Analysts at Canaccord Genuity (TSX:CF, LSE:CF) have reiterated their ‘Speculative Buy’ rating for MindMed (NASDAQ:MNMD, NEO:MMED) after the clinical-stage biotechnology company reaffirmed its budgets and clinical timelines with the release of its first quarter results.
“As a clinical-stage biotechnology company, quarterly financials are not a materially impactful event,” the analysts wrote in a note to clients.“More important is the commentary around clinical development.”
They wrote that with respect to MindMed (NASDAQ:MNMD, NEO:MMED)’s three priority clinical programs – MM-120 (LSD) for generalized anxiety disorder, MM-120 for adult ADHD, and MM-402 (R(-) MDMA) for autism spectrum disorder – budgets were not updated and timelines were unchanged.
They highlighted that MindMed (NASDAQ:MNMD, NEO:MMED)’s Phase 2b trial of MM-120 for generalized anxiety disorder and its Phase 2a study of MM-120 for adult ADHD were on track to deliver top-line results in the second half of 2023.
The analysts awarded MindMed (NASDAQ:MNMD, NEO:MMED) an $18 price target, which implies more than 400% upside from current levels. The company’s shares are currently trading at US$3.35.
They noted their price target was “primarily driven by future potential drug sales and cash.”
On the company’s first quarter results, the analyst noted that MindMed (NASDAQ:MNMD, NEO:MMED)’s net loss of $24.8 million and diluted loss per share of $0.65 both missed their expectations of $18.4 million and $0.49, respectively.
Cash burn of $13.3 million was slightly better than the analysts’ forecast of $13.5 million.
The company finished the quarter with $129.4 million in cash and no debt, with the analysts noting MindMed management’s belief that this would be sufficient to meet its operating requirements into the first half of 2025.
“We've increased our forecast of R&D spend and decreased our forecast of G&A spend over our model horizon based on how spend tracked in 1Q,” they wrote. “This has no impact on our [price target].”
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