Field Trip Health Ltd.

Greetings and welcome to Filtrip Fiscal Third Quarter 2022 Earnings Results Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Kathleen Heaney of KCSA. Please go ahead.

Thank you. Good morning, everyone, and welcome to Field Trips Fiscal Third Quarter 2022 Financial Results Conference Call. Before we begin the call, I'm obligated to remind everyone that during the course of this conference call, management may be making some forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations. These results are outlined in the risk factors section of the filing and our disclosure materials. Any forward-looking statements should be considered in light of these factors. Please also note, as safe harbor, any outlook we present is as of today, and management does not undertake any obligations to revise any forward-looking statements in the future. Presenting today will be Joseph Del Moral, co-founder and chief executive officer, Ronan Levy, co-founder and executive chairman, and Donna Wong, chief financial officer. I will now turn the call over to Joseph to provide an update on FieldTrip, in particular, the discovery business.

Thank you, Kathleen, and welcome to everyone joining us this morning. Fieldtrip has continued to build its innovative drug research and development programs, as well as deliver high-quality patient services through its best-in-class clinic network. We are proud of the progress our team has made in developing Fieldtrip into a leading psychedelic-assisted psychotherapy provider and highly recognized brand at the forefront of the psychedelic medicine movement, as we further our mission to deliver innovative treatments for patients in need. We are also particularly pleased to see strong growth in patient revenues in the third fiscal quarter of 2022. The strategic review of our corporate structure that we announced on the last earnings call is still underway. As a reminder, we commenced this review to ensure that each operating unit is best positioned, optimally resourced, and focused to provide maximum long-term value to all stakeholders. We will provide further updates as appropriate. Moving on to field trip discovery, our drug development business. During the quarter, Fieldtrip Discovery progressed on the development of our lead novel psychedelic compound, FT-104. This work is advancing us closer to the development of FT-104 as a more convenient, consistent, and practical psychedelic treatment than is expected to be available through psilocybin and MDMA, should they be approved. FT-104 has the potential to change the lives of those suffering from postpartum depression and treatment-resistant depression. FT-104 is a prodrug of 4-HODIPT. a psychedelic substance identified by Alexander Shulgin as a fast-acting, intense psychedelic, providing a subjective experience similar to psilocybin. FT-104 has improved drug absorption, more reproducible pharmacokinetic profiles, and improved bioavailability relative to 4-HO-DIBT, making it potentially a superior drug candidate. During the quarter, the company expanded consideration for the Phase I trial sites to include Australia, in addition to the Netherlands, to mitigate against possible delays related to regional differences and reactions to the latest COVID surge. As of January, the company finalized agreements with interested parties in Australia to pursue Phase 1 studies and site selection is nearly finalized. The company has received the results of its animal studies, which continue to be reviewed and tabulated. One additional preclinical study remains to be completed and the company expects initiation of Phase 1 to commence on the timelines previously disclosed. We are currently targeting ethics submission before the end of the current calendar quarter. We will keep you apprised of our advancement into phase one. In early January, we received a notice of allowance for our patent application for claims related to FT-104, informally known as isoprosynglutarate. We continue to anticipate that the patent will be issued in Q2. On a separate note, we also progressed our early phase research toward identifying a lead candidate in the FT-200 group, This group has provided potential candidates, which are strong 5-HT2A agonists, with improved selectivity relative to the serotonin 2B antitarget. Reducing off-target serotonin 2B receptor activity reduces the risk of cardiovascular toxicity, and so allowing for potentially safer medications that would have greater flexibility of dosing, such as allowing frequent or chronic dosing, including microdosing administration. We are initiating in vivo behavioral screening tests to determine the activity of these compounds in rodent models of depression. During the quarter, we also filed our first provisional patent application related to the FT-200 group to protect new chemical compositions, potential formulations and uses. This is a very exciting time for Fieldtrip as we continue to lead the way in developing the next generation of psychedelic treatments. I will now hand the call over to Ronan to provide an update on the clinic's business.

