Mind Medicine (MindMed) Inc

F:MMQ

Earnings Call Transcript 2022-Q1

[Operator]

Good morning and welcome to the Mind Medicine First Quarter 2022 Financial Results and Corporate Update Conference Call. Currently, all participants are in a listen-only-mode. This call is being webcast live on the Investors and Media section of MindMed's website at mindmed.co and a recording will be available after the call.

For opening remarks, I would like to introduce Rob Barrow, CEO of MindMed. Please go ahead, sir.

[Rob Barrow, CEO]

Thank you, and good morning. I appreciate everyone joining us for our first quarter 2022 financial results and corporate update conference call. The press release reporting our financial results is available in the Investors and Media section of MindMed's website and our quarterly report on Form 10-Q for the year ended March 31, 2022 will be filed today with the Securities and Exchange Commission.

Joining me today is Dr. Daniel Karlin, our Chief Medical Officer; and Dr. Miri Halperin Wernli, our Executive President.

During today's call, we will be making certain forward-looking statements, including without limitation, statements about the potential, safety, efficacy and regulatory and clinical progress of our product candidate, financial projections and our future expectations, plans, partnerships and prospects. These statements are subject to various risks that are described in the filings made with the SEC, including the most recent Annual Report on Form 10-K. You are cautioned not to place undue reliance on these forward-looking statements which are made as of today, May 16, 2022.

MindMed disclaims any obligation to update such statements even if management views change.Before we dive into our program and corporate update, I would like to reemphasize our ambition to transform the treatment of brain health disorders by delivering on the therapeutic potential of psychedelics and other novel targets.

We are applying our pharmaceutical expertise to develop innovative therapies with the aim of generating rapid and sustained improvement in patient outcomes, with applicability to anxiety, addiction and even autism. This is more important now than ever.The good news is that there has been a significant expansion in research to treat these conditions, and MindMed is leading the way in this effort.

At MindMed, we are utilizing decades of research to accelerate and derisk our three lead drug candidates, MM-120, MM-110 and MM-402, along with other novel therapies.We're extremely pleased with the progress in transformational growth that continues to propel our business forward and position MindMed as a leader in developing novel therapies to treat brain health disorders.

I will now turn the call over to our Chief Medical Officer, Dr. Daniel Karlin, to provide additional updates on each of our development programs. Dan?

[Dan Karlin, Chief Medical Officer]

Thank you, Rob.

Our drug pipeline at MindMed includes exciting drug candidates that are either currently in or are nearing clinical trials. On this call, I will focus on the programs with the most near-term visibility and highlight upcoming milestones, starting with our lead drug candidate, MM-120.

MM-120 is a proprietary pharmaceutically optimized form of LSD that builds on extensive evidence of clinical benefit and mechanic rationale in psychiatry, pain and substance use disorders.The tolerability, pharmacokinetics and pharmacodynamics of LSD are well characterized with over 1,000 patients treated in clinical trials to date. Further, LSD has demonstrated the potential to provide rapid and sustained benefit after acute dosing.

We are developing MM-120 for the treatment of generalized anxiety disorder or GAD, attention deficit hyperactivity disorder or ADHD, and chronic pain. Beginning with our most advanced program, GAD is a debilitating mental health disorder that affects approximately 6% of U.S. adults in their lifetimes.Symptoms of GAD include excessive anxiety and worry that persists over six months that can lead to significant impairments in social, occupational and other functioning. There has been very little innovation focused on the treatment of GAD over the past several decades.

Last week, on May 11, Dr. Frederike Holze and Prof. Dr. Matthias Liechti, MindMed collaborators at the University Hospital Basel, UHB, presented results from the LSD-Assist Study, a Phase 2 placebo-controlled investigator-initiated trial of LSD in the treatment of anxiety disorders at London's PSYCH Symposium.

Preliminary topline safety and efficacy results for LSD in 46 patients with clinically significant anxiety demonstrated the significant, rapid, durable, and beneficial effects of LSD and potential to safely mitigate symptoms of anxiety and depression.

LSD at a dose of 200 micrograms resulted in significant and strong reductions of global State-Trait Anxiety Inventory, or STAI scores, 16 weeks after treatment in the -- between subject analysis with a statistically significant improvement from baseline compared to placebo.LSD was well tolerated. Only one serious adverse event was considered related to treatment and consisted of acute transient anxiety and delusions during an LSD session. There were no recorded instances of treatment-emergent suicide ideation with intent, suicidal behavior or intentional self-injury.

The trials conducted at two centers, UHD Liechti lab and the psychiatry practice of Dr. Peter Gasser. We believe the results from the LSD Assist-Study further support our critical development of MM-120 in GAD.

