Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) Q1 2023 Earnings Call Transcript

Mind Medicine (MindMed) Inc. (NASDAQ:MNMD) Q1 2023 Earnings Call Transcript May 5, 2023

Operator: Good afternoon, and welcome to the Mind Medicine First Quarter 2023 Financial Results and Corporate Update Conference call. Currently, all participants are in listen-only mode. This call is being webcast live on the Investors and Media section of MindMed’s website at mindmed.co and a recording will be available after the call. For opening remarks, I would like to introduce Rob Barrow, CEO of MindMed. Please go ahead.

Rob Barrow: Thank you and good afternoon, everyone. Welcome to our first quarter 2023 financial results and corporate update conference call. The press release reporting our financial results is available in the Investors and Media section of MindMed’s website and our quarterly report on Form 10-Q for the quarter ended March 31, 2023, will be filed today with the Securities and Exchange Commission. Joining me today is Schond Greenway, our Chief Financial Officer; Dr. Dan Karlin, our Chief Medical Officer; and Dr. Miri Halperin Wernli, our Executive President. During today’s call, we’ll be making certain forward-looking statements including without limitation, statements about the potential safety, efficacy and regulatory and clinical progress of our product candidates, financial projections and our future expectations, plans, partnerships and prospects.

These statements are subject to various risks such as changes in market conditions, difficulties associated with research and development and regulatory approval processes that are described in the filings made with the SEC, including the most recent annual report on Form 10-K and quarterly report on Form 10-Q. Forward-looking statements are based on the assumptions, opinions, and estimates of management at the date the statements are made, including the non-occurrence of the risks and uncertainties that are described in the filings made with the SEC or other significant events occurring outside of MindMed’s normal course of business. You are caution not to place undue reliance on these forward-looking statements which are made as of today, May 4, 2023.

MindMed disclaims any obligation to update such statements, even if management’s views change, except as required by law. I would like to begin by reiterating our deep commitment to advancing our organization and delivering new life-changing treatment options to the many individuals living with brain health disorders. As we pursue our strategy to bring our lead product candidates to market, we believe we are laying the foundation to create lasting value for our shareholders. In the first few months of 2023, we continue to make steady progress across our pipeline and we are well positioned to execute on our key priorities and reach multiple milestones throughout this year, including data readouts from our Phase 2b trial of MM-120 for the treatment of generalized anxiety disorder or GAD, as well as from our Phase 2a proof-of-concept trial of repeated low dose MM-120 and attention-deficit hyperactivity disorder or ADHD.

Additionally, we expect to initiate the first clinical trial of MM-402 later in the year. Before we dive further into our R&D and financial updates, I would like to highlight the recently presented positive top line data from the Phase 2 double-blind investigator-initiated trial, evaluating lysergide in the treatment of major depressive disorder or MDD. This trial was led by Prof. Matthias Liechti and Dr. Felix Mueller, our collaborators at University Hospital Basel or UHB and the University Hospital of Psychiatry in Switzerland. As a reminder, we have exclusive global rights to data compounds and patents associated with the Liechti Labs research, evaluating lysergide and other psychedelic compounds. This includes data from numerous completed and ongoing investigator-initiated trials in both healthy volunteers and patient populations.

Our collaboration has been particularly impactful by demonstrating and reinforcing the clinical potential of our drug development pipeline. Top line data from this investigator-initiated trial demonstrated significant rapid, durable and beneficial effects of lysergide and its potential to mitigate symptoms of MDD. Patients in this study received a 100 microgram dose of lysergide on the first dosing day and the 200 microgram dose of lysergide on the second dosing day, which was separated by four weeks. An active small dose of 25 micrograms lysergide was used as a control arm. The trial’s primary endpoint at six weeks, which was measured by the change in clinician rated Inventory of Depressive Symptomatology or IDS-C scores. Further, the statistically significant was maintained up to 16 weeks, which underscore the potential long-term benefits of lysergide treatment.

Data from the secondary endpoint were also encouragingly and the investigational drug was similarly well tolerated. Given the high degree of comorbidity of MDD and GAD, the positive results in clinical activity of lysergide are particularly relevant to our MM-120 program. I’m now trying to updates on our R&D program, starting with our lead program, MM-120, a proprietary pharmaceutically optimized form of lysergide D-tartrate and development for the treatment of GAD and ADHD. GAD is an often debilitating mental health disorder associated with excessive anxiety and persistent worry, which can lead to significant impairment in social, occupational and other functioning. With very little innovation focus on the treatment of GAD, there’s been a noted increase in the incidence and prevalence of individuals diagnosed with GAD in the U.S. and Europe over the past several years.