Thank you, Joseph, and welcome, everyone. In less than two years, we have grown Fieldtrip into a leading operator of psychedelic treatment centers with a well-recognized brand at the forefront of the psychedelic medicine movement. We pride ourselves on delivering innovative and effective treatments to patients at our Fieldtrip health centers with our programs showing success as reflected in patient testimonials and clinic data. Importantly, we continue to get better and more efficient as we take the learnings from the past 18 months when we began opening clinics and apply them to all of our locations. We've been focused on improving the patient experience while driving process improvements within our clinical operations. For example, we recently launched an innovative team treatment model, which has increased patient capacity within the clinics. We also launched a new digital screening tool to facilitate booking, which has decreased call center costs and improved conversion rates through some of our channels. We're continuing to refine our service offerings while driving operational excellence measures within our clinic network. And combined with our effective marketing activities, these measures have resulted in tracking new patients and driving revenue growth. To that end, we are pleased to report that the third quarter patient services revenues were up 50% sequentially and more than 300% over the comparative period in the prior year. Vicki Reid, who joined us as Chief Growth Officer during the quarter, has also been instrumental in driving the improvements in the clinic's business. In addition, we invested in our digital platform portal to allow field trip help to communicate more efficiently with patients, collect data more easily, and make our processes more efficient. We anticipate that additional features will be released in the next quarter to allow for improved patient experience and additional client engagement through portal. On the clinic front, we opened our Seattle location during the quarter. We also opened a clinic in Fredericton, New Brunswick, and most recently in Vancouver, British Columbia. Having best-in-class clinics has enabled us to look for additional ways to utilize them. To that end, we launched our Site Management Organization, or SMO, services in December. The new offering enables companies and researchers developing psychedelic therapies to use our facilities and expertly trained medical and therapy teams to conduct clinical trials. The SMO services are led by Stéphane Côté, who is our new Head of Quality. While still in the early stages, we are excited about this new opportunity. We're also always trying to better serve our patients. You may be aware Health Canada recently amended its special access program, the SAP, to enable access to psilocybin and MDMA through the SAP. And we were pleased to announce that we assisted one of our patients to submit one of the first applications in Canada to the SAP. The SAP provides physicians treating patients suffering serious or life-threatening conditions with the ability to request access to drugs that have not been approved for sale in Canada when conventional therapies have failed, are unsuitable, or are unavailable. As the largest provider of psychedelic-assisted therapies in Canada, we are uniquely positioned to help Canadians access the SAP for psilocybin and NDMA. The clinics are an important vehicle for us in which we are able to build brand awareness, increase our market share, and continue to earn patient services revenue. In that respect, we are extremely pleased to report that according to Meltwater, Fieldtrip alone has 58% of the share of voice in the psychedelics industry in the U.S. Share of voice is a metric that assesses brand awareness relative to all competitors and is a gauge of brand visibility. To conclude, I want to reiterate that we are very focused on creating value for our shareholders, patients, and employees. I will now turn the call over to Donna Wong, CFO, to discuss our financial results.

