MindMed (MNMD stock) announces first dosing of LSD drug in phase 2b trial

MindMed (MNMD) announced early Thursday that it had begun its phase 2b trial for its Generalized Anxiety Disorder (GAD) drug MM-120. Shares of the psychedelic biotech star remained flat, however, at $0.87.

MindMed stock news

The MM-120 drug utilizes a form of LSD (lysergic acid diethylamide) to treat patients with brain disorders. The current trial is meant to find the optimal dosage for patients.

MNMD shares entered the news last week and led to a surge in the stock price when USC student Jake Freeman, who achieved overnight fame after profiting some $110 million on Bed Bath & Beyond's (BBBY) meme stock surge, said he was working in tandem with his uncle to build a position in MNMD shares. His uncle, Dr. Scott Freeman, was one of the founders of a company that was acquired a decade ago by MindMed and then became the latter's chief medical officer for a year. The elder Freeman said he thought the company should push stronger for a stage 3 trial with the Food & Drug Administration (FDA).

"The initiation of our Phase 2b clinical trial, the largest well-controlled clinical trial of LSD ever conducted, represents a major milestone for MindMed and for the many patients suffering from GAD," said Robert Barrow, CEO of MindMed.

"This exciting next step in the advancement of LSD builds on the positive topline data presented by our partners at University Hospital Basel in May 2022, which demonstrated the rapid, durable, and statistically significant effects of LSD and its potential to safely mitigate symptoms of anxiety and depression. The results of our Phase 2b trial will guide the dose selection and development strategy for our pivotal Phase 3 clinical trials, as we continue our efforts to bring a new potential treatment to the millions of people living with GAD."

MindMed stock forecast

MNMD stock gained 9.1% on Wednesday after completing a quick swing high that began last Thursday. That session saw a 36% gain followed by a -17% loss on Friday. Earlier this week MNMD appears to have found support around $0.77. Another gyration could send MNMD back to Thursday's resistance zone between $1.19 and $133.

Last week's swing high demonstrated the ability to overtake early June's recent swing high, but the rapid sell-off may have scared away a large swath of penny stock traders. One good sign is that MindMed stock remains above the 9-day moving average, so this rally may not have given up yet.

MNMD daily chart