- MindMed(MNMD) briefly doubled overnight on rumors of a short squeeze.
- The company is testing LSD to treat symptoms of ADHD, anxiety and other conditions.
- The drug is still in its Phase 2 study and a long way from the market.
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Penny stockMind Medicine(NASDAQ:MNMD) stock nearly doubled overnight on rumors of a short squeeze.
Shares that opened at 68 cents early on Aug. 17 were trading at $1.16 before the market opened on Aug. 18, after trading as high as $1.40 earlier in the morning.
The move comes as the company prepares for a1-for-15 reverse stock split. After the split, there will be 28.4 million shares outstanding.
MNMD Stock: Behind the News
MindMedis researching the use of psychedelics for treatment of anxiety, pain, substance abuse and autism. It has a pipeline of drug candidates, but none are on the market currently. The companylost $17 million in the second quarter, 4 cents a share. It had about $105 million in cash on the books at the end of the quarter.
The stock is being helped by a decision from Cantor Fitzgerald to launch coverage with a price target of$3 per sharepre-split. The decision was shared onReddit, where traders urged others to“bring it back up where it should be.”
The Cantor call is based on hope that MM-120, now in Phase 2 trials, could prove effective against ADHD and generalized anxiety. The drug is anLSD D-tartrate, a version of the 1960s psychedelic still listed as a Schedule 1 drug. The company is also studying LSD for cluster headaches and major depression.
While success would help a lot of people, there are no guarantees. A Phase 2 study will only show whether a treatment works. A Phase 3 study is still needed to show it’s bothsafe and more effectivethan standard treatments.
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