Thank you, Ronan, and good morning, everyone. As a reminder, all figures that I will be discussing are in Canadian dollars, and the third fiscal quarter of 2022 corresponds to the three-month period ended December 31st, 2021. During the quarter, we earned patient services revenue of $1.4 million from our clinics, an increase of $1 million or 330% over the comparative quarter in the prior year. The San Diego Clinic began generating revenues in December 2021. By contrast, third fiscal quarter 2021 patient services revenues were generated from three clinics. We are pleased with the 50% sequential increase in revenues. This was due in part to the three additional clinics as compared to the prior quarter, as well as the steps the company has taken to further improve and drive business growth, as Ronan has previously mentioned. For the nine-month period revenue, was $3.1 million, an increase of $2.7 million over the same period of the prior fiscal year. This reflects a significant increase in the number of clinics we had operating, 10 in the most recent quarter compared to three in the same period of the prior year. We expect to scale our revenue as the number of patients treated at our clinics continue to grow. Moving on now to a discussion of costs. Total operating costs in the quarter were $15.6 million, up from $5.9 million in the same period of the prior year and reflects our continued investments in growing and scaling our drug discovery business and clinics. General and administration expenses of $9.1 million are our largest operating expenditures and were up from $3 million in the same quarter of the prior year. The increase was primarily due to increased operating costs reflecting the larger number of clinics opened in the quarter as compared to the prior year, as well as those under construction, and an increase in public company-related expenses. GMA costs also included non-cash items comprised of share-based payments of 2.1 million and depreciation and amortization of 1 million. Other operating costs include patient services expenses of 2.5 million, research and development expenses of 1.4 million, and sales and marketing expenses of 1.1 million. Our R&D costs increased 44% over the prior year, primarily due to ramping up of development costs as we work to further progress our activities related to FT-104 and our FT-200 pipeline, as you just heard from Joseph. Our marketing costs nearly doubled from the prior year as we increased paid social, search, and public relations expenditures to build patient interest in our brand. This had the desired results as we saw steady growth in client acquisitions and patient services and validates the steps we have undertaken to improve the business and drive efficiencies. Net loss for the quarter of 14.9 million, which primarily due to total operating costs of 15.6 million, which I just discussed, as well as a foreign exchange loss of 0.5 million. This compares with a net loss of 8.3 million in the same quarter of the prior year. The increase from the prior year primarily reflects the company's focus on growing the business and continued investment in our drug development pipeline and clinic infrastructure, as well as our digital tools. Turning next to the balance sheet, Fieldtrip remains well capitalized, as at December 31st, 2021, we had unrestricted cash and cash equivalents, funds held in trust, and short-term investments totaling $74.5 million. Our solid financial position enables us to continue executing upon our key strategic priorities and furthering our mission to bring innovative psychedelic-based treatments to patient needs. This ends the portion of our prepared remarks. I'll now ask the operator to open the lines for the Q&A session.

Thank you very much. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. As a reminder, we ask that you limit to one question and one follow-up. If you have further questions, please join the queue again.

One moment please while we poll for questions. We have a first question from the lineup. Andrew Pattenew with Stifel, please go ahead.

Hi, good morning. Thanks for taking my question.

Good morning, Andrew.

Could you provide any kind of update, if possible, on the strategic review? Where are you in the process and are you considering, have you moved forward on any considerations? Yeah.

We're pleased with the way the process is going. We're in the middle of the strategic review right now. We're considering a number of different options in that strategic review, as we've mentioned. We don't have any further updates that we can share right now, but we will update when we have those.

Alright, thanks for that. Maybe discussing on the FT-104 patent, you mentioned you know, the prior art claim. Could you discuss a little bit of the background on that? What consequences, if any, this may have? What options you have going forward? And what makes you confident that you'll still be granted the composition of matter patent in Q2? Thanks, Andrew. For that, I'll hand it over to Nathan Bryson.

Morning, Andrew. Right now, I think we'd like to keep that in-house. It's with our legal counsel who's handling the issue, and I think we'll get back to you fairly soon on that. We don't expect this to hinder the granting process, and we fully expect it to be granted before Q222.

Okay, I'll get back into Q. Thank you.

We have next question from the line of Patrick Trucio with HC Wainwright. Please go ahead.

Thanks. Good morning. I have a couple of follow-up questions on FT-104. I guess the first is just can you tell us what additional studies such as neurotox, cardiotox, or additional potential addiction potential studies could be necessary for FT-104 and if these studies could be needed as part of an IND filing for a Phase II program?

