Shares of Clearmind Medicine (NASDAQ:CMND) stock, which aims to use psychedelics to treat mental health, jumped overnight. This after it completed a meeting with the Food and Drug Administration (FDA) on its trial of a compound to treat Alcohol Use Disorder.
Shares were trading at $3.54 in the pre-market. But it’s important to note that Clearmind’s market capitalization increased to only $6 million, which clearly puts this in penny stock territory.
Since the market opened, CMND stock has been trading at about $3 and a bit over 40% up.
The FDA meeting is called a “Type A” meeting. This type of meeting is meant to provide a path for clinical studies of new drugs whose development has stalled.
Clearmind’s Critical Path
Clearmind has been working with an Israeli company, SciSparc (NASDAQ:SPRC), on a range of psychiatric treatments, the two companies say. Clearmind filed for six patents early in 2023, covering combinations of LSD, psilocybin, and other drugs to treat mental health disorders.
The Type A meeting discussed CMND-1000, whose active ingredient is 5-Methoxy-2-aminoindane (MEAI). The drug is called a “binge mitigating agent” and has been shown to safely reduce the desire to consume alcohol in rats.
Last month, Clearmind said a study of the same compound found it reduced cocaine addiction, again using rats. The two companies have also done a pre-clinical study of MEAI, combined with another compound, aimed at a weight loss treatment.
Many researchers have been working on psychedelics as treatments in recent years. Stanford has looked at the compounds to treat Post Traumatic Stress Disorder (PTSD). Duke neuroscientists have studied how the drugs work using fish.
Investors are backing a wide range of psychedelics to treat a wide range of diseases. MindMed (NASDAQ:MNMD) sees LSD as a treatment for anxiety. There is even a political action committee (PAC) backing the movement.
CMND Stock: What Happens Next?
The use of psychedelic drugs against mental health issues is a coming trend. Clearmind is just one of many speculative investments in the market.
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As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
