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Analyst Says Pharma Co. 'Meaningfully Undervalued'
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"We continue to view Mindset as meaningfully undervalued," Stefan Quennevill reported in an Echelon Capital Markets research note.

Recently, Mindset Pharma Inc. (MSSTF:OTCMKTS) revealed its FQ323 results (representing the quarter that ended March 31, 2023).

The results were in line with estimates, reported Echelon Capital Markets analyst Stefan Quennevill in a May 31 research note.


Mindset made further advancements in moving its next-generation psychedelic drugs toward clinical development.

In its results, Mindset released the following highlights:

  • CA$1.9 million in revenue, compared to Echelon's estimated CA$4.3 million.
  • General and administrative expenses and research and development expenses of CA$0.7 million and CA$2.8 million, which showed an operating loss of CA$2.9 million, compared to Echelon's expected CA$2.7 million.
  • Net loss totaling CA$0.03 per share, in line with estimates. 
  • CA$1.5 million, compared to the estimate of CA$2 million.
  • CA$7.3 million in cash at the end of the quarter.

Quennevill commented this cash "should provide a sufficient runway to bring its various preclinical assets to the clinic."

Lawsuit With Reunion

A lawsuit from Reunion Neuroscience Inc. (REUN:NASDAQ;REUN:TSX) made waves during the quarter; however, Echelon noted it viewed the lawsuit as baseless and, according to Quennevill, "further proof of the strength and strategic value of Mindset’s IP portfolio."

Reunion had claimed that Mindset copied the company's lead compound, RE104 (isoleucine glutarate, a prodrug of 4-OH-DiPT), during Mindset's U.S. patent application (No. 11,591,353). This lawsuit was for CA$25 million in damages. Additionally, Reunion put forth a request to designate Dr. Nathan Bryson, its chief scientific officer, as an inventor of the patent, ensuring Reunion's unrestricted operational rights with the compound.

On this, Quennevill said,  "While we are by no means patent lawyers, our analysis, as well as commentary from industry IP experts, leads us to believe that the lawsuit is largely baseless, given the general principle in patent law that the patent applicant with the earliest priority date maintains the legal precedents of the claims made in the patent."

Possible Catalyst

Quennevill pointed out that the signing of a partnership for Mindset's compound, MSP-1014,  could be a major short-term catalyst for the company within the next few months.

In light of this and the announced results, he noted, "We continue to view Mindset as meaningfully undervalued."

Structure and Predictions

In his report, Stefan Quennevill reiterated his speculative Buy rating on Mindset Pharma Inc. and his target price of CA$1.25 per share.

Quennevill's research also shared current market data on the company.

  • Price: CA$0.32, with a 52-week range between CA$0.27 and CA$0.70
  • Price Target: CA$1.25
  • Market Cap: CA$32 million

Quennevill noted Mindset currently has 131 million shares outstanding and an enterprise value of CA$35 million.

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Important Disclosures:

  1. Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  2. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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Disclosures for Echelon Capital Markets, Mindset Pharma Inc., May 31, 2023

Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value, and you may lose money. Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.

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Canadian Disclosures: To make further inquiry related to this report, Canadian residents should contact their Echelon Wealth Partners professional representative. To effect any transaction, Canadian residents should contact their Echelon Wealth Partners Investment advisor.

U.S. Disclosures: This research report was prepared by Echelon Wealth Partners Inc., a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. This report does not constitute an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. Echelon Wealth Partners Inc. is not registered as a broker-dealer in the United States and is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. Any resulting transactions should be effected through a U.S. broker-dealer.

Company: Mindset Pharma | MSET-CNSX

I, Stefan Quenneville, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report. 


Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer.

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