Sure. We actually did the neurotoxin-cardiotoxin part of our package now, and I'd say everything looks satisfactory for us to go forward. In most respects, in all respects, the preclinical work that we've done so far is setting us up very well to start in our phase one. We've achieved NAOEL and lowest at lowest non-adverse event dose. And so, you know, I think we're poised to go. We will have additional non-clinical studies as we go past phase one, as we start looking at specific indications. You know, you can easily see that if we're going to develop in TPD, we'll have to look at developmental and reproductive tox and things of that nature. Those are the kind of things we'll have to look at as we go forward, but they're not needed right now for phase one with a single dose.

Yeah, that's helpful. And then can you tell us your latest thoughts on potential phase two trial design for TRD and or PPD? And in addition, should we expect those studies could enroll simultaneously or would one program such as TRD be prioritized? And if all goes to plan with your phase one trial, when would be the earliest you'd anticipate starting the phase two program?

Honestly, I think some of those questions are a little premature for us. We are stepping back. I mean, we're finishing up getting ready for the phase one, so really we're focused on that 100% right now. I'd say as soon as that's up and running, we'll step back and we'll be working on those designs, and I think we could share a little bit more information with you then. I can't say to which indication we'd develop first. I think that is still something that's in discussion. And, you know, if we take the data to the FDA, that may also help clarify some of that. We're looking at going to do a pre-IND as the phase one is headed forward, and I think that will give us the information to help make those selections and help make those designs, you know, more efficient, you know, and tailored to what the agency is looking for.

Yeah. Thank you very much. Thank you.

We have next question from the lineup. Sefer Menacheri with Aid Capital. Please go ahead.

Hi, and good morning. It was great to hear you guys mention that you've already gotten an applicant through the SAP program, which seems like a transformative change for the space. So I'd love to gain some color on the workflow process there. Is that translated to incoming interest or have you been more so mining your own data to assess patients that may qualify?

Thank you for the question. We definitely have received a significant amount of inbound interest. I don't have the numbers offhand from patients seeking treatment with psilocybin and MDMA. As you know, we currently provide psilocybin-assisted psychotherapy at our clinic in the Netherlands. So we have the protocols, we have well-trained therapists, we have the processes in place to be able to provide that sort of therapy. So I think we are well positioned to help patients with these types of therapies in Canada as well as it becomes hopefully more available. So it's early stages yet, but we're in a good position to be administering these types of therapies for patients. And yeah, to answer your question, we have had a significant amount of inbound interest on both MDMA and psilocybin therapy through the SAP program.

Great. That's really helpful. And just maybe, obviously, you guys have a reach across multiple jurisdictions, so there's jurisdiction-based differences in pairs and pair mix. So I just wanted to get maybe some rough understanding of your typical success rate that you see for reimbursement and if there is people being reimbursed for psychotherapy, if there's more heavily weighted in certain jurisdictions versus others, at least for the psychotherapy component of your program.

Right. So the way you put it is right. Most patients get more reimbursement for the psychotherapy than they do for the ketamine dosing itself. In Canada, we tend to find, I believe, a higher percentage reimbursement in Canada than we do in the US, although in the US, patients also get reimbursement for the psychotherapy through out-of-network coverage if they have it, although I think it's at a lower percentage than what we see in Canada right now.

Okay, could you kind of characterize the ballpark of, like, is there a typical window that you expect when you guys are putting followings through, and are the patients, like, do you characterize what the potential for reimbursement is when you speak to patients?

What we do is we create a super bill for the patient that breaks out the costs into the ketamine dosing versus the psychotherapy, the preparation, integration sessions, so they can see where the cost is split at. It's around 55% or so is the psychotherapy portion of the bill, and that's the part that they get reimbursed, mostly get reimbursed on through their insurance providers. If we wanted to get into more detail on that, we'd have to get back to you, so we'd be happy to have a follow-up on that.

Yeah, yeah, and it might be a KPI you guys maybe report moving forward as the kind of payer mix, because that does help inform the outlook for the clinic's business generally. But that's helpful. But, yeah, I appreciate the insight on the kind of divergence between Canada and U.S.

