Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of MindMed Dropped 13% in May

By Alex Carchidi - Jun 9, 2021 at 3:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Froth from its uplisting is having an impact.

What happened

Shares of the aspiring psychedelic therapy maker Mind Medicine (MNMD 12.32%) slipped 13% last month, according to data provided by S&P Global Market Intelligence. Given that there wasn't any bad news or a negative reaction to its first-quarter earnings report in the middle of the month, it's likely that the drop was caused by the stock cooling off from its energetic debut on the Nasdaq Stock Market in late April.

So what

Mind Medicine is one of just a few publicly traded companies that are pioneering the use of carefully controlled psychedelic chemicals to treat mental illnesses. Its current projects include a pair of phase 2 clinical trials examining the efficacy of drugs like LSD on conditions like anxiety and adult attention deficit hyperactivity disorder (ADHD). Whereas in the past such research might have been heavily restricted, consistently positive results from preliminary investigations are leading to a growing acceptance of the merit of these therapies.

A person looks at a page of a book with an expression of consternation.

Image source: Getty Images.

While it was traded on the over the counter (OTC) markets and the NEO stock exchange prior to last month, May was the first full month of Mind Medicine's stock trading on the Nasdaq. That's important, as being listed on the Nasdaq will open the door to new investors and future opportunities to raise capital by issuing new stock. But the uplisting clearly didn't catalyze the growth that some investors were hoping for. That shouldn't be much of a problem in the long term, provided that its clinical trials can show that its therapies are safe and effective. 

Now what

Regardless of the drop in its stock price, Mind Medicine is proceeding the same as before, advancing with its therapy projects while undergoing key technology development. On May 26, it published a new study that conclusively linked a patient's genetics with how they metabolize LSD. This research paves the way for the company to pursue future work that could eventually lead to its long-standing goal of being able to offer individualized dosing of the drug. With individualized dosing informed by genetic testing, patients would likely experience better outcomes from the psychedelic therapy.

Still, Mind Medicine has a long way to go before its therapies could ever reach the market, so prospective investors should stay tuned.

Alex Carchidi owns shares of Mind Medicine (MindMed) Inc. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Mind Medicine (MindMed) Inc. Stock Quote
Mind Medicine (MindMed) Inc.
$0.65 (12.32%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.