Mind Medicine (NASDAQ:MNMD) is a buzz-worthy biotech company. While many firms in this sector have been wowing investors with Covid-19 vaccines, treatments and tests, MindMed is something very different, which makes MNMD stock worth considering.
The New York-based company is focused on treating mental health issues. And it’s doing so with therapies and treatments that use microdosing of psychedelic drugs including LSD, MDMA and psilocybin mushrooms. It’s cutting edge and controversial. There is also real potential for MNMD stock to deliver serious long-term growth.
The story so far for MNMD stock has been one of volatility. Over the past year, shares in this “A” rated Portfolio Grader company have delivered a return of around 1000%. However, 2021 has been tumultuous. The company gained a Nasdaq listing on April 27. There was a huge spike in the lead-up to that moment, followed by a drop from which it has yet to fully recover.
Despite that volatility, MNMD is still up roughly 25% so far in 2021. But it’s the long term that potential investors should be looking at, and MindMed looks good in that respect.
Mental Wellness and MNMD Stock
MindMed’s focus is on mental wellness. Its current trials and research cover anxiety, addiction, and adult ADHD. The market for mental wellness treatments is huge. In 2020, the Global Wellness Institute pegged the value of the market at $121 billion. That covers a lot more conditions than the “A”s that MindMed is working on, but it gives you a pretty good idea. The company’s approach may be niche, but the conditions it is trying to treat are anything but.
A 2021 report by Fortune Business Insights gives a more specific look at MindMed’s addressable market. In 2019, the global market for anxiety disorders and depression was $8.5 billion and growing. In 2020, it shot up by 28.2%. That leads me to my next point: the Covid-19 effect.
The Pandemic’s Spike in Mental Health Issues
MindMed may not be working on a Covid-19 treatment or vaccine like so many other high-flying biotech companies. However, its treatments are applicable to one of the pandemic’s biggest impacts: mental health.
People are feeling the impact of being in varying degrees of lockdown for over a year. Many have been isolated from friends and family. In addition, now that we are beginning to see a return to normalcy, many people are feeling anxious about returning to offices and riding crowded public transit. That’s an effect of the pandemic that may be long-lasting.
The U.S. Census Bureau conducted a survey in December. It found that 42% of adults reported symptoms of anxiety or depression. A previous survey (done between January and June of 2019) found 11% of U.S. adults reporting symptoms.
Harvard Medical School clinical psychologist Luana Marques commented on the survey results to NPR, saying “I don’t think this is going to go back to baseline anytime soon.”
In addition, a UK study found that those who actually contracted and recovered from Covid-19 have double the chance of developing a mental health issue afterward. Thanks to the pandemic, MNMD stock is going to benefit from having the potential market for its anxiety treatments suddenly get a long-lasting boost.
Science Embracing Microdosing Psychedelics
Psychedelic drugs like those MindMed is working with are nothing new. They have also been extremely controversial. In the 1970s, Harvard psychologist and LSD advocate Timothy Leary was called “the most dangerous man in America” by President Nixon.
In recent years, there has been a resurgence of interest in psychedelic drugs, using microdosing to treat mental wellness issues. The approach is giving treatments like those being developed by MindMed a new degree of legitimacy.
In 2018, author and journalist Michael Pollan told Time about the potential for MDMA and Psilocybin micro-dosing as a treatment:
The biggest misconception people have about psychedelics is that these are drugs that make you crazy. We now have evidence that that does happen sometimes — but in many more cases, these are drugs that can make you sane.
A 2017 study reported in the University of Toronto News found that the biggest drawback to microdosing was having to obtain psychedelic drugs from the black market. This resulted in safety and reliability issues. Having LSD, MDMA, and psilocybin-based treatments available from MindMed would eliminate this issue.
Bottom Line for MNMD Stock
MNMD stock isn’t without risk. After all this is a company that has yet to hit the production stage.
However, it has multiple psychedelic-inspired medicines and therapies in clinical trials, and substantial cash on hand ($160 million as of its May 14 Q1 results) to get them to production. At that point, the potential market for MindMed’s treatments is huge and only growing larger as the pandemic’s effects continue. At this point MNMD stock is well worth considering. It’s an inexpensive biotech play that offers real long-term growth potential.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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