Thank you, Seth. Thank you.

We have next question from the lineup. David Martin with Bloomberg. Please go ahead.

Yes. Good morning. So first question is the SAP program, does that just provide access to treatment or does it pay for the patients to get the treatment?

It does not pay for the patients to get the treatment, so the patients will be paying for treatment. We're still in the process of sort of figuring out our own internal processes and how we're going to deal with the financial aspect of this. So we'll have more details on that as we progress further and as the program develops. But I don't think it's contemplated that they would get reimbursed for this through the government.

Okay. And why not ketamine since that's your main drug?

So ketamine is available as a –

drug and so SAP is meant to give access to patients for drugs that are not currently approved for sale who have tried all other options.

Okay, got it. And then if you were using Spravato in the clinics, would there be more reimbursement available and if there would, why the decision not to go the Spravato route so far?

That's an area that we've looked at in some detail. Happy to have a more detailed conversation on it. You know, it is an expensive product. Not everybody gets coverage from it. It's also a medical question that our medical team is looking at, whether we can create the same sort of psychedelic experiences that we strive to create for our patients. So it's one we've explored and continue to explore, whether it would make sense to add it as an offering at the clinics. And today we haven't decided to, but we're continuing to look at it.

Okay. And if I could, just one more question. You had to get manufacturing and material prior to the Phase I starting. Is that still on schedule?

I'll hand that over to Nathan. Yes, that is. Okay, thank you.

Thank you. We have next question from the line of Elmer Piros with Roth Capital. Please go ahead.

Yes, good morning. Congratulations on the growth in the clinic business. And I just wanted to ask maybe a couple of housekeeping questions. I've seen that quarter over quarter total expenses were kept in check roughly. equal between second and third fiscal quarter, but some of the line items like occupancy costs, sales and marketing, and R&D actually declined. I was wondering if, Donna, you would be able to help us to project these numbers into the future.

It's just somewhat complicated here. And that question over to Donna.

Sorry, I was on mute. So I guess what I would like to say is that the R&D numbers are going to be chunky depending on the specific statement of works that we have with the CROs and CMOs. So while you might have seen a slight decrease in Q3 over Q2 from an R&D perspective, you can expect to see those numbers to ramp over the next several quarters as we move into our phase one clinical trials. In terms of the decrease in queue over queue for our sales and marketing expenses, with the hiring of Vicki Reed as our chief growth officer, we've started to take a detailed look at sort of our different acquisition channels from a marketing perspective. And so we're refining our searches, our digital and paid searches. And so, you know, we've actually received... most of our leads or references through our digital acquisition channel and through organic growth as opposed to paid search channels. So that's why you see the decrease in the sales and marketing as we are refining our business model and focusing on the clinics that we think that need more marketing and also changing the mix of the type of market sales and marketing services that are required. And I think from the occupancy cost, it's based on IFR 16, IFR 16 accounting. So that number there excludes the depreciation and amortization of the right of use assets. But if you look at sort of the occupancy cost on a cash basis in terms of the leases that we have, you will see an increase. Does that explain that?

Yes, yes, it does. And Donna, would you please share the weighted average share count that was used and also the shares outstanding by the end of December, please?

Yes, so for the quarter, the weighted average share number that we used was $57.8 million on both a basic and diluted basis.

Okay.

Do you need it on the nine-month end period?

No, and that's okay. And is this the share count by the end of December 31st as well?

Yes, that is correct.

Okay, thank you. And maybe just a general question about the site management organization services. What would you need to do some additional work that would qualify these sites? both in Canada and in the U.S., to conduct clinical trials there.

Hey, Elmer. We've been, so as you know, Stéphane Côté came on as our head of quality, and he's been working to help prepare sites for these types of trials. So we're fortunate that we already sort of have most of the staffing needed at each of the clinics to conduct these types of clinical trials. So we're in the process of putting together the SOPs and back office systems and insurance, et cetera, setting all of that sort of thing up, as well as in parallel to that, having discussions with potential partners who want to conduct trials at our clinics.

