Mind Medicine (MindMed) Inc. (MNMD) on Q2 2022 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to the Mind Medicine Second Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. It is now my pleasure to introduce your host Robert Barrow, Chief Executive Officer and Director at Mind Medicine. Mr. Barrow, you may begin your conference.
Robert Barrow: Thank you, operator and good afternoon everyone. Welcome to MindMed second quarter 2022 financial results and corporate update conference call. Following market close, we issued a press release with the summary of our results. 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 June 30, 2022 will be filed today with the Securities and Exchange Commission. Joining me on today’s call is Schond Greenway, our Chief Financial Officer, Dr. Miri Halperin Wernli, our Executive President and Dr. Daniel Karlin, our Chief Medical Officer. During the course of today’s, I will provide an overview and update on our business and Schond will review financial results for the quarter ended June 30, 2022 followed by Q&A. For I began, let me remind you that during this conference call, we will be making Forward-Looking Statements. Company’s actual results may differ materially from those expressed and/or indicated by such Forward-Looking Statements. For description of risks, please refer to our quarterly and annual filings with the Securities and Exchange Commission. Today, I will begin with an update on our corporate strategy. During the course of the quarter, we undertook a review of all of our assets, R&D programs and our overall business strategy. Based on this assessment, we were reaffirming our key near-term strategic priorities and are focusing our resources on advancing our MM-120 program in Psychiatric Education, specifically Generalized Anxiety Disorder and Attention Deficit Hyperactivity Disorder and our MM-402 program and Autism Spectrum Disorder. We believe the enhanced focus of resources on these programs represents a cost effective approach to advancing the programs in are pipeline that have the highest probability to generate near-term value for our shareholders. We reflect spectrum MM-110 development program, which is a non-hallucinogenic congener of ibogaine. In the second quarter we announced positive top line data from a Phase 1 placebo controlled study of MM-110 and 108 healthy volunteers. We previously stated that our goal for this program was initiated a Phase 2 trial and opioid withdrawal subject to our ongoing dialogue is and feedback from FDA. Following a productive Type C meeting, we received feedback from the agency in which they requested Additional Preclinical Characterization of MM-110. That will now be required prior to initiating the proposed Phase 2a trial in the U.S. We agree with the agency, as this information would be necessary to treat participants and our plan Phase 2a clinical trial with what we believe to be an adequate dose and duration. Given the time and cost that would be required based on these recent developments, we are reallocating our internal resources from this program to our other product candidates that we believe have a higher probability to generate near-term value for our shareholders. In parallel, we are undertaking efforts to seek non-dilutive sources of capital and or collaborations with third-parties to address these non-critical hurdles and depending on interest would revisit Phase 2 clinical development program for MM-110. We are also reducing the allocation of resources to other early stage research and development programs. Again, we believe these decisions are meaningful resources that will be reallocated for our highest priority programs, and extend our cash runway further into 2024. We continue to progress these highest priority programs as expeditiously as possible, and believe our team has the capabilities and resources to execute a fastest-to-market strategy for MM-120 and MM-402. Let me now provide some context and background for these decisions beginning with MM-120. MM-120 is our proprietary pharmaceutically optimized form of lysergic acid diethylamide, or LSD is being developed for the treatment of psychiatric disorders, including Generalized Anxiety Disorder, or GAD, and Attention Deficit Hyperactivity Disorder, or ADHD. In May our collaborators at University Hospital Basel presented top line results from a Phase 2 placebo controlled investigator initiated clinical trial of LSD and the treatment of anxiety disorders at London’s PSYCH Symposium. The results in 46 patients with clinically significant anxiety, demonstrated the significant rapid, durable and beneficial effects of LSD and its potential to safely mitigate symptoms anxiety and depression. The study drug was well tolerated and then a dose of 200 micrograms resulted in significant and strong reductions of Global State-Trait Anxiety Inventory, or STAI-G 16-weeks after treatment in the between subjects analysis, with a statistically significant improvement from baseline compared to placebo. We are encouraged by these positive data which reinforce decades of clinical evidence the potential therapeutic effects of LSD and anxiety and depression and further support our clinical development strategy and our enthusiasm for our MM-120 program and GAD. Investigator enthusiasm for the science and for participation in our clinical program is strong. And we remain on track to dose our first patient in the Phase 2b Dosed Optimization trials and MM-120 of GAD during the third quarter with top line results from this study expected in late 2023. Based on our team’s extensive expertise in the development of CNS drugs, and specifically psychedelics, we are