Additionally, the number of patients who are not adequately treated by available therapies is also increasing. This is a result of the low rate of remission and multiple safety and tolerability challenges of SSRIs, SNRIs, antipsychotics, and benzodiazepines. The research we’ve conducted with patients and healthcare practitioners in the U.S. and Europe tells us that there’s a significant demand for a new pharmacological class that could offer faster, more profound and more durable efficacy responses as well as favorable safety and tolerability. This is particularly true in the segment of patients who, despite having exhausted all available options, continue to experience intolerable anxiety. Given the need for new treatment options, we are extremely encouraged by the growing data that supports the therapeutic potential of MM-120, patient dosing and enrollment for our Phase 2b trial in GAD is progressing well across our 20 active sites and we reiterate our expectation of reporting top line results in late 2023.

The trial plans to enroll a total of 200 participants who will receive a single administration of up to 200 micrograms of MM-120 or placebo. The primary objective of the study to determine the reduction in anxiety symptoms for up to 12 weeks after the first administration of MM-120 across five treatment arms were the primary endpoint measured at four weeks post-dosing. The results of this trial will guide dose selection development strategy for MM-120 in GAD as well as deepen our scientific understanding of its clinical effects, its underlying functional mechanisms of action. As mentioned, we are also evaluating MM-120 for ADHD and expect to report top line data for our Phase 2a trial in late 2023. Our Phase 2a trial is being conducted in collaboration with the University Hospital Basel in Switzerland and Maastricht University in the Netherlands, and is designed to evaluate the therapeutic utility of repeated low doses of MM-120 in adult patients with ADHD.

Notably, this is the first study in which MM-120 has been administered outside of the clinical setting. To-date, no SAEs have been reported suggesting the real-world potential of this treatment regimen, as well as demonstrating our ability to deliver MM-120 with innovative dose and frequency combinations. In this trial, we expect to enroll a total of 52 participants who will receive a 20 microgram dose of MM-120 or placebo twice weekly for six weeks. The primary endpoint to the study are mean change from baseline and ADHD symptoms and assessed by the AISRS after six weeks of treatment. This proof of concept trial is a component of our broader comprehensive MM-120 clinical development strategy, which seeks to explore both session-based administration that harnesses perceptual effects of serotonin agonism, an innovative repeat administration regimen that harness the neuropharmacological effects of recurrence serotonin agonism.

The innovation of MM-120 and its session-based delivery approach is driven by its mechanism of action as a potent serotonin receptor agonist, which leads to profound sustained psychological effects. We believe MM-120 will be delivered as a single dose pharmacological interventions that will only require occasional administration. We recognize the potential challenges in commercializing a product with such a revolutionary delivery profile and has embarked on a robust pre-commercialization plan seeking to educate all external stakeholders of the clinical and economic value of MM-120. This is why one of the key priorities we are advancing in 2023 is to develop an innovative market access strategy, document the clinical and socioeconomic burden of GAD and ADHD and advance the generation of health economics and outcomes research data required to build a superior value proposition for our product candidates.

As we’ve progressed our pipeline, we look forward to providing greater clarity on the commercial model and path forward for each program to maximize the reach of our novel product candidates. As a reminder, with respect to our intellectual property strategy, our patent portfolio includes 26 pending U.S. applications and 12 pending PCT applications. These include applications covering compositions, dosing, dosage formulations, and methods of treatment among others with projected expiration dates beginning in 2041. Additionally, we continue to retain all rights to our product candidates and are aggressively protecting and expanding our intellectual property portfolio as part of our comprehensive market protection strategy. Now, I’d like to turn to MM-402 or R(-)-MDMA, which is a synthetic enantiomer of MDMA with potential prosocial effects in the favorable tolerability profile.

