Mind Medicine (MNMD 1.32%) is a clinical stage biotech company that's aiming to bring psychedelics and other compounds to market as forms of treatments for conditions including generalized anxiety disorder (GAD), major depressive disorder (MDD), and autism spectrum disorder (ASD). The business is still in a pre-revenue state and has a highly uncertain forward performance trajectory, but it's recently garnered an uptick in interest from investors thanks to encouraging clinical trial developments and indications that political and regulatory developments could give the company an easier path to commercialization.
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Owing in large part to its highly speculative outlook, Mind Medicine stock has seen periods of huge volatility over the last five years. Despite jumping roughly 35% over the last year of trading, the company's share price is actually down roughly 86% from its valuation high in the period.
However, Mind Medicine still delivered substantial returns over the last five years. While the stock underperformed the S&P 500 index's total return of roughly 91% over the stretch, it still posted an 87% return over the 12 months ended Aug. 8. If you had invested $1,000 in the stock five years ago and held on to your shares, the position would now be worth roughly $1,875.
Can Mind Medicine beat the market over the next five years?
Mind Medicine stock is a very risky investment, but it does have avenues to significantly outperform the S&P 500 index over the next five years. The lead treatment in Mind Medicine's pipeline is a modified form of Lysergide D-tartrate, a form of LSD.
While the idea of using psychedelics to treat anxiety and depressive disorders may seem unconventional, there is research that points to meaningful efficacy -- and Mind Medicine's early clinical results have supported continued research and trials. The company is set to release Phase III trial results for the treatment next year, and positive data could trigger the early stages of a strong run-up for the stock. Mind Medicine stock comes with a high risk profile, but shares could surge if the biotech specialist successfully brings a treatment to market.