confident that our clinical development plan represents the fastest path to market. Our team remains highly motivated to execute this development program in the most efficient manner possible to minimize the lag time between stages of development and to demonstrate best-in-class execution of our development program. As a reminder, our Phase 2b clinical trial is designed to enroll up to 200 participants who received a single administration of up to 200 micrograms of MM-120 or a placebo. The primary objectives and studies demonstrate reduction in anxiety symptoms for up to 12-weeks after a single administration of MM-120 across five treatment arms. The initiation of this trial represents a major milestone, it builds on growing body of evidence that further underscores the therapeutic potential of MM-120. I believe this is just the beginning for MM-120 as we continue to advance our clinical development program, and deliver on our goal of generating the required clinical data to support the regulatory approval of MM-120 and GAD as efficiently and cost effectively as possible. Our Phase 2a study of MM-120 in ADHD continues to progress with enrollment, and we remain on track to deliver top-line results in late 2023. We continue to believe in that broad therapeutic potential of MM-120. Although over the near-term, we are prioritizing the clinical research of MM-120 in psychiatric disorders, and their appropriate time in the future we intend to continue to explore indications and other disease areas, such as chronic pain among others, as we seek to advance novel therapeutic approaches for patients with a wide range of brain health disorders. I would now like to turn to our MM-402 or R-MDMA program, which is a synthetic enantiomer of MDMA that exhibits pro social activity and preclinical models. MM-402 is being developed for the treatment of core symptoms of Autism Spectrum Disorder, or ASD, which means the developmental disorder characterized by atypical social communication and interaction, repetitive patterns of behavior and restricted interests. Preclinical studies and scientific literature to-date have continued to reinforce compelling data, providing strengthening evidence the potential of R-MDMA and its acute pro social effects. While it is reduced dopaminergic activity suggested it will exhibit a favorable safety and tolerability profile compared to racemic MDMA or the SN antimer. Additionally, R-MDMA has been shown to maintain process to effects with reduced stimulant activity compared to MDMA and preclinical studies and we believe they have the potential to be administered in a standard dosing regimen. We expect to commence a sponsored phase one clinical trial of R-MDMA in 2023. In addition to our collaboration with University Hospital Basel, we expect to initiate a comparative Phase 1 pharmacokinetics and pharmacodynamics trial of RS and recite MDMA and healthy volunteers in the third quarter of 2022. Additionally, our external collaborations in early research and development activities has continued to progress, including the conclusion of the initial collaboration between MindMed and Nextage Therapeutic. While we are reducing the allocation of resources to these early stage programs, we will continue to explore non diluted and self funding collaboration that will drive meaningful advancement of our early R&D pipeline. I will now turn to our platform digital medicine products, which is strategically aligned with our drug development program, and has the potential to facilitate broad and diverse access to our product candidates. Under our MindMed Session Monitoring System or MSMS platform, we have continued to advance our clinical studies and completion of data collection to evaluate sensory data during a consciousness-altering therapeutic session. As a reminder, the MSMS platform is a technological product platform that provides the foundation for the development and implementation of a suite of regulated and unregulated products for use by clinicians and patients during treatment sessions that may also include the use of consciousness-altering medications. Under our Anxiety Digital Diagnoses for Precision Psychiatry or ADDAPT program, we have continued to advance our clinical research with a study that is currently in private beta enrolling by invitation using a newly developed mobile application. Finally, under are Quantifying the Processes and Events of Psychotherapy at Scale or QPEPS program. We have completed the data collection period of our clinical research study, and the study is entering an interim analysis stage. Overall, we are extremely excited about these advancements and the value driving milestones ahead. With our enhanced focus on the MM-120 program in psychiatric disorders, and then MM-402 an ASD, we believe we will gain operational and capital efficiencies that represent a cost effective approach to bringing these products into late stage development with significant data readouts anticipated in the next 12-months to 18-months. We believe our clinical development plans represent the fastest and most efficient path to bring our product candidates to market. And our lean and efficient team is poised to demonstrate our best-in-class execution of our core R&D programs. On the leadership side, today, we announced and are pleased to welcome Dr. Suzanne Bruhn and Dr. Roger Crystal as new independent members of our Board of Directors. Sue and Roger both bring a valuable mix of public company Life Sciences experience and driving major fundraising efforts and developing and bringing innovative new products to market. Their integrity, independence and experience will be invaluable as we advance