Thank you. And just a last question about the BFT200 group. Are you thinking about potentially chronic administration, potentially microdosing? What sort of indications would you have in mind for that research effort? I'll hand that over to Nathan.

It's probably still a little bit early to make any declarative statements on that, but yes, we are... it does open up the possibility of more frequent dosing without the risk of this cardiotoxicity kind of progression to take hold. We'll still have to do additional work in animal model studies to look at how we use this. But imagine, for example, that it could be a maintenance therapy, you know, post-treatment with either ketamine or FT-104, where you could actually administer it, you know, once a week or even more frequently than not if you were in a microdosing situation or even, you know, macrodosing. So it's sort of that kind of concept. I think it could get more widespread use and more frequent use.

Thank you very much, Nathan. That was all for me.

Thank you, Eleanor.

Thank you. To ask a question, participants may press star 1 on your touchtone telephone. We have a next question from the lineup, Jason McCarty with Maxim Group. Please go ahead.

Hey guys, this is Michael Kunowich on the line for Jason. Thank you for taking the question. Congrats on the growth in the quarter. So I'd like to see for the revenue growth, could you give a bit more color on the proportion of the growth that was from the two most mature clinics in New York and Toronto and how much of that came from the number of other clinics that you've opened? Is it largely driven by site-on-site or the addition of new sites which have started to gain traction?

I'll let Donna provide any color she'd like on that, and then I can add some comments after.

Hi. For the quarter, we experienced growth across all our clinics, not just our Toronto and New York clinics.

All right. Thank you very much. And then...

a shift towards more organic growth from the digital growth. That's a result of the efforts of our, you know, very successful brand building and PR campaigns that, you know, we have. And really word of mouth, you know, people coming to our clinics have often very positive feedback experiences and they like to, um, they like to talk about it, uh, with their family and friends. And so we get a lot of, uh, word of mouth referrals as well now. So, um, you know, and that way you can see that a clinic with a larger base of, uh, clients such as our, you know, more established clinics also get more organic word of mouth, uh, referrals. So that's, you know, the way we sort of see the evolution of a clinic is it takes more, put more of an effort behind, uh, marketing and especially paid marketing in the early months of a clinic's development to build the base out and then as it has more and more clients and awareness built around it, we can reduce that and continue growing via organic means.

All right, thank you for that caller. And then one more from me regarding the P1. Would you be looking at PK characteristics, which would help indicate how long a PPD patient may have to give up breastfeeding and what sort of target you would have to meet to have a competitive advantage over standard of care on that specific metric of clearance from bodily fluids?

Yeah, good question. We've already looked at most of the pharmacokinetics, at least in rodents, and I'd say the primary drug plus all the metabolites are cleared within, I'd say, about four hours. And if we look at the half-lives, I think we could project most of the metabolites and the primary active molecule would be gone definitely within 12. So putting some safety margin on that, that might be 24%. But those are hypothetical. You're right. We'll confirm that through the human study. But I'm going to say the PK profile and the duration of the psychoactive experience in a rodent does look to map very well with what is reported for the illicit substance for hydroxy-DIPT, being in the range of that two- to three-hour window, which is what we see with the rodent. So we think it's going to map what we saw in the metabolism of the animals we're going to see with man. Beyond that, we're going to have to confirm all that, not just through pharmacokinetics, but through lacteal transfer studies. Those can be run in animals at first, and then we'll capture milk in our PPD studies as we go forward, either through a specific study or as part of our Phase 2 program. we'll capture the milk and then do our analysis looking for our metabolites to confirm all that and then build the story. But the pharmacokinetics and the washout kinetics right now definitely look favorable for that. If I compare that to the standard of care, the current standard of care is either chronic You know, SSRIs, which don't work very well and take too long to kick in. So I sort of push them aside. This is a mother that needs help immediately. It's not necessarily going to be happy with an SSRI that takes six to eight weeks to kick in. So the other standard of care, which is the only other drug approved on the market, is Zolresso. which already the phase of treatment itself is three days. And then you have to wait at least two weeks for the drug to wash out. So you're looking at minimum of two weeks, if not more, that you're gonna have to deal with a washout. And their future drug from Sage is a 14-day treatment. with an additional two weeks on the back end of it. So you're looking at, you know, nearly a month without breastfeeding. Those kinds of things are not good for the bonding between the mother and the child, especially if it's necessary and wanted by the mother. And not being able to do it sometimes, that is a failure. So being able to get mothers back to their children very quickly for those that want to breastfeed is very important. And I think that's one of the four means that we just got to do the work.

