1 2024 financial results, with earnings per share (EPS) falling short of expectations. Despite this, Oppenheimer maintained its Outperform rating, expressing optimism regarding MindMed's ongoing clinical programs. Meanwhile, RBC (TSX:RY) Capital also maintained its Outperform rating, suggesting that MindMed's program is likely to be more robust and cleaner, offering a stark contrast to the recent AdComm.
In addition, Baird initiated coverage on MindMed with an Outperform rating and a price target of $27.00, citing the promising results of MindMed's lead agent, MM120. This comes after the U.S. Food and Drug Administration (FDA) recently awarded Breakthrough Therapy Designation to MM120, indicating its potential for substantial improvement over available therapy.
In other company developments, MindMed has decided to voluntarily delist its common shares from Cboe Canada, citing the majority of its trading volume on Nasdaq. The company reassures investors that the transition will be smooth and shares will remain accessible to Canadian shareholders through Nasdaq.
Furthermore, MindMed has announced a significant share offering, with gross proceeds expected to reach approximately $175 million. The offering has attracted a range of new investors, including Deep Track Capital and Commodore Capital, and is anticipated to close around March 11, 2024. These are among the recent developments for MindMed.
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