As a reminder, in January of this year, the FDA cleared our investigational new drug application, or IND, for our randomized Phase 2b dose optimization trial of MM-120 for the treatment of GAD.The trial plans to enroll a total of 200 participants who will receive a single administration of up to 200 micrograms of MM-120 or a placebo. The primary objective of this study is to determine the reduction in anxiety symptoms for up to 12 weeks after a single administration of MM-120 across five treatment arms.These events marked the start of the first large commercially sponsored study of LSD in more than 40 years. The results of this trial will guide the dose selection and development strategy for our pivotal Phase 3 clinical trials, as well as deepen our scientific understanding of the clinical effects of MM-120 and its underlying mechanisms of action.

With the study underway, we look forward to building on this momentum and progressing through the trial as quickly and efficiently as possible to address the unmet need of patients who suffer from GAD. In parallel, we continue to enroll patients for our Phase 2a proof-of-concept trial with MM-120 for the treatment of ADHD.

In addition to our ongoing Phase 2 study for MM-120 in GAD and ADHD, we are currently advancing our strategic plans for MM-120 in the treatment of chronic pain.We plan to initiate a Phase 2a trial of MM-120 in chronic pain in the fourth quarter of 2022.

Moving on to our work in substance use disorders. There is a major unmet need to address the ongoing and ever-growing opioid crisis and provide effective treatment solutions for withdrawal management.Our proprietary molecule, MM-110, also known as zolunicant, or 18-MC is an alpha-3, beta-4 nicotinic cholinergic receptor antagonist that has been tested extensively in preclinical models of withdrawal in substance use disorders.MM-110 has been shown to reduce signs of opioid withdrawal and reduce self-administration of opioids, stimulus, nicotine and ethanol in preclinical models.

Extensive pharmacology and toxicology studies have also shown MM-110 as a safety and tolerability profile that supports our clinical development program. We recently completed a Phase 1 trial of MM-110 in late 2021, which assessed the safety, tolerability, pharmacokinetics and cognitive effects of MM-110 in healthy volunteers in this Phase 1 single ascending dose and multiple ascending dose trial, subject either receive doses between 8 milligrams and 650 milligrams on 1 day or daily doses between 4 milligrams and 180 milligrams per day for up to 7 days.

77 participants received MM-110 and 31 participants received placebo. The results of this successful Phase 1 study in conjunction with the preclinical characterization of MM-110 have informed the Phase 2a trial design that we plan to initiate in the second quarter of 2022.

Earlier this month, we announced the upcoming key opinion leader webinar on addiction and withdrawal management featuring presentations from Dr. Kelly Dunn, a professor at John Hopkins School of Medicine; and Dr. Stuart Gitlow, past President of the American Society of Addiction Medicine. This webinar will be held on Thursday, May 19 at 11:00 a.m. Eastern time and registration can be accessed through the Investors and Media section of MindMed's website.

We look forward to this discussion about the current treatment landscape and unmet medical needs that exist in treating substance use disorders and managing opioid withdrawal. Following Dr. Dunn and get those presentations, we will provide an overview of MM-110 and its potential to address a key gap in the available treatment for opioid use disorder.

I'll now turn to our third lead program, MM-402 or R-MDMA is a synthetic enantiomer of MDMA that exhibits pro-social activity in preclinical models. We are developing MM-402 for the treatment of the core symptoms of autism inspection disorder, or ASD, which is a developmental disorder characterized by atypical social communication and interactions, repetitive patterns of behavior and restricted interest.

Preclinical studies of R-MDMA demonstrate its acute prosocial effects while its reduced dopaminergic activity suggests that it will exhibit a favorable safety and tolerability profile compared to racemic MDMA or the SN antimer.

Additionally, R-MDMA has been shown to maintain protocol effects with reduced similar activity compared to MDMA, and we believe may have the potential to be administered in a standard dosing regimen.

We are currently conducting IND-enabling studies to facilitate sponsored Phase 1 trials of R-MDMA beginning in 2023. Additionally, through our research collaboration with University Hospital Basel, we plan to initiate a comparative Phase 1 pharmacokinetics and pharmacodynamics trial of R, S and racemic MDMA in healthy volunteers in the third quarter of 2022.

Our drug development strategy is closely complemented by a platform of digital medicine products that have the potential to facilitate adoption, use, and most importantly, grow it and diverse access to our therapeutic products. In January of this year, we initiated the session monitoring system, SMS-01 study, which leverages the MindMed session monitoring system or MSMS to evaluate the passive collection of sensory data during a consciousness altering therapeutic session.

MSMS is a technological platform that provides the foundation in the development and implementation of a suite of products for use by clinicians and patients during treatment sessions that may also include the use of consciousness alternative medication.The launch of this study is an important milestone for our future development of regulated devices and software as a medical device, or SAMD, products that are designed to support novel analysis of multimodal data in the delivery of psychiatric care.

This study will provide data that support the development of critical analysis algorithms.Subsequent studies will intend to provide the evidence necessary for FDA clearance. The second of our key active digital medicine efforts, which we call anxiety digital diagnosis for precision psychiatry, or ADAPT, is a combination of a natural history study, which is to say that it follows a group of people over time who have or at risk for developing an value disorder and a newly developed mobile application that we built specifically to support the study.

