logo-loader

MindMed price target lowered by Canaccord analysts after Phase 2a US clinical trial shelved

Last updated: 11:50 21 Nov 2022 EST, First published: 11:22 21 Nov 2022 EST

MindMed - drug developers working in a lab
Canaccord Genuity's analysts noted MindMed had reduced its cash operating expenses by 3% year-over-year

Mind Medicine (MindMed (NASDAQ:MNMD, NEO:MMED)) Inc has earned a repeat ‘Speculative Buy’ rating with a lowered price target of US$18 from US$22 per share from Canaccord Genuity (TSX:CF, LSE:CF) analysts following the release of its third-quarter results last week.

The biotechnology company’s shares are currently trading at about US$2.60 per share.

In a note to clients, Canaccord’s analysts noted that MindMed (NASDAQ:MNMD, NEO:MMED) had reduced its cash operating expenses by 3% year-over-year to $11.9 million, beating their $14.7 million estimate.

READ: Psychedelics stocks rise after Colorado voters approve legalization ballot in midterm election

“Based on the sizable cash R&D expense beat alongside management's commentary that it has taken meaningful steps to reduce cash expenditures, we are reducing our go-forward forecast for discovery, pre-clinical and digital R&D spend from $6 million to $4 million quarterly,” they wrote.

The company’s net loss for the quarter of $16.5 million or $0.56 per share also came in below the analysts’ estimated net loss of $19.4 million or $0.59 per share.

With respect to MindMed (NASDAQ:MNMD, NEO:MMED)’s priority clinical programs MM-120 (LSD) for generalized anxiety disorder and MM-120 (LSD) for adult ADHD, the analysts said they were not making any changes to their forecasts.

The analysts noted that they had removed MindMed (NASDAQ:MNMD, NEO:MMED)’s 18-MC for opioid withdrawal program from their spend forecast and its valuation of the company following the announcement this summer from MindMed’s management to deprioritize this program.

They said these changes along with the higher cost of capital this year resulted in their lowered price target of US$18 per share.

“With an implied more than 500% of potential upside from current levels and considering MNMD is trading below cash value of US$4 per share, we reiterate our Speculative Buy' rating,” the analysts concluded.  

Contact the author at emily.jarvie@proactiveinvestors.com

Follow her on Twitter @emilyjjarvie

Australian Strategic Materials signs US$600 million LoI

Rowena Smith, CEO and managing director of Australian Strategic Materials Ltd (ASX:ASM, OTC:ASMMF), joins Jonathan Jackson in the Proactive studio to discuss the company’ s Dubbo Project, in Central West New South Wales. This project aims to extract and process critical minerals and rare earth...

4 hours, 56 minutes ago