Mind Medicine (MindMed) Inc (MNMD) 2022 Q2 法說會逐字稿

Good afternoon, and welcome to the Mind Medicine second-quarter 2022 financial results and corporate update conference call. (Operator Instructions) 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.

Thank you, operator, and good afternoon, everyone. Welcome to MindMed second-quarter 2022 financial results and corporate update conference call.

Following market close today, 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 call, I'll provide an overview and update on our business. Then, Schond 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. 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 are reaffirming our key near-term strategic priorities and are focusing our resources on advancing our MM-120 program in psychiatric indications, specifically generalized 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 MM-110 development program, which is a non-hallucinogenic congener of ibogaine, in the second quarter, we announced positive topline data from a Phase 1 placebo-controlled study of MM-110 in 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 US. We agree with the agency, as this information would be necessary to treat participants in our planned 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 free up meaningful resources that we 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 MM-120 and MM-402.

Let me now provide some context and background for these decisions, beginning with MM-120.

MM-120 is a proprietary, pharmaceutically optimized form of lysergic acid diethylamide 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 Basel presented topline results from a Phase 2 placebo-controlled investigator-initiated clinical trial of LSD in 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 STAI-G scores 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 for the potential therapeutic effects of LSD in anxiety and depression and further support our clinical development strategy and our enthusiasm for MM-120 program in GAD.

Investigator enthusiasm for the science and participation in our clinical program is strong. And we remain on track to dose our first patient in the Phase 2b dose-optimization trial of MM-120 in GAD during the third quarter, with topline 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 objective of the study is to 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 and 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 in 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 topline 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, in the 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'd now like to turn to our MM-402 or R(-)-MDMA program, which is a synthetic enantiomer of MDMA that exhibits prosocial activity in preclinical models. MM-402 is being developed for the treatment of core symptoms of autism spectrum disorder or ASD, which is a 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 for the potential of R(-)-MDMA 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 S-enantiomer.

Additionally, R(-)-MDMA has been shown to maintain prosocial effects with reduced stimulant activity compared to MDMA in preclinical studies. And we believe they have the potential to be administered in a standard dosing regimen. We expect to commence a sponsored Phase 1 clinical trial of R(-)-MDMA in 2023.

In addition to our collaboration with University Hospital Basel, we expect to initiate a comparative Phase 1 pharmacokinetic and pharmacodynamic trial of R-, S-, and racemic MDMA in 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 Therapeutics.

While we are reducing the allocation of resources to these early-stage programs, we will continue to explore non-diluted 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 with 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 medications.

Under our Anxiety Digital Diagnoses for Precision Psychiatry or ADDAPT program, we've 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 our Quantifying the Processes and Events of Psychotherapy at Scale or QPEPS program, we've 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 MM-120 program in psychiatric disorders and MM-402 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 read-outs 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 programs.

On the leadership front, 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 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. 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 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 Schond Greenway, our CFO, who will discuss our financial results. Schond?

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 our 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 at $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 milestones 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 1-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 on the NASDAQ and the NEO Exchange's -- at market open on August 29, 2022.

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

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 of MM-120 in GAD and ADHD; commencing our Phase 1 clinical trial for MM-402 in healthy volunteers in 2023; and through our collaboration with UHB, initiating a Phase 1 comparative pharmacokinetic and pharmacodynamic trial of R-, S-, 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 MM Holdings. 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're still reviewing their letter and do to plan to address on this call. Therefore, we ask that your questions [be] going to do 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.

(Operator Instructions) Charles Duncan, Cantor Fitzgerald.

Okay. Thank you. Hi, Rob and team. Congratulations on the progress and completion of that strategic review. And to Schond, congrats on joining the MindMed group.

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 will be enrolling in the GAD study are experienced with LSD or not?

Yeah, thanks so much for the question, Charles. In terms of the clinical design for MM-120 in GAD, as you know, we are conducting a five-arm parallel clinical trial on this indication, and we have 200 patients across -- in the entire study. We're enrolling 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 in clinical research studies, that can vary by jurisdiction, by state, and by the local DEA office. But we've been working feverishly in the background with each of the sites to get their applications together and anticipate getting many of the sites online in the very near term.

Okay. And then I think you used the words up to 200 patients to be enrolled in that study. I may have missed -- misheard that. But if I did hear it correctly, could you let us know what would determine the total sample size, the final sample size?

Yeah. The target sample size is 200 patients. Obviously, there is some final variance that's possible in those numbers -- plus or minus, a few patients -- simply met based on the end of the study enrollment. But we are targeting and anticipate enrolling the full 200 patients for that study.

Elemer Piros, ROTH Capital Partners.

Yes. Hi. Rob, just one question on the anticipated 20 sites. I saw one of them is listed on ClinicalTrials.gov. Is there any more -- is there maybe a delay with the listing on that website, or they are coming on as we speak so they are just not in the system yet?