All right. Thank you very much.

Thank you. We have next question from the line of Andrew. Which default? Please go ahead.

Hi. Thank you for taking my follow-up question. I apologize if you mentioned this previously. I might have been disconnected. But could you talk or give a little bit more color about, you know, what triggered choosing the additional site for Phase 1 and why was Australia

the jurisdiction?

Both Australia and the Netherlands have very lean means of getting into phase one. They're still very rigorous, but the whole approval process relies highly on the investigator themselves. So from a selection standpoint, there's not a lot of difference between the two. I will say there's an additional benefit in Australia is there's, like we have in Canada, a certain amount of financial reimbursement for using people, for working with people in the country, and that can be put back into the program. So it makes for some economical savings. But Overall, part of the reason was just the fact that both of them could do on the same kind of timeline. Beyond that, we've had experience with the group in Australia before in previous lives and before field trip. And so we had comfort with the group that we're looking at. And then the other factor that we were trying to weigh in was what was going on with the COVID situation. And with Omicron high numbers in Europe, And the site was having to shut down a couple of times, mainly because personnel who were getting sick and they didn't have enough personnel to staff the system. We looked at both sites and actually we felt that it was a little bit safer and better controlled in Australia. And so, you know, looking at the overall, it didn't change anything to move to Australia. but gave us additional security and additional comfort. So we made that switch. We signed with a group. The site selection is, I'm going to say, pretty much finalized. We know where we're going. And we're getting ready to submit our protocols to Essex. So we're on our pathway to phase one without actually having changed or have, you know, without increasing the risk.

We feel like we've reduced the risk. Appreciate that extra call there. Thank you. Thank you. We have next question from the line up.

Patrick Trucio with HC Wainwright. Please go ahead.

Hi. Thanks for taking the follow-up. Just a few more on FT-104. Just from the commentary in the release which noted that as a prodrug, FT-104 converts rapidly and completely after administration. and combine these properties resulted in improved drug absorption, more reproducible pharmacokinetic profile, and improved bioavailability, making it a superior drug candidate. I'm just wondering if you can further elaborate on the data that's been generated to demonstrate those attributes and if further details on that data is expected to be released at some point in the future.

Of course, I do think we'll eventually publish the data that we generated in animals so that you can see that. I don't know what additional color I can give you. I mean, I know, for example, when we did pharmacokinetics in rodents, and this is in our presentation, when we administer FT-104 in the bloodstream, all we see is hydroxy-DIPT. We see very, very little of the FT-104. Now, when we do the Phase I in humans, we'll be looking for both, obviously. We'll design the trial to look for it, but we know that it cleaves very fast. We see that in vitro. We see that in vivo, and we can compare it to what happens in biological matrices that come from humans, and we can compare that to the rodents, and we see a very close comparison, maybe even more so than when we did pharmacokinetics in other higher species. So we're very comfortable with the way it cleaves. We have some information from in vitro studies to know what is the mechanism of cleavage, and what promotes the cleavage within the biological matrix. At least we have some very strong sufficient, and we know we can inhibit those things that actually cleave it. So we've got a very good description, I think, of what's going on in terms of how FT-104 gets converted to hydroxy-DITT, gets into the system, and then all the pharmacokinetics that surround the molecules, and then all the metabolism. So that's part of that preclinical package that we've prepared. We've already shared it with the PI that would be running the study. They're very comfortable with it. It's very clear and quite complete. If that was all you were looking for, that's about as far as I can go right now. We definitely will publish it sometime in the future.

