The United States Food and Drug Administration (FDA) announced having put on hold an application by MindMed Inc. (NASDAQ: MNMD) to conduct a clinical study using psychedelic compound commonly referred to as LSD to treat patients suffering from generalized anxiety disorder.
On December 21, MindMed issued a public statement on the matter stating that the hold by the FDA is related to its investigational new drug application which is required to start a mid-stage trial of the drug-lysergic acid diethylamide.
“Our team has a tremendous sense of urgency to bring new treatments, such as LSD, to the many patients in need, particularly given the growing mental health epidemic. We remain highly confident in the therapeutic potential of LSD to usher in a new treatment paradigm for these disorders and we look forward to working closely with FDA to satisfy all outstanding concerns as rapidly as possible,” said the company’s CEO, Robert Barrow.
The FDA failed to give a clear reason for putting the clinical study on hold however, the company said that in 30 days’ time details on why the regulator took the decision would be made public.
This move by the FDA comes as a blow to the psychedelics sector which has been trying to use LSD among other psychedelics compounds like DMT and psilocybin for therapeutic purposes. Following this development, shares of the company declined by 10.4% to $1.46 in the pre-market period moments before the market open.