Q2 2022 Mind Medicine (MindMed) Inc Earnings Call

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 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.

Thank you, operator, and good afternoon, everyone. Welcome to my second quarter 2022 Financial Results and Corporate Update conference call.

Following market close today, we issued a press release with a summary of our results.

The press release reporting our financial results is available in the investors and media section of my meds website. And our quarterly report on Form 10-Q for the quarter ended June 30th, 2022 will be filed today with the Securities and Exchange Commission.

Joining me on today's call is Shawn Greenway, our Chief Financial Officer, Dr. Mary Halpern-Wernly, our Executive President, and Dr. Daniel Carlin, our Chief Medical Officer.

During the course of today's call, I'll provide an overview and update on our business.

Then, Shaolin will review financial results for the quarter ended June 30, 2022, followed by a Q&A.

Before we begin, let me remind you that during this conference call, we will be making forward-looking statements.

Companies' actual results may differ materially from those expressed in or indicated by such forward-looking statements. Quite often, thirteen

For a 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 are reaffirming our key near-term strategic priorities and are focusing our resources on advancing our MM120 program in psychiatric indications, specifically generalizing anxiety disorder and attention deficit hyperactivity disorder.

and our MM-402 program in autism spectrum disorder.

We believe the enhanced focus of resources on these programs represents a cost-effective approach to advancing the programs in our pipeline that have the highest probability to generate near-term value for our shareholders.

With respect to our MM110 development program, which is a non-halucinogenic congenital vibicane

In the second quarter, we announced positive top-line data from a phase 1 placebo-controlled study of MM110 and 108 healthy volunteers.

We previously stated that our goal for this program was to initiate a phase 2 trial in opioid withdrawal subject to our ongoing dialogue 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 would agree with the agency as this information would be necessary to treat participants in our plan states to a 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-clinical hurdles and, depending on interest, would revisit a Phase II clinical development program for MN110.

We are also reducing the allocation of resources to other early-stage research and development programs.

Again, we believe these decisions free up meaningful resources that will be reallocated to 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 MM120 and MM402.

Let me now provide some context and background for these decisions, beginning with MM120.

M120 is a proprietary, pharmaceutically optimized form of lysergic acid, diaphthalamide, or LSD, that 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 of Basel presented top-line results from a Phase II 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 of anxiety and depression.

The study drug was well tolerated and at a dose of 200 micrograms, resulted in significant and strong reductions of global state trait anxiety inventory, or STYG scores, 16 weeks after treatment, and the between-subjects analysis with a statistically significant improvement from baseline in the placebo.

We are encouraged by these positive data, which reinforce decades of clinical evidence for the potential therapeutic effects of LSD and anxiety and depression, and further support our clinical development strategy and our enthusiasm for our MM120 program, NGAD.

Invest your data and enthusiasm for the science and for participation in our clinical program is strong. And we remain on track to dose our 1st patient in the phase 2B dose optimization trial of Mm120 and GAD during the 3rd 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 IIb clinical trial is designed to enroll up to 200 participants who will receive a single administration of up to 200 micrograms of Mm120 or a placebo.

The primary objective of the study is to demonstrate reduction in anxiety symptoms for up to 12 weeks after a single administration of M. M. 120 across 5 treatment arms.

The initiation of this trial represents a major milestone and builds on growing body health evidence that further underscores the therapeutic potential of M120.

I believe this is just the beginning for MM120 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 MM120 NGAD as efficiently and cost-effectively as possible.

Our phase 2A study of M1 120 and ADHD continues to progress with enrollment, and we remain on track to deliver top down results in late 2023.

We continue to believe in the broad therapeutic potential of MIM120.

Although over the near term, we are prioritizing the clinical research of them with 120 and psychiatric disorders.

At the appropriate time in the future, we intend to continue to explore indications in other disease areas, such as chronic pain, among others, as we seek to advance novel therapeutic approaches for patients with a wide range of symptoms.

of brain health disorders.

I'd now like to turn to our MM402 or R-MDMA program, which is a synthetic enantiomer of R-MDMA that exhibits pro-social activity and preclinical models.

MM402 is being developed for the treatment of core symptoms of autism spectrum disorder, or ASD.

which states a developmental disorder characterized by atypical social communication and interaction, repetitive patterns of behavior, and restricted interest.

Preclinical studies and scientific literature to date have continued to reinforce compelling data, providing strengthening evidence of the potential of RMDMA and its acute prosocial effects, while its reduced dopaminergic activity suggests that it will exhibit a favorable safety and tolerability profile compared to racemic MDMA or the SNA tumor.

