MindMed’s (MNMD) Nasdaq debut Tuesday made it the second psychedelic drug developer to be listed on a major U.S. stock exchange. UK-based Compass Pathways (CMPS) went public on the Nasdaq in September, while last week Peter Thiel-backed ATAI Life Sciences filed for an IPO.
Just a year ago, New York-based MindMed was a penny stock on the over-the-counter market.
Shares fell 29% in their first day of trading on the Nasdaq, but that’s after they ran up 65% Friday and 33% Monday on the OTCQB market in anticipation of the up-listing. The stock continues to trade on Canada’s NEO Exchange (MMED) and in Germany (MMQ).
“These are still very early innings for us,” MindMed’s co-founder and CEO JR Rahn told Yahoo Finance Live. “We’re not going to be dictated by the day-to-day fluctuations or hour-by-hour fluctuations of our stock. We have 180,000 shareholders. A lot of them are very mission driven.”
Rahn said graduating to the Nasdaq is a major milestone not just for his company, but for the industry, signaling a rapid shift in investor interest for psychedelics to treat addiction and mental health disorders such as anxiety and depression.
“I think it’s a sign that the entire psychedelics industry is growing up,” he said. “We’re accessing a whole new fresh set of investors that hasn’t been able to access us before. I think that’s going to include sovereign wealth funds, pension funds and further retail investors.”
MindMed, whose high-profile investors include “Shark Tank’s” Kevin O’Leary and Bruce Linton, former CEO of cannabis company Canopy Growth (CGC), is focused on improving mental health with treatments that use ingredients including MDMA, LSD, and psilocybin, also known as “magic mushrooms.”
“Our objective over the next few years is to conduct clinical trials on psychedelic substances like LSD, MDMA and others, and ultimately bring those to market,” he said. “To do that, you have to do it through the FDA pathway.”
The industry made great strides in 2020 in removing barriers to legalization. In November, Oregon became the first state to legalize the medical use of psilocybin, and several cities have decriminalized its use including Denver, Ann Arbor, Mich., and Washington, D.C.
In February, MindMed bought the digital medicine and therapeutics startup HealthMode for $32.5 million in cash and stock. The company uses artificial intelligence technology to speed up drug development. It also tapped HealthMode’s founder and former Google AI guru Bradford Cross as its chief technology officer.
“MindMed is as much a technology company as we are a drug development company,” said Rahn. “Because ultimately, psychedelic-assisted therapy, which requires therapists to administer, is going to need technologies that can help find therapists and scale these solutions to mental health. So we’re going to be building that tech over the next couple of years.”
Day traders on the Reddit forum, WallStreetBets, have been talking up MindMed, saying the stock is going “to the moon.” They said the same thing earlier this year about the “meme” stock Gamestop (GME), which shot up more than 2,000% in less than a month.
Rahn said he thinks it’s “great” that the Reddit crowd is paying attention.
“This is just a natural outcry from normal people that want to see a change in mental health, and suddenly, they can identify with something,” he said. “I love to have empowered and passionate shareholders. We’re very, very receptive and supportive. And you know, I think there’s been a lot of hype around WallStreetBets, and meme stocks, and all of these things. But at the end of the day, people make markets. And it’s great to have the people behind us.”
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.