The study and its supporting app have launched in private beta and are currently enrolling by invitation. Our third key digital medicine effort that quantifying the processes and events of psychotherapy at scale, are [indiscernible] study, continues to enroll subjects in participating psychiatric clinics.This study is providing a remarkably rich and robust data set to enable a better understanding of patient progression, trends and characteristics in the real-world treatment environment and inform all aspects of our program planning. We believe our digital medicine products and projects could have monitoring and therapeutic benefits across a range of psychiatric disorders.

By refining the techniques used to capture, model and map the autonomic and behavioral outflow and other correlates of neuro activity, we aim to improve the experience of clinicians and the outcomes for patients in the delivery of psychedelic and other perception altering substances and psychotherapies.

Our team has worked incredibly hard to advance these products into the clinic, and we remain dedicated to rolling out these novel approaches and improving psychiatric outcomes for patients. Overall, we are extremely excited about these advancements and the value-driving milestones ahead.

With that, I will turn the call over to Dr. Miri Halperin Wernli, our Executive President, to discuss our exciting research collaborations and early-stage research and development activities. Miri?

[Miri Halperin Wernli, Executive President]

Thank you, Dan.

With an aim towards accelerating our R&D efforts, we collaborate with leading research organizations around the world that provide valuable opportunities to advance novel treatment for brain health disorders.MindMed collaborates with the Liechti Lab at University Hospital Basel in Switzerland and have exclusive global right data compound and patents associated with the research program evaluating LSD MDMA, [indiscernible].

This includes data from numerous completed and ongoing Phase 1 and Phase 2 studies. This ongoing collaboration has generated a number of patent applications and has been invaluable in derisking and informing our drug development program.

In addition to our UHB collaboration, we have an ongoing partnership with Mindshift Compounds Limited in Basel, Switzerland, on the drug discovery and optimization platformdeveloping and characterizing next-generation research compounds with all related IP and pharmaceutical technology owned outright by MindMed.

Lastly, our ongoing research collaboration with the Israeli Drug Development Organization Next Stage Therapeutics, seeks to explore the therapeutic utility of a proprietary brain targeted liposome delivery technology to mitigate risk of systemic adverse effects with certain molecules such as ibogaine.

I will now turn it back over to Rob.

[Rob Barrow, CEO]

Thank you, Miri.

We will now turn to our financial results for the first quarter ended March 31, 2022. As of March 31, 2022, MindMed had cash, cash equivalents and short-term investments totaling $120.5 million compared to $133.5 million as of December 31, 2021.

MindMed believes its available cash equivalents will be sufficient to meet its operating requirements into 2024. The net cash used in operating activities was $12.9 million for the three months ended March 1, 2022, compared to $10 million for the same period in 2021.

Research and development expenses were $10.2 million for the three months ended March 31, 2022, compared to $6.8 million for the same period in 2021. The increase of $3.4 million was primarily due to $4.4 million of internal expenses related to compensation costs for additional headcount which sold $2 million and an increase in noncash expenses of $1.7 million of stock-based compensation expenses.

This increase was offset by a decrease in external spending of $0.8 million related to our preclinical and other programs. General and administrative expenses were $8.3 million for the three months ended March 31, 2022, compared to $7 million for the same period in 2021. The increase of $1.3 million was primarily due to an increase of $0.9 million in noncash stock-based compensation expenses. Other contributors to the increase included professional services, such as accounting, audit, legal, compliance, director and officer insurance and investor and public relations and personnel costs to support the growth of the company.

The net in comprehensive loss for the three months ended March 31, 2022, was $18.5 million compared to $13.8 million for the same period in 2021. Overall, the first quarter of 2022 was marked by steady progress across our drug and digital medicine pipeline. We continue to build a world-class pharmaceutical company and attract top talent at all levels of our organization.

We recently announced the appointment of Dr. Francois Lilenthal, as our Chief Commercial Officer, who brings more than two decades of global biopharmaceutical experience from Merck, Janssen and other organizations to support advancement in our clinical and commercial objectives.

I'm incredibly proud of the growth and numerous achievements across all areas of our organization. And I cannot be more grateful for the incredible people both within and outside our organization who make this critical work possible.

With that, I'd like to thank you all for being here today, and I'm happy to take any questions.

[Operator]

[Operator Instructions]Our first question comes from Patrick Trucchio with H.C. Wainwright. Please proceed.

[Patrick Trucchio]

Good morning, and congrats on all the progress. I have a couple of follow-up questions on the MM-120 program. First, just I'm wondering what was seen with the safety and tolerability in the UHB trial. Was it different in any way from historical studies conducted with LSD?Secondly, can you discuss in further detail what read-through from the UHB program and LSD could be expected to the Phase 2b trial for MM-120 in GAD and anxiety disorder? And were there any key differences or what are the key differences in studies, including on the points that we should keep in mind as we look to that read through.