Yeah, that's helpful. And then just as part of the Phase I program, I'm wondering if you would expect to gather additional data regarding the psychedelic experience itself in addition to the length of the experience? And if so, what are your expectations around that data?

Oh, absolutely. We're going to capture that. We're going to use some of the standardized questionnaires that have been used with psychedelic substances in the past. and maybe applied in slightly different ways, but very, very closely. You know, the things like ASC and MEQ, which are the standardized alternate states of consciousness and the mystical experience questionnaires, which have been related to outcomes in depression. So we'll capture not only intensity of the experience, a little bit of the flavor, nature of the experience, but also the durations. And so, yeah, that totally is going to be captured. Recognize it's going to be in healthy volunteers and volunteers who've had some experience with psychoactive substances before, so they'll likely be able to characterize it quite well. And then we'll use that as information to decide on our doses that we'll go into phase two with. Obviously, the experience in a patient might be slightly different than that in healthy adults, but we feel like that's going to give us a very, very good window into the therapeutic doses that will be used in patients. It did for psilocybin. I think it will for FP104 since the pharmacology is very, very similar.

Got it. Thank you very much. Thank you.

We take the last question from the line of David Martin with Bloom-Burton. Please go ahead.

Yeah, thanks for taking the follow-up. What percent of the patients you treat are reimbursed right now, and what percent of those who seek treatment would you say have to walk away because there is no reimbursement for them? And are there steps you can take to increase coverage in addition to case-by-case efforts?

Thanks for the question, David. This is, I guess, the second question on the the payer percentage and mix. So that's maybe one that we'll put some more focus on in our next quarter. But I don't have the exact percentages, so maybe we can follow up with you on that one. But I do know that it is private pay, and cost is definitely one of the reasons why people not to proceed with the treatment. one of the barriers and one that, you know, we're hopeful that over time there'll be increasing coverage. We're seeing glimmers of that in different areas. We've got coverage for military veterans in Canada already. You know, there are some signs of increased openness from employers and different groups in the U.S. and people with different coverage plans. So we're starting We're starting to see that, but it's early days still. But our hope is that over the next few years, we'll see a greater percentage of people get coverage for these types of therapies. In terms of the exact mix right now, it's something that we can follow up with and look into those numbers for you.

Okay. And I did have one last question kind of linked to the last one. Will you use depression scales in the phase one? Because I know these are healthy volunteers, but everyone can potentially feel a little better. I know they're not getting the psychotherapy associated with the drug, but would you apply a depression scale in the phase one?

No, that wouldn't be appropriate. A person that came in and actually had depression probably wouldn't be considered healthy and allowed into the study just from an exclusion standpoint. And if a person that came in is healthy, not depressed, numbers would be so low there wouldn't be a lot of room for, you know, calculation and statistical analysis. So, no, I don't think that's appropriate in phase one.

Okay. I didn't think so, but thought I'd ask.

Thanks. Thank you, David.

Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I'd like to turn the call back to Ron and Levi for closing remarks. Over to you, sir.

Thank you, operator, and thank you to our investors for the support and to all the analysts for your questions today. The Fieldtrip team is proud of the business we have built as a leading psychedelic-assisted psychotherapy provider and highly recognized brand at the forefront of the psychedelic medicine movement. We continue to execute upon our strategic priorities of building our innovative drug research and development pipeline, as well as delivering and helping patients through our best-in-class clinic network. With that, I'll ask the operator to close the lines.

Thank you very much. Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines at this time. Thank you for your participation.