FCM MM Holdings, LLC (“FCM”), published an open letter to the
shareholders of Mind Medicine (MindMed) Inc. (NASDAQ: MNMD)
(“MindMed”, the “Company”) from MindMed’s co-founder Dr. Scott
Freeman. The letter highlights Dr. Freeman’s prediction that a
revolution in psychedelic medicine will likely occur by the end of
2024, heralded by the FDA’s likely approval of Multidisciplinary
Association for Psychedelic Studies’ (“MAPS”) drug, MDMA, for
post-traumatic stress disorder (PTSD).
Dr. Freeman emphasizes his belief that for
MindMed to be able to fully participate in the coming psychedelic
medicine revolution it must have a healthy balance sheet. FCM
believes that by cutting costs and doubling-down MindMed’s
investment in its flagship drug LSD (MM-120) this is achievable.
FCM’s director candidates will work to place MindMed as the market
leader in psychedelic medicine in 2024, ahead of the other
competitor companies like Compass, ATAI, and GH Research. FCM’s
director candidates have the expertise, experience, and leadership
skills to take advantage of this tidal wave of change and help
ensure MindMed is positioned for future success in the years to
come.
The full text of Dr. Freeman’s letter is
available here and below:
Dear Fellow MindMed
Shareholders,
A revolution in the psychedelic sector seems
imminent and I strongly believe that MindMed needs to be ready to
capitalize on this groundbreaking opportunity. The
Multidisciplinary Association for Psychedelic Studies (“MAPS”) is
reportedly preparing to submit MDMA to the FDA by the end of 2023
and based on their published results that I have reviewed, I
believe that MDMA will likely be approved by the FDA for the
treatment of post-traumatic stress disorder (PTSD) in the second
half of 2024. It is critical that MindMed be fully prepared to be
part of this revolution and the increased potential value and
opportunities in the psychedelic industry.
Under FCM’s plan, our director candidates will
work to position MindMed as the market leader in psychedelic
medicine, as companies like Compass and ATAI will likely also
swiftly move to benefit from the increased interest and attention
for psychedelic medicine should MDMA be approved in late 2024. I
strongly believe that the FDA’s potential approval of MDMA will
help open the door to bring LSD compounds, like MM-120, to millions
of people with mental health disorders, which in turn will help
establish MindMed’s market leadership. This is why I
founded MindMed and why you invested.
I believe MindMed has an incredible opportunity
to be well positioned for success, however its current management
appears to be jeopardizing the Company’s future with excessive
spending, outsized compensation, a botched regulatory strategy, and
delayed clinical trials. MindMed has approximately $130 million of
cash available, which we believe is enough capital to support the
Company for at least three years if it were to focus its efforts on
MM-120, MindMed’s flagship drug, and make sorely needed cost
reductions. However, sell-side analysts are predicting that under
the Company’s current clinical development path, along with other
unnecessary spending, the Company’s cash will run out in 2024, and
to survive MindMed will be forced to raise additional equity
capital, resulting in the further dilution of existing
shareholders. In our view, this will be a severe blow to MindMed at
the most inopportune time; just before the likely FDA approval of
MDMA and the beginnings of the psychedelic medicine revolution.
There is a path forward to right the
ship and unlock MindMed’s true potential. FCM’s plan will
cut general and administrative costs, mostly in the form of excess
personnel and wasteful spending, and increase spending on MindMed’s
core drug, MM-120. I have personally worked in biotechnology for 25
years and have developed drugs in “lean” times by making the
company highly efficient. In my experience, this is achievable by
completing ALL the important clinical work through contract
research organizations, while minimizing company employees to just
generally providing oversight of these efforts.
Based on my experience, MindMed’s aggregate
spending is bloated at $66 million in 2022. In contrast, FCM has
budgeted an estimated $39 million in annual operating expenses by
keeping MindMed lean and efficient. This would help ensure that the
Company has enough cash to start a Phase III study in 2023 (which
we estimate the study can be completed by 2026). Additionally, our
plan also calls for pursuing the FDA’s accelerated approval
pathway, which would allow LSD to be commercialized by 2026.
If MindMed management contends otherwise, we believe it is
likely because they have never successfully brought a drug to
market, executed a Phase III study, or used the FDA accelerated
approval pathway.
We strongly believe that MindMed needs the right
leadership to get back on track and properly position itself for
the future. In our view, MindMed has lost its way and shareholders
cannot afford for MindMed to waste the amazing opportunity we have
ALL dreamed about for years. We believe MindMed’s future starts
with being true to its original vision to get LSD approved by the
FDA for the benefit of millions with mental health disorders.
We urge shareholders to help put MindMed back on
track by voting FOR the FCM director candidates
who have confidence in their plan to drive shareholder value and
are committed to putting you first. Do your part to turn MindMed
around and vote the BLUE proxy card for Scott
Freeman, Farzin Farzaneh, Vivek Jain and Alexander Wodka today.
Sincerely
/s/ Scott Freeman
Scott Freeman, MD
Shareholder Contact:
Okapi Partners LLCinfo@okapipartners.com (855)
305-0856
Media:
Riyaz Lalani & Dan Gagnier Gagnier
Communications fcmmm@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.
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