[Rob Barrow, CEO]

Absolutely. Thanks so much Patrick. The UHB study that you're mentioning, as we said during the call, was presented last week at PSYCH symposium in London and really the most modern and highest quality study of LSD ever conducted.I think it's really directly impactful on our program and does read through, does translate directly into the Phase 2 study that we have ongoing and anticipate dosing our first patient in the coming months.

In terms of the adverse effects and adverse result that we saw in the UHB study, there really was nothing inconsistent with the drug class or with LSD when you look at the literature for both LSD and for all of psychedelics.And -- commonly, you see nausea, anxiety and headaches as with most drugs being higher up in the west, and that's really what we saw in terms of treatment-related events.

The only SAE, and I think this is particularly important, the only serious adverse event that was observed for an acute transient anxiety and confusion in one patient. There was no suicide-related SAEs or AEs observed during the study.So we obviously are very excited in light of those findings and whether that's due to the indication, the patient population and/or the specific activity of or its potency all of those could be quite positive as we progress to our Phase 2 program.

In terms of the key differences and really the read through, how it inform. One of the things I think is most relevant is the fact that this study tested a 200-microgram dose of LSD and we know that in comparison to what's been studied historically with [philisiben], that dose is even higher than most of the philisiben studies. And of the interesting findings that we saw from the study is a really high correlation and statistically significant correlation between the acute positive effects of LSD and the clinical outcomes or reductions in Hamilton anxiety score.

That's not something that has really been reported extensively previously in the study and one that is critically important because it provides some level of a proxy that we can use to target acute activity that we can anticipate correlate with that longer clinical response.So very excited to see those data and we'll use that to inform certainly how we think about acute activity and targets in our treatment sessions, both in the Phase 2 study and beyond is to continue to build the data set.

And with that said, I think it's critically important and to realize that the dose response study that we are conducting in Phase 2b will go a very long way to further that understanding, but also to give us the best opportunity to see this desired effect in the most patients possible, because of the incredible activity and incredible potency of LSD.

It really gives us a unique opportunity to push the upper bound and make sure that we are dosing appropriately, both for the magnitude of the acute effect and to enhance the likelihood of a durable effect. So all of the data, the pharmacodynamic data that we observed the correlation to clinical activity, but also the most importantly, the strong positive signs of efficacy from the study that were statistically significant.All read through and correlate with what we're doing in our Phase 2 program.

The one other difference I would highlight is that we are using the Hamilton anxiety scale as the primary endpoint. There is a good body of evidence from the literature that STAI-G and HAM-A are measuring the same thing and are correlated in terms of clinical response, but certainly the Hamilton anxiety scale is what we'll be using for regulatory approval for generalized anxiety disorder as we progress in the Phase 2 and Phase 3 program.

[Patrick Trucchio]

Yes. That's really helpful. That was kind of part of my next question. So just specifically on the Phase 2b trial, at baseline, the patients are required to have a HAM-A greater than or equal to 20. So I'm wondering if you could, I guess, first, tell us what other comorbidities, if any, would patients be expected to have or what exclusions would there be for things such as depression or other comorbidities or some proportion of patients expected to have some of those comorbidities.

Secondly, what proportion of these patients are expected to have any experience with psychoactive agents? And then how was the placebo or how is it being determined for the trial, input from regulators was given? And then just finally, what is the study power to generate in terms of improvement in the HAM-A?

[Rob Barrow, CEO]

Yes. All great questions. I'll try to make sure I get all of those, Patrick. So in terms of the comorbidities based on, we certainly anticipate that there will be diagnosis is a major depression disorder that will also come into the study.Of course, GAD is to be the primary diagnosis, but the incidences of GAD and MDD comorbidities is incredibly high. And so we certainly anticipate that there will be overlap.

And importantly, that was the case in the UHB study as well, where we also saw statistically significant responses in the HAM-D and the BDI. So we saw reductions in both anxiety and depression in the UHB study, which we think will translate into our Phase 2 program, hopefully, and even beyond that, as we look at other comorbid psychiatric indications.

The other psychiatric indications that would be excluded are those where there is a perceived risk with this drug class, which is bipolar disorder. There are certain indications that are going to be generally and categorically excluded I anticipate from all studies in the psychedelic drug class because there are some historical concerns about using this drug class in those patient populations.

But generally, as we look at this indication, GAD is one of -- is an incredibly prevalent disease disorder in our country and one where we are trying to get a representative sample of this population, whether it's considerable amount of comorbid psychiatric disease.

So again, another part of your question, I think -- make sure if I miss anything, please free feel to expand. But -- yes, use the placebo and input from regulators, in our Phase 2b study, we've designed it as a 5-arm treatment study. So there are four active arms of LSD and our placebo. This thing is the fifth arm, the comparator.

As you know, there's been extensive discussion around the use of an appropriate control or appropriate placebo condition in these studies. And by using these five treatment arms, it actually gives us, we believe, the best opportunity to both learn from and observe the placebo response and placebo controlled response and blinding because we have both a true placebo to come here again.