Additionally, RMDMA has been shown to maintain prosocial effects with reduced stimulant activity compared to MDMA in preclinical studies, and we believe may have the potential to be administered in a standard dosing regimen.

We expect to commence a sponsored Phase 1 clinical trial of RMDMA in 2023.

In addition to our collaboration with University Hospital Basel, we expect to initiate a comparative phase 1 pharmacokinetics and pharmacodynamics trial of R, S, and Rasein-MDMA in healthy volunteers in the 3rd quarter of 2022.

Additionally, our external collaborations and early research and development activities have continued to progress, including the conclusion of the initial collaboration between MindMed and Next Stage Therapeutics.

While we are reducing the allocation of resources to these early-stage programs, we will continue to explore non-dilutive and self-funding collaborations that will drive meaningful advancement of our early R&D pipeline.

I'll now turn to our platform of 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've continued to advance our clinical studies at the 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 medication.

Under our anxiety digital diagnoses, precision psychiatry or adapt program, we've continued to advance our clinical research. For the study that is currently in private beta enrolling by invitation.

using a newly developed mobile application.

Finally, under our quantifying the processes and events of psychotherapy at scale, or QPEPs, QPEP program.

We have completed the data collection period of our clinical research study and the study is entering an interim analysis phase.

Overall, we are extremely excited about these advancements and the value-driving milestones ahead.

With our enhanced focus on the MM120 program in psychiatric disorders and MM402 in 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 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 program.

On the leadership front, today we announce and are pleased to welcome Dr. Suzanne Broun 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 in 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. Mary Halpin-Werley retired from her position as a board member.

Mary has played an essential role in the strategic direction, execution, and advancement of MindMed with a valuable member of the board of directors and management team.

On behalf of the board, we thank Miri for her service on the board as she continues in her role as Executive President, in which 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 Sean.

our CFO , who will discuss our financial results.

John ?

Thanks, Rob, and thank you all for joining us today. We will now turn to our financial results for the second quarter into June 30, 2022.

Research and development expenses for the second quarter of 2022 were $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 SAM 120 program and the commencement of our R-India NA study that was offset by a decrease in external costs related to the completion of our 18MC study in 2021. The increase was also due to $2.8 million of external costs related to the completion of our actual RPC 21-1931.

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 addition to non-cask stock-based compensation expenses related to the modification of stock option rewards 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.

Carbon netcast 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 on December 31, 2021.

Our goal is to continue to be pretty.

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 milestones in 2023 and into 2024, which is well over 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 15 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 in considering and planning for future potential business needs.

and to address the NASDAQ minimum price bid requirement.

The 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 NIO exchanges.

at market open on August 29th, 2022.

I'll turn the call back over to Rob who will provide some closer comments.?

Thank you, Sean.

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.

We're the 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 of Mm120 and GAD and ADHD.

Commencing our phase 1 clinical trial for MN402 in healthy volunteers in 2023.

And through our collaboration with UHB, initiating a phase 1 comparative pharmacokinetics and pharmacodynamic trial of R, S, and racemic MDMA in healthy volunteers in the 3rd quarter of 2022.

Finally, I want to note that we are aware of the letter issued earlier today by FCM and M. Holden.

Unfortunately, SCM chose not to directly contact us about their views before issuing the letter.

That was disappointing because we were always open to feedback from our shareholders.

Nevertheless, we will be receptive to engaging in a constructive dialogue with SVM if they are interested.

We're still reviewing their letter and do not plan to address it on this call. Therefore, we ask that your questions be limited to our second quarter updates and the progress of the business that we've discussed today.

With that, I'd like to thank you all again for being here today and happy to take any questions.

If you would like to register a question, please press the 1 followed by the 4 on your telephone and you will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the 1 followed by the 3. If you are using a speakerphone, please lift your handset before entering your request. Once again, that's 1-4 to register for question 1 for the first question.

We have a question from Charles Duncan with Kent or Fitzgerald. Please go ahead and open. Okay, thank you. Hi Rob and team. Congratulations on the progress and completion of that strategic review. And to Sean, congrats on joining the MindMed group.

I had a couple of questions, primarily on 120. I guess I'm wondering if you could provide a little bit more color, Rob, on the GAD study. Nice to see that you plan to dose the first patient, but can you give us a little bit of sense of the number of clinical sites that you plan to initiate over the course of the near term?

And then whether or not those patients that you'll be enrolling in the GAD study are experienced with LSD or not.

Thanks so much for the question, Charles.