MM-402 is in development for the treatment of core symptoms of Autism Spectrum Disorder or ASD, which is characterized by atypical social communication and interactions, repetitive patterns of behavior and restrictive interests. Despite its significant and growing prevalence, there are no therapies approved to treat the core symptoms of ASD. MDMA is a synthetic molecule enantiomer referred to as in pathogen because it is reported to increased feelings of connectedness and compassion. R(-)-MDMA is sought to increase levels of serotonin and to a lesser extent, norepinephrine and other neurotransmitters in the brain resulting in feelings of increased social ability and interpersonal emotional warmth. Preclinical studies of R(-)-MDMA demonstrated to acute prosocial and pathogenic effects whileit’s diminished dopaminergic activity suggested it could exhibit less stimulant activity, neurotoxicity, hypothermia and abuse liability risk compared to racemic MDMA or S-enantiomer.

Our aim for MM-402 is to demonstrate its ability to enhance social engagement and interaction rather than having a sedating or blunting effect, which is often a result of currently used off-label medications in the ASD population. Importantly, a rate breaking abstract on the preclinical study of MM-402 and the model of ASD has been accepted for presentation as a 2023 American Society of Clinical Psychopharmacology Annual Meeting was being held in Miami Beach, Florida from May 30 to June 2. With even further preclinical evidence to support our approach, we are extremely excited to initiate our Phase 1 clinical trials MM-402 later this year. This trial is intended to characterize a tolerability, pharmacokinetics, and pharmacodynamics of MM-402, and we continue to explore all opportunities to generate early sciences efficacy as early as possible in development.

We anticipate such data could be generated both in neurotypical healthy volunteers and in otherwise healthy individuals diagnosed with ASD. In parallel, through our research collaboration with University Hospital Basel in 2022, we initiated and are currently enrolling healthy volunteers in a comparative Phase 1 pharmacokinetics and pharmacodynamic study of RS and racemic MDMA. This study is designed to evaluate the tolerability, pharmacokinetics, and acute subjective physiological and endocrine effects of the three molecules. We believe that successful completion will accelerate our understanding of the pharmacological profiles MM-402 as we advance into later stage clinical development. Lastly, moving to our digital medicine update. Our drug development strategy is closely complemented by a suite of digital medicine programs as a potential to facilitate adoption use and access to our product candidates.

Our refining the techniques used to capture, model, and map the autonomic and behavioral outflow and other correlates of neural activities. We do improve the experience of clinicians and the outcomes for patients and the delivery of psychedelics and other perception altering substances. Our digital medicine programs are oriented toward applications during two primary clinical periods, activities during a treatment session referred to as intra session and activities between treatment sessions referred to as intersection. Each digital medicine program consists of a platform that contains separate underlying components, some of which we anticipate will be within the scope of FDA’s definition of medical devices and others, which we anticipate will not be regulating as medical devices.

For the medical device products, we intend to engage with the FDA and other international regulatory authorities to receive guidance along the development pathway towards a potential submission for regulatory clearance or approval. The ultimate goal of our digital medicine projects is to develop applications that overcome fictional points of care delivery to encourage user adoption across patients, providers, and payers. Overall, we are very pleased with the progress today. As we advance our key clinical programs and execute on our corporate objectives, we continue to further strengthen the leadership of MindMed. We are very excited by the recent edition of Mark R. Sullivan is our Chief Legal Officer, Corporate Secretary. Mark brings extensive legal and public company life sciences expertise with a strong addition to our executive team.

We believe Mark’s experience and insight and guidance will proven valuable as we progress to the next stage of MindMed evolution. I would also like to highlight that as we approach our Annual Meeting in June, we are very excited by the potential of adding Dave Gryska to our Board. Dave brings invaluable insights from his 35 years of experience in the biopharmaceutical industry, including his services CFO of two S&P 500 pharmaceutical companies, Incyte and Celgene. Dave has also previously served in the Board of GW Pharmaceuticals before its acquisition by Jazz Pharmaceuticals for $7.2 billion and serves in the Board of Seagen, which recently agreed to be acquired by Pfizer for over $43 billion. Dave’s nomination represents our ongoing commitment to Board refreshment and ensuring we have the optimal mix of experience and perspectives in the boardroom to help the company create value.

I believe Dave’s involvement is an endorsement of the incredible people and organizations that we have built at MindMed, as well as the potential impact of our products on the millions of individuals suffering for brain health disorders. I’d also like to express the Board’s gratitude of Brigid Makes, who notified us that she will not stand for reelection at the Annual Meeting for her years of service for the early growth of the organization. Now its the time to radically transform how we treat brain health disorders, and we are deeply committed to realizing that potential for change. With that, I will now turn the call over to our CFO, Schond Greenway to discuss our financial results. Schond?