And we have a 25-microgram dose of LSD, right at that dose of perceptual effect, just at the sort of threshold level for LSD. And so it does give us a really unique opportunity to see both the dose response curve and to confirm that there is a non-zero dose response curve.But it also allows us to do post-doc analysis for paralysis comparison against the true placebo again, extremely low dose active arm. And we think all of that will be incredibly informative as we progress further into the development program.

One of the things -- a lot of the discussions historically with regulators around appropriate placebo controls are not informed by current high-quality studies that would allow us to compare the different controls. And so by generating some level of that evidence that gives us valuable data, which is directly relevant to our subsequent regulatory discussion before moving to physical sets. And last part -- go ahead, please.

[Patrick Trucchio]

I was just going to say the proportion that would be expected to have experience with the psychoactive agents, what would that be?

[Rob Barrow, CEO]

Yes, we really anticipate it being on the lower end of the low teens, perhaps 10%, but that is not a strict target. That is just historical learning from other studies and looking at historical circle clinical trials in this space. So we don't have a hard rule about the percentage or a hard target for the percentage of prior PSYCH does.We do exclude patients who are showing a use pattern or something that would potentially confound study results or be problematic in terms of their history use of psychedelics.

[Patrick Trucchio]

Right. And then just the last part of it was just around the powering for the study of the HAM-A, what kind of level of improvement from baseline relative to placebo are you targeting in the trial?

[Rob Barrow, CEO]

Yes, so, one of the key things to note here is that the statistical analysis for the Phase 2 study is anticipated to be targeted on demonstrating the dose responsive effect. So, it is a methodology that's used to -- in or in very commonly in dose optimization studies to both pick a or demonstrate a non-zero response curve and confirm what that dose response curve is prior to selecting an optimal course to bring forward in the Phase 3 study so, we are powered to detect differences that would be in line at a minimum in line with the historical standard of care and trying to improve on those standards, that is looking -- if you look at historical literature for psychedelics, the effect sizes are somewhere in the 0.3 to 0.4 Cohen's D range and we are anticipating or targeting to pick-up clinical response that would be slightly greater than that, so something around 0.5 range.

[Patrick Trucchio]

Got it. And if I could, just one more on the program, at baseline, would patients could been expected to failed any prior treatments, including standard of care treatments?

[Rob Barrow, CEO]

We do not have that as a required entry criteria into the study and because this is a Phase 2b study, we feel it's important as with all drug development programs to take a rigorous approach to find the population but also gather data that can inform subsequent development.

In so doing, we are certainly very focused on patients, medical and psychiatric history and medical -- excuse me, medication history, which will inform how we progress further in development.

We are very interested, of course, in looking at subgroup analysis and actually completing the study in post-doc analysis from Phase 2b study, which would inform where we go in terms of phase reflection and potential indication refinement as we progress further into development. We do have any specific requirements going into the study.

[Patrick Trucchio]

Got it. That's very helpful. If I could, I mean but just one on the MM-110 program. Just wondering what learning emerged from the MNMD over three phase trial that informed the design of the Phase 2a trial?

[Rob Barrow, CEO]

Yes. Well, obviously, the goal of Phase 1 is to define the safety and tolerability, the pharmacokinetics of the molecule and so, looking at the data from those studies have been very important in terms of giving us clarity about the dose regimen and exactly how we want to progress this treatment.

It's also important in light as Dan said during the call. In light of the very robust data sets we have from preclinical models where we observed just a single dose of MM-110 can have a prolonged prospect in this preclinical model of self-administration.

We also believe that in this population, a model where less frequent treatment can be given as opposed to multiple doses a day and every day for many days will be preferable because there is patient compliance concern. And if we can demonstrate less frequent dosing has a strong clinical response will be very meaningful as a shift in the treatment of gate for opioid withdrawal.

Beyond that what we will be having our KOL event this Thursday and are excited to share more about the significance and more about the program and we'd really point to that event as we share even further clarity on the learning's from our Phase 1 study.

[Patrick Trucchio]

That's great. Thank you so much.

[Rob Barrow, CEO]

Thanks Patrick.

[Operator]

Our next question comes from Michael Okunewitch with Maxim. Please proceed.

[Michael Okunewitch]

Hey, guys thanks so much for taking the question. So, I'd like to follow-up on one of Patrick's questions regarding the UHB data set and generalized anxiety. Specifically, is there any key differences between the UHB study and your ongoing Phase 2b in terms of the treatment protocol, the role of psychotherapy or how you're actually recording the outcome measures such as the change in the anxiety scales?

[Rob Barrow, CEO]

Yes. Thanks so much, Michael. So, there are certainly some differences and as you would expect, translating into a commercial development program. We have a study design and methodologies that are standard for any anxiety program.

In terms of the treatment regimen in psychotherapy, one of the most important things to highlight here is that the UHB collaboration in our partnership with both Dr. Liechti and his collaborators, I'm referring to Dr. Peter Gasser, have informed exactly what we are doing in terms of psycho-social support and safety and supportive surround that goes along with treatment session with LSD.

