FCM MM Holdings, LLC ("FCM"), which together with its affiliates
beneficially owns 1,368,538 common shares of Mind Medicine
(MindMed) Inc. (NASDAQ: MNMD) (“MindMed” or the “Company”),
representing approximately 3.5% of the outstanding common shares of
the Company, today announced that it has analyzed each of the 63
Central Nervous System (“CNS”) drugs approved by the U.S. Food and
Drug Administration (the “FDA”) in the last decadei and concluded
that MindMed Chief Executive Officer Robert Barrow’s claim that a
Phase IIb of MM-120 is required by the FDA is categorically
incorrect. In its analysis, FCM determined that 66% of the CNS
drugs did not perform a Phase IIbii and 22% skipped Phase IIiii
altogether. FCM’s comprehensive study demonstrates that
the
industry gold standard for CNS drugs is to perform dose finding in
Phase III, a strategy FCM has been advocating that MindMed pursue
for MM-120 for close to a year.
“The stark disparity between MindMed’s approach
on MM-120 and every other approved CNS drug in the past decade is
perplexing,” said Dr. Scott Freeman, co-founder and formerly
MindMed’s Chief Medical Officer. “MM-120 is well characterized.
This is a perfect example of a situation where bypassing a Phase
IIb study and performing a Phase III dose finding study to save
time and money is possible, since the only question is whether 50
μg or 100 μg of MM-120 is the lowest effective dose. In our view,
Mr. Barrow’s contention that the FDA requires a Phase IIb study
demonstrates a complete lack of understanding of the drug
development process. Our approach would be to follow the industry
gold standard, which is to pursue a Phase III dose finding study, a
strategy that companies like AbbVie, Pfizer, and Amgeniv have
successfully used to get CNS drugs FDA approved,” added Dr.
Freeman.
MindMed’s Misguided Approach to Drug
Development
Drawing from a comprehensive data analysis and
leveraging the expertise of its nominees, FCM contends that a
Phase III study is not just viable but urgently needed and
should be initiated immediately.
Regrettably, FCM believes the ongoing operations of MindMed are
mired in an ill-conceived, persistently delayed, and technically
unsound Phase IIb dose finding study, much to shareholders'
detriment. In FCM’s view, MindMed’s current approach is largely due
to CEO Robert Barrow’s, CMO Danial Karlin’s, and MindMed academic
collaborator Dr. Liechti's erroneous belief that the FDA mandates a
Phase IIb study. Notably, unlike Dr. Freeman, none of these
individuals possess the experience of successfully completing a
Phase IIb or Phase III study, nor have they ever brought a drug to
market.
The FDA’s primary goal for drug approval is
safety and efficacy and to that end, finding the lowest effective
dose for drug approval is requiredv. However, the FDA has no
requirement on how a company should determine the lowest effective
dosevi. FCM has reviewed 63 CNS drug approvals in the last decade
advanced by experienced management teams. FCM found that 21 were
major market mental health drugsvii like MM-120 and determined that
57% did not perform a Phase IIb study as part of their regulatory
approval strategy.
FCM’s analysis has not found any company that
has embarked on a non-pivotal Phase IIb study following a
successful Phase II study, as MindMed is doing. As a result, FCM
believes that MindMed management’s current development strategy for
MM-120 is completely misguided.
FCM has proposed that MindMed follow the
industry gold standard approach for CNS drug development: a Phase
III dose finding study.
MM-120 has Phase I safety and efficacy data and
three randomized Phase II studies showing efficacy in generalized
anxiety disorder (“GAD”) and major depressive disorder (“MDD”) to
support a Phase III dose finding study. FCM believes that MindMed
management’s failure to make appropriate use of these strong
results is consistent with MindMed management’s lack of clinical
development expertise, as highlighted by the botched MM-110
program. That program was ultimately shuttered because MindMed
performed a phase I clinical trial without first obtaining the
safety data required by the FDA, thus wasting tens of millions of
dollars and potentially jeopardizing patient safety.
Further, MindMed also appears to be
significantly behind schedule in its MM-120 Phase IIb trial as
evidenced by their repeated failure to disclose patient enrollment
which is scheduled to end in just three months. Had MindMed
been even remotely close to on schedule, logic dictates that they
would have released enrollment numbers.
Unfortunately, neither Mr. Barrow nor Dr. Karlin
have the requisite regulatory experience to bring MM-120 to market
safely and efficiently. Barrow’s background is drawn from his
experience as an administrator for a company developing topical
gels, while Karlin’s background is in bioinformatics.
FCM’s Plan to Put Clinical Development
Back on Track
FCM is working tirelessly to position MindMed
for success should its director nominees be elected. To that end,
FCM is pleased to announce that Dr. Freeman has drafted a 77-page
Phase III protocol (the “GAD Phase III”) to treat GAD using MM-120
and a plan to start the Phase III trial in 2023.
The GAD Phase III leverages industry best
practices and data from Dr. Liechti, who has performed two
randomized Phase II studies with LSD in GAD. Dr. Liechti’s work has
shown that MM-120 is effective but has tolerability issues at a
dose of 200 µg while a dose of 100 µg is effective and safe.