through several key product development inflection points in the coming year, and we look forward to their immediate contribution to our Company’s success. In connection with the addition of these two independent directors, Dr. Miri Halperin Wernli retired from her position as a Board Member. Miri has played an essential role in the strategic direction, execution and advancement of MindMed as both a valuable member of the Board of Directors and management team. On behalf of the Board, we think Miri for her service on the board as she continues in her role as executive president, and wish she serves a key leadership role across all of the Company’s organizational and R&D initiatives. I will now turn the call over to Schond Greenway, our CFO who will 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 second quarter ended June 30, 2022. Research and development expenses for the second quarter of 2022 were at $9.3 million, compared to $8.1 million for the same period in 2021. The increase was primarily due to $2.8 million of external costs related to the MM-120 program and the commencement of R-MDMA study, and was offset by a decrease in external costs related to the completion of our 18-MC study from 2021. General and administrative expenses were $7.6 million for the second quarter of 2022, compared to $37.1 million for the same period in 2021. The decrease was primarily due to $24.4 million in additional non-cash stock based compensation expenses related to the modification of stock option awards and restricted stock units. The net and comprehensive loss for the second quarter of 2022 was $17.1 million, compared to $44.5 million for the second quarter of 2021. Our net cash used in operating activities was $28 million for the six-months ended June 30, 2022, compared to $21.2 million for the same period in 2021. As of June 30, 2022, our cash and cash equivalents were $105.7 million, compared to $133.5 million at December 31, 2021. Our goal is to continue to be prudent with how we manage our cash and our expenses. And we believe that our cash and cash equivalents will be sufficient to meet our operating requirements beyond our key development milestone in 2023 and into 2024, which is well above 18-months of cash runway based on our current budget. Finally, I wanted to mention that earlier in the month, the Board of Directors approved a ratio of one for 50 reverse share split of the Company’s common shares. The reverse share split is intended to enable us to achieve several important corporate objectives by providing greater flexibility and considering and planning for future potential business needs and to address the NASDAQ minimum price bid requirement. To reverse share split is expected to take effect after the close of business on August 26, 2022 with the trading expected to begin on a split adjusted basis when the NASDAQ and the NEO Exchanges at market open on August 29, 2022. I will turn the call back over to Rob, who will provide some closing comments. Rob.
Robert Barrow: Thank you Schond. As we have demonstrated, the second quarter was marked by steady progress across our development pipeline, but equally as important, we made some key decisions on our corporate strategy and focus that I believe will drive increased success and efficiency. With a highly talented and committed team here at MindMed who have continued to execute this plan. Our near-term priorities are clear, advancing the ongoing clinical trials with MM-120 and GAD and ADHD, commencing our Phase 1 clinical trial for MM-402 and healthy volunteers in 2023. And through our collaboration with UHB, initiating a Phase 1 comparative pharmacokinetics and pharmacodynamics trial of RS and racemic MDMA in healthy volunteers in the third quarter of 2022. Finally, I want to note that we are aware of the letter issued earlier today by FCM and MM Holding. Unfortunately, FCM chose not to directly contact us about their views before issuing the letter. That was disappointing because we are always open to feedback from our shareholders. Nevertheless, we will be receptive to engaging in a constructive dialogue with FCM, if they are interested. We are still reviewing their letter and we are not trying to address on this call. Therefore, we ask that your questions will be going to do our second quarter updates and the progress of the business that we discussed today. With that, I would like to thank you all again for being here today and happy to take any questions.
Operator: [Operator Instructions] We have a question from Charles Duncan with Cantor Fitzgerald. Please go ahead. Your line is now open.
Operator: Our next question is from the line of Elemer Piros with ROTH Capital Partners. Please go ahead. Your line is now open.
Operator: Our next question is from Patrick Trucchio with H.C. Wainwright. Please go ahead. Your line is now open.
Operator: Our next question is from Sepehr Manochehry with Eight Capital. Please go ahead. Your line is now open.
Operator: And we have a follow-up question from Charles Duncan with Cantor Fitzgerald.
Operator: And I believe that is all the time we have for questions today. That concludes the Q&A portion of the call. I will now turn the call back over to MindMed’s CEO Rob Barrow for closing remarks. Rob.
Robert Barrow: Thank you, operator and thank you everyone who joined us this afternoon. Before we conclude today’s call. I would also like to thank the entire MindMed team, our investors into the many people who have been supportive along the way, including our study participants and their families.
Operator: That concludes the call for today. We thank you for your participation asked that you please disconnect your line.