So, what we are doing in the clinic is very much informed by those historical practices involved. And it's also worth noting that those practices are not limited to this LSD-Assist study that was just presented. But in Switzerland, there's a long history and currently, there's something along the magnitude of 30 psychotherapists who are able to provide LSD therapy to patients. And we've used learning's from all of that use to inform exactly what we're doing in our development program for LSD or MM-120.

With that said, I think it's important to note that how we frame and how we approach that therapeutic surround for the delivery of an MM-120 session is going to be very important in terms of scalability and in terms of feasibility for labeling and ultimately in terms of how we get this out into the world, if we're successful in getting MM-120 approved.

And so we've definitely packaged that the psychotherapy -- or excuse me, not psychotherapy like the therapeutics around and pshyco-social support that is so much informed by the historical use of cases in clinical trials. But we've presented it both in terms of our approach in the clinical trial and into regulators, any framework that is standard and more readily acceptable and adoptable we believe for treatment of psychiatric patients.

So, all that said, it is not dramatically different. We still have patients who are brought in to be educated, who are overseen and monitored by dosing section monitors during the treatment session and then have follow-up visits. This is not a in many multi-cycle therapy program that we administer in our development program, but a package and a psycho-social surround that we believe is both out of it and based on the historical evidence base that will be so important to bring back into the clinic and actually into the world of patients.

In terms of how outcome measures of our collected, there's also certainly methodological differences, nothing that -- I think as you look at a multicenter studying at approximately 20 studies we're targeting for Phase 2 study and 200 patients, honestly, that scale requires some additional support and infrastructure.

And so, we do use centralized -- more centralized assessment of the congener measures to try to enhance that separation from those who are delivering care and those who are awaiting the outcome measures and we also extensive controls to monitor across all of our clinical end points to ensure the validity and consistent to those data across sites.

[Michael Okunewitch]

Right. Thank you very much. I appreciate the additional color. I'd also like to touch on your digital medicine initiatives. If I understand correctly, it seems like for some of them, they will be used in conjunction in the ongoing clinical studies. So, how does the FDA view pursuing a SaMD medical product in the clinical trial concurrently with a drug product? Are there any additional challenges or complications since SaMD somewhat implies a benefit to outcomes through the use of the software?

[Rob Barrow, CEO]

Yes. So, an important question, and I want to make sure that we have clarity on this, is that we do have parallel development pipeline for our drug therapies and our digital therapies. And so this SaMD products that we are developing are not at the moment included in our clinical trials of MM-120.

We look to develop them independently. And then as we progress, there's always the opportunity to bring them back together whether it is through companion or -- companion use or combination products in the further future. At this time, we do not have them as integrated development programs, whereby we're developing a SaMD product in our phase clinical research for MM-120.

[Michael Okunewitch]

Right. Thank you very much. And then I guess one more. Just strategically, given where you are in terms of your strong balance sheet and where the markets have traded, does M&A represent an objective for MindMed at this time?

[Rob Barrow, CEO]

We're always interested in finding opportunities that will be accretive to value for our shareholders and that will represent a nice addition to our pipeline. And certainly, as we've seen the market landscape and other opportunities, we hear always keeping our eye very much open and in constant dialogue and exploration to seek identify opportunities for that long-term expansion for near-term growth and for ultimately to build the most robust and strongest pipeline in this entire drug class and the entire sector so, we can drive that long-term value and deliver on our mission to be leaders in developing brain health disorder treatment.

[Michael Okunewitch]

Right. Thank you very much. I appreciate it you taking my question.

[Rob Barrow, CEO]

Thanks, Michael.

[Operator]

Our next question comes from Elemer Piros with ROTH Capital. Please proceed.

[Elemer Piros]

Yes, good morning, Rob. I just wanted to make sure that I heard it correctly that you would be presenting at this KOL event this Thursday, you would be presenting Phase 1 data with 18-MC?

[Rob Barrow, CEO]

So, yes, we anticipate providing some additional clarity in terms of our development program overall and in terms of our recent findings and how that translates into our clinical development program. So, we will be extending some commentary on Thursday and certainly fully disclosing anything that we are discussing at the time prior to that call.

[Elemer Piros]

Do you think that you would be able to provide the -- what the intended dose for the Phase 2 and the scheduling of administration of the drug in the Phase 2a trial?

[Rob Barrow, CEO]

Absolutely, I reserve full discussion on that. And so, we are discussing all of those data, but we are dosing in our Phase 2 study, we'll be dosing every other day regimen for the duration of treatment, which is a seven day treatment interval.

And we have a study design whereby we're doing a dated two part study where there's like ten open-label patients --

[Elemer Piros]

Yes.

[Rob Barrow, CEO]

-- being administered MM-110 for seven days. And then as we observed those readouts, we've seen a lot of success with this approach and particularly in indications where there is a clear large magnitude response and or where there are more objective outcome measures. And so that's the study design we approached at this point, and I had to get that study up and running this quarter.