Additionally, Dr. Liechti showed that 25 µg of MM-120 is
ineffective. The FDA routinely allows these types of
investigator studies to support clinical development programs and
has even approved drugs solely based on investigator-initiated
trials. The GAD Phase III is designed to answer whether
the lowest effective dose is 50 µg or 100 µg.
The GAD Phase III dose finding study could be
accomplished using a simple three-arm, two dose Phase III dose
finding design:
Arm |
Dosage |
Intervention Type |
Arm I |
25 µg |
Active Comparator |
Arm II |
50 µg |
Low Dose |
Arm III |
100 µg |
High Dose |
If FCM’s nominees are elected at the 2023 annual
meeting of MindMed shareholders, they would take the steps
necessary for MindMed to initiate a meeting with the FDA in October
2023, and then begin dosing the first patient in a Phase III trial
in December 2023. Unlike the current Board and management team,
FCM’s nominees are committed to making MindMed transparent in its
communications about the Company’s clinical development plan, key
milestones, and progress. FCM’s nominees will work with management
to inform, educate, and be accountable to shareholders on the
clinical development process, including public townhalls and
Q&A sessions with management.
Vote the BLUE
Proxy to Support FCM’s Plan to Restore Value for All
Shareholders
Time is running out on MindMed’s failing
clinical development strategy. Sell-side analysts at RBC, Maxim
Group, and Cantor Fitzgerald currently project that
MindMed’s share count will skyrocket between 50-100% in the next 18
months and that MindMed’s current cash will be exhausted by
2024viii; rather than mid-2025 as Barrow touted just a few
days agoix. Each analyst projects MindMed’s spending to be over
$180M, which when factoring in non-cash items results in a cash
burn of approximately $159Mx, which is greater than MindMed’s cash
on hand of $142M at the start of FY2023. MindMed’s drug development
process must be put back on track to avoid squandering additional
shareholder capital.
Firm |
Share Count FY2024 |
Spending in FY2023, 2024 |
Maxim Group |
>56M |
$186M |
RBC |
60M |
$182M |
Cantor Fitzgerald |
76M |
$184M |
Shareholders are invited to read about FCM’s
plan to restore shareholder value by reviewing a letter it released
to fellow shareholders available here.
FCM urges MindMed shareholders to join the fight
against the current Board and management team and
vote FOR all four of its highly
qualified nominees at the 2023 annual general meeting of
shareholders on the BLUE proxy card.
Shareholders who have questions or
require any assistance with their vote, please contact Okapi
Partners LLC, at (855) 305-0856 or
info@okapipartners.com.
About FCM
FCM MM Holdings, LLC is a special purpose
vehicle set-up to represent certain early investors in MindMed,
including Dr. Scott Freeman and Mr. Chad Boulanger. FCM is managed
by Mr. Jake Freeman and each of FCM’s stakeholders is deeply
invested in MindMed's long-term success.
Shareholder Contact:
Okapi Partners LLCinfo@okapipartners.com(855) 305-0856
Media:
Riyaz Lalani & Dan GagnierGagnier
Communicationsfcmmm@gagnierfc.com
Additional Information
FCM's and its nominees (Dr. Scott Freeman, Dr. Farzin Farzaneh,
Mr. Vivek Jain, and Mr. Alexander Wodka) beneficially own, own,
control or exercise direction over an aggregate of 1,009,181 common
shares of MindMed (the “Shares”). FCM may be deemed to control an
additional 359,357 Shares pursuant to a proxy coordination
agreement.
Information in Support of Public Broadcast Solicitation
Shareholders are being asked at this time to execute a proxy in
favour of FCM's nominees for election to the Board at the AGM or
any other resolutions at the AGM, which has been formally scheduled
for June 15, 2023. In connection with the AGM, FCM has filed
definitive proxy materials with the Securities and Exchange
Commission (the "Final FCM Circular") containing further disclosure
concerning FCM's nominees for election to the Board at the AGM,
together with additional details concerning the completion and
return of forms of proxy and voting information forms ("VIFs") for
use at the AGM. Shareholders of MindMed are urged to read the
Materials filed today as well as the Final FCM Circular, when
issued, because they will contain important information.
The below disclosure is provided pursuant to section 9.2(4)
of National Instrument 51-102 – Continuous Disclosure
Obligations in accordance with securities laws applicable to
public broadcast solicitations.
This press release and any solicitation made by FCM in advance
of the AGM is, or will be, as applicable, made by FCM and not by or
on behalf of the management of MindMed.
