Mind Medicine (MindMed) Inc (NASDAQ: MNMD) closed at $3.52 shedding 5.12%. Certain pain points are limiting the attractiveness of this company. From where we see, it has one of the most diversified psychedelics pipelines as far as R&D, and clinical development in the mental health segment is concerned. With a sharp rise in issues associated with mental health in a fast decade, the stock can facilitate freshness in this regard. But the business model itself has potholes that break the speed of this company. Let us cover the pros and cons one by one.
The company is trying to tap into the fast-growing mental health sector (50%, to be precise). Global data reveals that this market can grow to $40.9 billion by 2025, from $27.4 billion in 2020. This exponential growth is a fortune changer for smaller biotechs like Mind Medicine.
Additionally, the company already has a range of projects in the pipeline and a cash balance of $161 million. Investors are optimistic on these developments, which are rooting out of the technology division. But what are the hindrances?
The potholes in the road
The company’s case has some very convincing arguments which are limiting its attractiveness. First off, the cash balance mentioned above doesn’t seem realistic to the expectations of trials lined up until 2024. But this is again subject to the expense estimate of management, which can or cannot change in the times ahead. Secondly, in three years the company could face different kinds of challenges, which haven’t been talked about yet. From the statistical point of view, psychopharmacology success in the phase 2 trials is just about 24%, and the chance of leveling up to phase 3 seems a little unachievable.
The speculative stock
The endpoint is that despite an interesting pipeline and a potentially rising mental health industry, the company needs to find its way out of these obstacles. Jumping off the potholes and putting them off can help it tap into the advancement of pace in the near future. Until then, it will continue to remain a stock under the speculative radar.