[Elemer Piros]

Yes, thank you. And I don't know if you have this at your fingertips, but do you know what the shares outstanding at the end of March were? Otherwise, we can later discuss this.

[Rob Barrow, CEO]

Yes, I believe that is reported and will be in the 10-Q, so I want to make sure that we have that accurate, but it is -- I'll give you the number -- maybe, one second here. Elemer, we can get to the number.

[Elemer Piros]

It's -- present at your inspired 10-Q soon, so.

[Rob Barrow, CEO]

Correct. It's 422 million shares, roughly.

[Elemer Piros]

Okay. Thank you so much, Rob.

[Rob Barrow, CEO]

Thank you, Elemer.

[Operator]

Our next question comes from Sepehr Manochehry with Eight Capital. Please proceed.

[Sepehr Manochehry]

Good morning and thank you for taking my question. My first question is about the substance use program. I just want to understand, as you're describing this KOL and I'm sure we'll gain more insight. But is the positioning of the gaps that you're looking at in the current offerings? Or are you -- when you talk about this KOL event and highlighting it gaps because is it more around the problem of substance use? Just want to understand if it will be a comparison of like the existing drug offerings, for example, or if this is more of an event around the problem at hand, like the opioid epidemic.

[Rob Barrow, CEO]

At the end, it's important to -- it's a bit of both, I would say, in the sense that the overall landscape is certainly critically important for us to understand, given the terrible tragedy, the opioid epidemic here in this country, in particular. We just had the recent data showing that in last year, there were over 100,000 believes cases from opioid overdose death. That's as a striking number and incredible growth over the last several years.

And so highlighting that backdrop is the starting point, but also it's critical to understand where in the treatment landscape we're seeing significant challenges and whether there's a gap that is resulting in this order being under cared for and underserved.

And with that we believe that it is in the early stages of patients seeking treatment so, in the treatment of opioid withdrawal and the facilitation of getting those patients on to medication-assisted therapy such as buprenorphine or a naltrexone.

And that is why we're so excited about our approach in treating opioid withdrawal as a starting point with MM-110 program. So, it will be highlighting both the backdrop but also the important gap in the treatment landscape and why we believe and how we're approaching to fill that gap with the MM-110 program.

[Sepehr Manochehry]

Got it. And I'm guess going off of that, do you see the fact that you have a broader psychiatry pipeline in this asset and the substance use program? Are these all parts of different divisions? Or do you see this as something that is more separate on its own that could be poised for partnering out given that it's basically a separate program?

[Rob Barrow, CEO]

Certainly, as we look at any of our, this area targets or any of our programs, we're always interested in having a dialogue with on various potential partners just to explore what opportunities are and will continue to become available. Our goal and our vision in terms of what we believe is like our drug class and other novel targets can do is to treat beyond just psychiatry but to treat the broader class of brain health disorders, which includes psychiatric indications, use disorders, pain, neurology.

We believe that we are well poised to deliver on that full potential of this drug class and that we would - we'll continue assessing our approach and development opportunities outside of simply psychiatry. And that said, certainly, as we progress and look towards getting deeper into clinical research programs and closer to hopeful commercialization of these products. there's always an opportunity with any individual program or disease area for selected partners to approach that would be more focused on a particular molecule indications. So we keep all of those options open to ourselves and certainly view the entire...

[Sepehr Manochehry]

And is there a governmental component there? I know like the NIDA does some work that's why I was trying to figure out this KOL event and the fact that there is some at least historical involvement from the government and an idea in terms of the substance use programs. Like, do you see potential for funding maybe off the back of this as a non-dilutive source of funding for this program?

[Rob Barrow, CEO]

Again yes, we're definitely always looking at non-dilutive sources of capital and ways to expedite and maximize the impact and the visibility of any of our programs. So - it's important to highlight that in the MM-110 program is not a psychedelic. It is not a controlled substance at this time nor do we anticipate it will be. So it certainly has a bit of a broader and less income ability to generate government funded or I believe the source of capital such as that.

[Sepehr Manochehry]

Certainly and maybe just after touching on the GAD program, obviously, you got encouraging data on anxiety. I just want to understand the different I understand you'll be using a different scale. Can you kind of touch on that? And I guess the confidence you gained from the STAI data and you're using HAM-A and?

[Rob Barrow, CEO]

Correct, yes and both of these...

[Sepehr Manochehry]

And with the HAM-A, I guess, encouraging already, you guys, I believe, have that data as well?

[Rob Barrow, CEO]

So we had a Hamilton depression scale that was included in the UHB study that just read out. But the STAI-G that they use as the primary outcome measure and the Hamilton value scale, I think the most important point to hide there, these are well-established outcome measures that have been used extensively. We know a lot about both of them. We know about how they intersect and correlate.

And we have a high degree of confidence that they are directly correlated and they're directly translatable in terms of our read-through and our derisking the program and the clinical approach in GAD. So while they are different measures, I think if you look at the depression landscape, if you were to look at the number of scales that are available Hamilton depression scale and the address, for instance, where we see a high degree of correlation.

