Drugmaker MindMed (MNMD) underwhelmed investors during its Nasdaq debut. It is only the second psychedelic biotech company to go public on Nasdaq after the British company Compass Pathways’ (CMPS) launched its IPO this September. Another drugmaker, ATAI Life Sciences, has also filed for an IPO and is expected to go public soon.

Despite strong expectations, MindMed shares dropped 29% on opening day at the Nasdaq but rallied to 65% the next day. Meanwhile, shares were up 33% on the OTCQB market. Aside from the Nasdaq, MindMed shares continue to trade overseas in Germany (MMQ) and Canada (MMED) as well.

“Very early innings”

Despite the rather lukewarm opening, however, MindMed CEO and co-founder JR Rahn remains optimistic. 

In a Yahoo Finance Live interview, Rahn said that the company’s performance in the Nasdaq is still “very early innings” and maintained that they are unbothered by daily stock fluctuations on the market. Rahn adds that they are more reliant on their “very mission-driven” shareholders, who number 180,000 as of writing.

Given its humble stature last year, MindMed’s graduation to the Nasdaq is a nod not only to the company but to the psychedelics drug industry. Rahn offered that MindMed’s performance is proof of investor interest and confidence in psychedelics as a treatment for addiction as well as mental health disorders. 

Not only is the psychedelics industry “growing up”, but it is “accessing a whole new fresh set of investors” previously inaccessible to the sector. Among these new investors include retail, pension funds, and sovereign wealth funds.

MindMed gained traction with prominent investors like Shark Tank’s Kevin O’Leary and ex-CEO of Canopy Growth Bruce Linton. It is zeroing on treating mental health disorders that utilize LSD, MDMA, and psilocybin, more commonly known as “magic mushrooms.” 

Rapid growth of the psychedelics industry

As part of its evolution, MindMed is planning on undertaking clinical trials for such substances in the hopes of bringing them into the mainstream, going through the FDA process. 

Several factors can account for the industry’s growth, among them state legislation that legalized psilocybin for medical use. Oregon pioneered the move, while Denver, Washington, D.C., and Ann Arbor, Mich. have decriminalized its use.

Rahn also attributes the sector’s leaps to societal focus on mental health. As more and more investors are recognizing and accepting the need to diversify treatment options for disorders such as anxiety and depression, MindMed’s shares have gone “to the moon.” 

WallStreetBets, the day traders responsible for Gamestop’s high-flying stocks, has also endorsed MindMed on Reddit. The company considers this a very welcome development and appreciates how the Reddit audience is sitting up and paying attention.

Development company on the rise

MindMed is transforming into a tech slash drug development company. It bought the therapeutics and digital medicine startup HealthMode for $32.5 million in February. The company also utilizes AI to boost its drug development efforts. For this, it has hired AI specialist and HealthMode founder Bradford Cross as MindMed’s chief technology officer.

Rahn explained that their vision is to develop the technology needed for efficient and scalable psychedelic-assisted therapy. If this tech becomes available in the years to come, it can assist therapists in scaling these alternative solutions to treat mental health disorders.

To MindMed, at the end of the day, people make markets. Therefore, underwhelming Nasdaq debut aside, Rahn is confident that clamor for psychedelic drugs and therapies will only go up. There is a public outcry to see visible and concrete solutions for mental health and several “empowered and passionate” shareholders who are willing to invest in such solutions.