Shareholders of MindMed are being asked at this time to execute
proxies in favour of FCM's nominees for election to the Board at
the AGM or any other matters to be considered at the AGM. FCM has
issued the Final FCM Circular and FCM intends to make its
solicitation primarily by mail, but proxies may also be solicited
personally by telephone, email or other electronic means, as well
as by newspaper or other media advertising or in person, by FCM,
certain of its members, partners, directors, officers and
employees, FCM's nominees or FCM's agents, including Okapi Partners
LLC (“Okapi”), which has been retained by FCM as its strategic
shareholder advisor and proxy solicitation agent. Pursuant to the
agreement between Okapi and FCM, Okapi will receive a fee of up to
$75,000, plus customary fees for each call to or from shareholders
of MindMed, and will be reimbursed for certain out-of-pocket
expenses, with all such costs to be borne by FCM. In addition, FCM
may solicit proxies in reliance upon the public broadcast exemption
to the solicitation requirements under applicable Canadian
corporate and securities laws, by way of public broadcast,
including press release, speech or publication, and in any other
manner permitted under applicable Canadian laws. Any members,
partners, directors, officers or employees of FCM and their
affiliates or other persons who solicit proxies on behalf of FCM
will do so for no additional compensation. The anticipated cost of
FCM’s solicitation is estimated to be $400,000 plus disbursements.
The costs incurred in the preparation and mailing of the Materials
and the Final FCM Circular, and the solicitation of proxies by FCM
will be borne by FCM, provided that, subject to applicable law, FCM
may seek reimbursement from MindMed of FCM's out-of-pocket
expenses, including proxy solicitation expenses and legal fees,
incurred in connection with a successful reconstitution of the
Board.
A registered shareholder of MindMed who has given a proxy may
revoke the proxy at any time prior to use by:
(a) depositing an instrument in writing revoking the proxy, if
the shareholder is an individual signed by the shareholder or his
or her legal personal representative or trustee in bankruptcy, and
if the shareholder is a corporation signed by the corporation or by
a representative appointed for the corporation, either: (i) at the
registered office of MindMed at any time up to and including the
last business day preceding the day of the AGM or any
adjournment(s) thereof, at One World Trade Center, Suite 8500, New
York, New York 10007; or (ii) with the chairman of the AGM on the
day of the AGM or any adjournment(s) thereof before any vote in
respect of which the proxy has been given has been taken; or
(b) revoking the proxy in any other manner permitted by law.
A non-registered shareholder may revoke a form of proxy or VIF
given to an intermediary or Broadridge Investor Communications (or
any such other service company) at any time by submitting another
properly completed form of proxy or VIF, as the latest form of
proxy or VIF will automatically revoke any previous one already
submitted, or by written notice to the intermediary in accordance
with the instructions given to the non-registered shareholder by
its intermediary.
Neither FCM, nor any of its directors or officers, or any
associates or affiliates of the foregoing, nor any of FCM's
nominees for election to the Board at the AGM, or their respective
associates or affiliates, has: (i) any material interest, direct or
indirect, in any transaction since the beginning of MindMed's most
recently completed financial year or in any proposed transaction
that has materially affected or would materially affect MindMed or
any of its subsidiaries; or (ii) any material interest, direct or
indirect, by way of beneficial ownership of securities or
otherwise, in any matter currently known to be acted on at the
upcoming meeting of MindMed shareholders, other than the election
of directors; except that on August 31, 2020, Dr. Scott Freeman
entered into a consulting agreement with MindMed, which, among
other things, granted Dr. Scott Freeman 26,389 vested options with
a strike price of CAD$4.95 per share and 16,667 unvested options
with a strike price of CAD$4.95 per share.
The registered address of MindMed is located at One World Trade
Center, Suite 8500, New York, New York, 10007. A copy
of this press release may be obtained on MindMed’s SEDAR profile
at www.sedar.com.
_____________________________
i Based on FDA drug approvals from 2012 to April 2023 for new
molecules. The full data set is available at
https://mindmed.zone/clinical-trial-data which describes the
various drugs classified as CNS drugs.ii Phase IIb is not a
technically defined term; however, the analysis utilized the
following criterion for classifying a trial as a Phase IIb: (1) the
trial was a Phase II or Phase I/II per the trial’s description on
ClinicalTrials.gov, (2) the trial either described itself as a
Phase IIb, a dose finding study, dose optimization study, or had
more than three unique dosing schedules tested across its
experimental arms (one dosing schedule per arm), (3) it had a
primary endpoint that was not a biomarker, and (4) the primary
completion of the study occurred prior to the application of new
drug approval. For avoidance of doubt, a Phase II/III study is not
classified as a Phase II or Phase IIb study.iii Phase IIa studies
were not counted as completing Phase II. Additionally, the Phase II
study had to be in an indication related to the approved indication
as well as had the primary completion date before the submission of
the new drug application to the FDA.iv See Pfizer and Zavzpret,
AbbVie and Qulipta (note that although AbbVie describes one of its
Phase III trials as a Phase IIb/III trial in its press releases, in
its filings the FDA it is described as a Phase III), Amgen and
Aimovig.v See FDA Guideline for Industry: Dose-Response Information
to Support Drug Registration.vi Id.; 21 CFR 314.126vii Major market
mental health drugs were CNS drugs (see supra at 1) that treated
the following symptoms: depression, insomnia, schizophrenia,
addiction, migraine, and attention deficit hyperactivity
disorder.viii Data from Refinitiv; Total spending is pro-rata
adjusted for MindMed’s historical non-cash items to determine cash
burn. ix See May 4, 2023, MindMed analyst call.x Based on pro-rata
adjustment for non-cash expenses in FY2022.
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