It's really important to note too, that when we look at depression anxiety and a large degree of symptomatic overlap and sort of construct overlap, both of the disorders and the outcome measures that are used to affect those disorders. It's important to see consistency. And so, we're doubly encouraged by seeing a response in the STAI-G and also in the Hamilton depression scale. So we think that these learnings are really important, both for our GAD approach, but also as we think about the potential utility of LSD and psilocybin a broader class of psychiatric disorders over the longer term.

[Sepehr Manochehry]

Understand and just the last one from me. Do you anticipate providing maybe an update on the 50% enrollment point? I know first patient enrolled is typically something considered substantive or material, but in this market and with your delays, I think, the pace of enrollment itself is something has been lacking visibility from a lot of companies. Is that something you guys considered or an ultimate form of update on maybe the cadence of enrollment?

[Rob Barrow, CEO]

Yes, we haven't guided that we will be doing so, but certainly, opportunities to provide update and clarity on [indiscernible] study and where we are in the progress of enrollment is important information is something that we'll keep a close eye on and make decisions as we progress to the study. So certainly would share any of that publicly as soon as we were to make such a decision.

[Sepehr Manochehry]

Okay thank you, thank you for taking my questions.

[Rob Barrow, CEO]

Thanks.

[Operator]

Our next question comes from Tania Armstrong-Whitworth with Canaccord Genuity. Please proceed.

[Tania Armstrong-Whitworth]

Good morning guys, just a couple of questions from me. Firstly, on the Phase 2b anxiety trial, are you able to see what the follow-up period will be? Like how long will you be monitoring these patients for after you dose them?

[Rob Barrow, CEO]

Yes good morning Tania. So the study is designed to follow patients after a single administration for 12 weeks over the primary endpoint measured at four weeks after treatment.

[Tania Armstrong-Whitworth]

Okay so no data after 12 weeks? That's the definitive cutoff?

[Rob Barrow, CEO]

In this study, yes that's correct.

[Tania Armstrong-Whitworth]

Okay and then with respect to Project Angie are you going to be disclosing the chronic health indication that you're looking at prior to the commencement of the trial in Q4? And maybe just give us a timeline?

[Rob Barrow, CEO]

Yes, absolutely, absolutely. So we anticipate starting that study in Q4. We don't have a definitive release date when we would be announcing the clinical design, but certainly as we approach it prior to initiation of that study, you provide additional clarity and would like to highlight the thought with historical data and the approach for why we're pursuing that.

So there will be certainly more to share about that program and we have the approach both in the indication and the clinical approach and development program. So we're very excited to share more of that. It would likely be closer to the initiation of the in the fourth quarter.

[Tania Armstrong-Whitworth]

Okay and then lastly - and thinking about, I guess, costs or investment allocation across your program, could you give us an idea of how much we should be thinking about allocating towards the digital health versus drug programs?

[Rob Barrow, CEO]

In terms of spend or in terms of market potential?

[Tania Armstrong-Whitworth]

In terms of spend?

[Rob Barrow, CEO]

Yes, certainly, the vast majority of our costs are directed towards our drug development program. The digital programs are very important to highlight that where we see a lot opportunity in value is that if we can use those digital programs to facilitate further adoption of our drug therapies that incremental market access and revenue growth in the long-term would be a meaningful revenue and profit benefits of the organization. So while we do continue the digital programs with and [ph] see it value -- they do represent a small fraction of the costs that are being outlayed in our R&D program.

[Tania Armstrong-Whitworth]

Do you have a budget for the next couple of years on how much you want to allocate to those programs? Or is that not something you disclose?

[Rob Barrow, CEO]

We certainly do have a close budget we managed very tightly, but we thought that we have disclosed in great detail in terms of the allocation across those programs. In some ways, it will be also driven by the incremental successes as we continue to advance. So I wouldn't want to give too much further guidance on the exact amount of allocation given that we have several important milestones and to read out in the next 12 months.

[Tania Armstrong-Whitworth]

Okay that's fine that's good for me. Thanks Robt.

[Rob Barrow, CEO]

Thanks so much Tania

[Operator]

This concludes the question-and-answer portion of the call. I will now turn the call back over to MindMed's CEO, Rob Barrow, for closing remarks. Rob?

[Rob Barrow, CEO]

All right. Thank you so much, and thank you, everyone, again, for joining us this morning. Before we conclude, I'd also like to thank the entire MindMed team, our investors and many people who have been supportive to us along the way, including our study participants and their families.

The time is now, it's never been more important to deliver on the potential that we have in front of us to overhaul the treatment of brain health disorders. And we all remain deeply committed to making that potential a reality. So thank you again, and I look forward to providing further updates on our exciting programs, which progress throughout the year. Thank you, everyone.

[Operator]

This concludes today's teleconference and webcast. You may disconnect your lines at this time, and thank you for your participation. Have a great day.