Schond Greenway: Thanks, Rob, and thank you all for joining us today. We will now turn to our financial results for the first quarter ended March 31, 2023. As of March 31, 2023, our cash and cash equivalents totaled $129.4 million compared to $142.1 million as of December 31, 2022. We believe that our current cash and cash equivalents on hand positions us to accelerate our preparation for moving quickly into our pivotal studies for our lead program MM-120 and we’ll be sufficient to meet our operating requirements beyond our key development milestones in 2023 and into the first half of 2025. Our net cash used in operating activities was $13.3 million for the quarter ended March 31, 2023 compared to the $12.9 million in the quarter end March 31, 2022.

Research and development expenses were $12.6 million for the quarter ended March 31, 2023 compared to $10.2 million for the quarter end March 31, 2022, an increase of $2.4 million. The increase was primarily due to increases of $2.9 million in expenses related to clinical research for the MM-120 GAD study, $0.9 million in expenses related to our MM-402 program and $0.2 million in internal personnel costs as a result of increasing research and development capabilities, which were offset by a decrease of $0.7 million in expenses related to our MM-110 program and a decrease of $0.9 million of expenses in connection with various external R&D collaborations. General and administrative expenses were $8.3 million for the quarter ended March 31, 2023, essentially flat compared to the same quarter a year ago.

Our net loss for the three month ended March 31, 2023 was $24.8 million compared to $18.5 million for the same period in 2022. Lastly, I wish to reiterate that we are continuing to execute on a very efficient operation in terms of quarterly cash burn and headcount when compared to our peers in the space. As we have highlighted during our prior business update conference calls, we intend to continue to be thoughtful with our cash, while also focusing and prioritizing our support for our most precious resource and development activities directed toward our key value drivers. More specifically, we will review our discretionary expenses on a constant basis to ensure that we are seeking to capture value from operational efficiencies where we can.

I will now turn the calls back to Rob, who will provide some closing comments.

Rob Barrow: Thank you, Schond. We remain laser focused on driving our key programs forward, which includes advancing our MM-120 product candidate in GAD and ADHD to Phase 2 clinical readouts later this year, as well as initiating our first clinical trial of MM-402. Additionally, our early R&D activities are progressing and our collaboration with University Hospital Basel continues to offer the opportunity to generate early clinical evidence to inform our pipeline’s progression. I also want to extend my sincere appreciation and gratitude for the foundational work has brought us closer to advancing novel treatments for brain health disorders. In particular, I would like to thank our highly talented and deeply committed team here at MindMed, our investors and the many people who have been supportive along the way, including our research participants and their families.

We’re working tirelessly to deliver on our mission of transforming the treatment landscape for the many individuals living with brain health disorders who are underserved by today’s available therapies. Finally, I’d like to remind everyone that the purpose of today’s call is to discuss our first quarter updates and the progress of our business, and we’ll not be addressing matters related to our annual meeting. We encourage all of our shareholders to review our definitive proxy statement within filed with the SEC and on SEDAR and visit www.protectmindmed.com updates pertaining our proxy campaign. With that, I’d like to thank you all again for joining today, and I’m happy to take questions.

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Q&A Session

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Charles Duncan, Cantor Fitzgerald. Charles, please go ahead.

Operator: Thank you. Your next question comes from Brian Abrahams, RBC Capital Markets. Brian, please go ahead.

Operator: Thank you. Your next question comes from Francois Brisebois, Oppenheimer. Francois please go ahead.

Operator: Thank you. Your next question comes from Elemer Piros, EF Hutton. Elemer, please go ahead.

Operator: Thank you. Your next question comes from Patrick Trucchio H.C. Wainwright. Patrick, please go ahead.

Operator: Thank you. [Operator Instructions] There are no further questions at this time. I will now turn it back for closing remarks.

Rob Barrow: Thank you, operator, and thanks, everyone, again for joining us today. We’re extremely pleased with where we’ve come so far this year and are incredibly encouraged by moving very quickly to a data readout in late 2023 for our lead program and getting our second lead program and MM-402 in the clinic later this year. Thanks, everyone again, for joining us, and we look forward to sharing future updates.

Operator: Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating. And ask that you please disconnect your lines.