In terms of the clinical design for. And then 120 and we, as you know, we are connecting a 5 arm parallel. Clinical trial on this indication and we have 200 patients across the entire study. We're rolling at 20 sites here in the US.

As our target number of sites, and we anticipate to get many of those sites online in the very near term.

Given some of the controlled substances requirements to activate clinical sites.

Using a schedule 1 controlled substance and clinical research studies that can vary by jurisdiction by state by the local office, but we've been working. Feverishly in the background with each of the sites to get their applications together and then to getting. Any of the sites to online and very near term.

Okay, and then I think he used the words up to 200 patients to be enrolled in that study. I may have misheard that, but if I did hear it correctly, could you let us know what would determine the size of the cancer window?

total sample size, the final sample size.

Yep, the target emphasizes 200 patients. Obviously there's some some final variance that's. Possible in those numbers, plus or minus a few patients. Simply meant based on the end of the study enrollment, but we are targeting and.

anticipate enrolling the full 200 patients without funding.

Our next question is from the line of LMR PROS with Roth Capital Partners. Go ahead your lines open.

Yes, hi, Rob, just 1 question on the anticipated 20 sites. I saw 1 of them is listed on clinical trials dot. Gov. is there any more? Is there's maybe a delay. Um, with the listing on that website, or they are coming on as we speak. So they're just not in the system yet.

Absolutely. There's no delay. All the sites are coming online. It's just a matter of when those sites are posted on clinicaltrials.gov.

Okay, and could you please also just a little bit elaborate on your decision not to.

directly invest in MM110 at this stage, what brought that decision or what precipitated that decision, if you wouldn't mind?

Absolutely, as I mentioned, we had a productive engagement with FDA. We were exploring opportunities to. Pursue that program and a number of jurisdictions. But as we previously announced, we were intent on basically that program into phase 2 subject to those discussions with FDA based on those discussions. It was clear that we needed to do additional nonclinical. Research in order to support an adequate dose and duration.

in the treatment of opioid withdrawal, and therefore decided that the time and cost requirements.

To bring that product forward at this time needed to be allocated to our other programs.

That said, we of course see value and potential in this program and at the appropriate time in the future we will reevaluate moving forward into a Phase II program.

Our next question is from Patrick Trucchio with HZ Wainwright. Please go ahead and your lines are now open.

Thanks. Good afternoon. Just a couple of follow up questions for me. I guess just the first one that you could remind us in the LSD phase 2b trial. What are the doses that are going to be evaluated of LSD and with the low dose or would a sub perceptual dose be expected to act as the control in this trial?

Yeah, thanks. Thanks so much, Patrick. So the doses we're testing in addition to a placebo are 25 micrograms, 50 micrograms, 100 micrograms and 200 micrograms of LSD. Those correspond to

Different levels of perceptual activity after acute administration of LSD.

One of the great things about this study is that it will enable us to…

do post-hoc pairwise comparisons between each of those dose levels. One of the things we feel has been inadequately explored with the psychedelics is the dose responsiveness both acutely and in terms of durability of effects across this dose range.

So we will certainly be looking at the potential of all of these doses to impart either rapid or prolonged clinical benefit. But we'll also be looking at the comparisons between the dose such as 25 micrograms compared to the 200 microgram or 100 microgram dose to determine if there are differences in terms of placebo response or functional unblinding between those doses.

And then as well in this Phase IIb trial, can you talk about, are there any requests or is there anything from the regulators on the safety and tolerability side that would need to be generated or that you would be looking for beyond kind of what we would normally look to see in a Phase IIb trial? And what would you need to see from kind of an efficacy and safety perspective to give confidence to move this program forward to Phase III?

Yeah, and in terms of safety endpoints, they're largely aligned with both what you would expect from any CNS active.

Molecule that's in phase 2 development there is obviously with LSC. There's a history of clinical research and where there are. Any observations from historical literature, which really pay special attention there, but there's nothing that would. Stand out as particularly.

unique or not ordinary about the safety endpoints we're studying in the trial.

And your 2nd part.

Second part of the question, I believe.

Do you mind repeating the second part of your question there? Yeah, just in terms of the improvement that you're looking for on the primary endpoint and kind of what would give you confidence to kind of move this program forward to phase three, would you be looking for kind of what was just demonstrated in the UHP trial or kind of similar outcome as well as kind of a clear kind of dose response? What would you want to see here from efficacy as well as safety to move forward to phase

statistically and clinically significant results. Based on the results from the UHV study and from historical literature we're quite confident that outcome is...

is going to be achieved and certainly we'll analyze those data and chart a path forward based on the outcomes we study.