Absolutely. There is no delay. All sites are coming online, and 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 MM-110 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 in a number of jurisdictions. But as we previously announced, we were intent on advancing that program into Phase 2 subject to those discussions with FDA.

Based on those discussions, it was clear that we needed to do additional non-clinical 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'll re-evaluate moving forward into a Phase 2 program.

Patrick Trucchio, H.C. Wainwright.

Thanks. Good afternoon. Just a couple of follow-up questions from me. I guess, just the first one, if you could remind us, in the LSD Phase 2b trial, what are the doses that are going to be evaluated of LSD? And would a low dose or would a sub-perceptual dose be expected to act as the control in this trial?

Yeah. 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 the 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, that's 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 comparison between those -- the dose such as 25 milli -- or excuse me, 25-microgram 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.

Yeah. That's helpful. And then, as well in this Phase 2b trial, can you talk about -- are there any requests or is there anything from the regulators on the safety and tolerability side that you would -- that would need to be generated or that you would be looking for beyond what we would normally look to see in a Phase 2b trial?

And what would you need to see from an efficacy and safety perspective to give confidence to move this program forward to Phase 3?

Yeah. 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 LSD, there is a history of clinical research. And where there are any observations from historical literature, we certainly pay special attention there. But there is nothing that would stand out as particularly unique or not ordinary about the safety endpoints we're studying in the trial.

And (multiple speakers) your second part -- sorry -- second part of the question, I believe. Do you mind repeating the second part of your question?

Yeah. Just in terms of the improvement that you're looking for on the primary endpoint, and what would give you confidence to move this program forward to Phase 3? Would you be looking for what was just demonstrated in UHB trial or similar outcome as well as a clear of dose response? Or what would you want to see here from efficacy as well as safety to move forward to Phase 3?

Yeah. We have not given guidance on the specific cut-offs or for what we'd anticipated to move forward. Certainly, we would anticipate and expect and would want to see a dose response compared from top doses or from any of the doses to a placebo. So we are certainly looking for a clinical response in this study. And obviously, we are always shooting to have a statistically and clinically significant result.

Based on the results from the UHB study and from historical literature, we're quite confident that that outcome is going to be achieved. And certainly, we'll analyze those data and try to path forward based on the outcomes in the study.

Sepehr Manochehry, Eight Capital.

Good afternoon. Thanks for taking my question.

My first question is on the lead program you guys have as your focus. I understand there is a Phase 2a happening for MM-120 that started in December with the kind of two arms -- I think 26 patients per arm. Do you have visibility on where that enrollment is and, I guess, what that cadence has been like? Has it picked up in the last couple months? And yeah, just give us a little bit of insight into that.

Yeah. Enrollment has progressed according to plan, and we remain on track to have a read-out 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, I believe at this stage that everything is on track for that clinical read-out release guided to the second half of next year.

Got it. So that's past that startup phase and has started to dose patients like -- or just distinguishing from the GAD study, which is right now on the ramp-up before dosing, like can you give us insight into what the lead-in time was before dosing in that study, if that's informative for this one?

Yeah. They're quite different study design and different patient population. So we certainly [just manage] 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, it's great to see the cost reduction and the forward-looking cost reduction efforts.

When you guys talk about non-dilutive funding, do you have insight, and have you gotten line of sight into opportunities or whether it's co-development partnerships or government grants? I understand and I believe the National Institute of Health Research has funded some programs that align with kind of MM-110 program. Can you 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 are in position today to say that we have one that we are going to be advancing with, but we keep our options open to us. And we'll continue to explore them to chart a path forward for that program.

Charles Duncan, Cantor Fitzgerald.

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. 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 as, as you know, there are no available therapies in the treatment of the core symptoms of autism spectrum disorder. And so, this would really represent a first-in-class position if we're ultimately successful in the approval of this program.

In terms of the study that we'll be starting very soon, it is, as you said, a comparative PK/PD study between the two enantiomers of MDMA and racemic mixture. One of the things we're particularly interested in is observing the on-drug prosocial and perceptual effects.

MDMA is not a serotonergic psychedelic such as LSD. So we see more serotonergic activity with the R-enantiomer, which observe functionally and subjectively what patients' experience is on the drug.

While autism is certainly a disorder that is defined in the DSM, we believe that the ongoing effects that would be present in normal healthy volunteers may have carryover effects that would give us confidence to move forward in the ASD population. So we're certainly very keen on understanding the pharmacodynamic and subjective effects of R(-)-MDMA 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 be happy to talk further about them and where we see the clients.

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 and is diagnosed in early childhood. So over the longer term, we certainly have a path charted where we anticipate moving into pediatric indications if the data support it 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 them as part of the development program at some point.

Okay, very good. Thanks for taking the follow-up.

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's 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 ask that you please disconnect your line.