Our next question is from Separ Mano Cherry with eight capital. Please go ahead, your line is open.

Good afternoon, thanks for taking my question. My first question is on the LEAD program you guys have as your focus.

I understand there's a phase 2A happening for MM120 that started in December with the kind of 2 arms, I think 26 patients per arm. Do you have visibility on where that enrollment is?

I guess what that cadence has been like, has it picked up in the last couple months and just give us a little bit of insight into that.

enrollment has progressed.

According to plan, and we remain on track to have a readout in the later part of 2023 in that study. We don't typically announce enrollment figures for any of our clinical studies along the way while they're in progress, but. Certainly believe at this stage that everything is on track for that current guide into the 2nd, half of next year.

Got it so that's kind of past that startup phase and has started to dose patients. So, like, just kind of distinguishing from the guide study, which is right now on the ramp up before dosing. Like, can you go since into what the lead in time was before dosing and that study and if that's informative for this one.

Yeah, they're quite different study designs and different population. So. We're certainly with them as somewhat discrete in terms of how we approach it. That study is actively dosing patients and is ongoing.

Got it. Okay. Well, that's great to hear and obviously great to see the cost reduction and the forward looking cost reduction efforts. When you guys talk about non dilutive funding. Do you have do you have insight and have you gotten kind of line of sight into opportunities or whether it's co development partnerships or. Government grants I understand the, I believe, national institute of health research has in past funded some.

programs that align with the M 110 program. Can you kind of touch on that?

Yeah, we're open to exploring all non diluted sources of capital and we'll be exploring those as we progress here. We certainly.

Aren't in a position today to say that we have have 1 that we are going to be advancing with, but we. Keep our options open to us, and we'll continue to explore them to try to pass forward for that program.

And I believe we have a follow-up question from Charles Duncan with CANTOR Fitzgerald. Please go ahead. Lines open.

Hi, Rob, thanks for taking the follow up. I wanted to ask you about 402 program that we haven't talked much about on this call so far.

I'm intrigued with that. I guess I'm wondering if you can provide us a little bit of color on the IP behind it, as well as in terms of, I think you mentioned a study looking at R and then S and then also racemic and I'm wondering...

what you anticipate being able to learn from that study.

Yeah, thanks so much Charles. We're very excited about this program and the potential it has. As you know, there are no available therapies.

And the treatment of the core symptoms of autism spectrum disorder and so this would really represent a 1st, in class position for ultimately successful in the approval of this program in terms of of the study that will be starting very soon.

It is a, it is, as you said, a comparative study between the 2 and answers of and or. 1 of the things we're particularly interested in is observing the on drug, pro social and perceptual effects. And is not a therapeutic psychedelic such as L. S. D. so we see more search energy activity with the art antimer, but to observe. Functionally and subjectively what patients.

Experiences on the drug while autism is certainly a disorder that is defined in the DSM. We believe that the on drug effects that would be present in normal healthy volunteers may have carry over effects that would give us confidence. To move forward in the population, so we're certainly very keen on understanding. The pharmacodynamic and subjective effects of R and DMA in a treatment session.

In terms of intellectual property, we have filed and will continue to file.

Patents across our entire portfolio, we feel quite confident in our strategic approach, both with patent and non patent intellectual property protection. And as those applications are. Further prosecuted and become published, we'll certainly. I'd be happy to talk further about them and where we see the claims.

Okay, and can I assume that you'll be conducting those studies in adults?

first, and then do you have any plans to consider?

rare neurodevelopmental disorders in which ASD is a prominent symptom in adults or even younger people.

I suppose that's a stretch, but...

We certainly do anticipate to begin our clinical research program in adults, but this is a disease that is developmental in...

Is diagnosed in early childhood, so over the longer term, we have a path charted where we anticipate moving into pediatric.

indications if the data supported ultimately.

We keep our minds open as well to subtypes of any of the diseases. And if there are rare pediatric or rare adult diseases that would align with the prominence of any of these symptoms or autism spectrum disorder in itself, we would certainly take every opportunity to explore that as part of the development program at some point.

Okay, very good. Thanks for taking the time to talk.

Absolutely, thanks so much.

And I believe that's 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 CEO Rob Barrow for closing remarks. Rob.

Thank you, operator, and thank you, everyone, who joined us this afternoon. Before we conclude today's call, I'd also like to thank the entire MindMed team, our investors, and to the many people who have been supportive along the way, including our study participants and their families.

That concludes the call for today. We thank you for your participation and I ask that you please disconnect your line.

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