Numinus Wellness Inc.

Q1 2022 Earnings Conference Call


spk_0: good afternoon and welcome to know minutes while it's a fifth of first quarter twenty twenty two a result conference call a question and answer session for analyst and institutional investors will follow a formal remarks as a reminder that college were recorded i would now like to turn in a conference call over to your host gaining a kafka vice president investor relations with proceed
spk_1: thank you for a good afternoon everyone and thank you for joining up for a proper quarter twenty twenty cheaper got offered up the fucking eminent with performer today or peyton i watch founder and ceo and john fong chief financial officer joining them for an old fashioned but the end of our formal remark with evan what chief medical officer the bali depression may include forward looking statements that are based on current expectation and are subject to a number of breath and uncertainty the a senator and of thirty that could condor actual financial operating results to differ significantly from are forward looking statements are you feel better and get a for the quarter ended up ever thirtieth twenty twenty one and in our other canadian security by ireland available on feet are numerous does not undertake to update or revise and are looking statements to reflect knew about your circumstances effect of required by law or first quarter results are made available earlier this afternoon we encourage you to read you are earning to leave and dna and financial statements which are available on our website about the dot com as a reminder of figures a catholic the call her canadian dollars on outrun the color to pick night but keep executive officer
spk_2: they say we can good afternoon everybody before i provide my comment has acknowledged in our lives earnings call again i'd like to extend the utmost gratitude and i were to conducted on the untreated homeland of the much korean squamish and play which of people and on the sovereign indigenous land and territory the crossed her island they are committed to a path toward reconciliation through continuous learning reciprocity and humility our first quarter laid the groundwork for many of the milestones we've achieved over the last several weeks we completed the acquisition of the neurology center of toronto and developed the clinic integration process to follow of you continue building out or wellness clinic network we launched ketamine assisted psychotherapy for depression services and developed a formal training program for therapist though allow us to further expand its offering we completed a clinical trial protocols for the upcoming study for a proprietary natural soliciting formulation which would be enrolling archers of ensued as soon as regulatory approvals are granted he began work on several several interesting discoveries and adnan his bow ties and some of which have already led the development of at an application
spk_1: and we prepared for uplifting to the toronto stock exchange which occurred on december sixteenth
spk_2: even with all this work underway and pleased to say that both of our business division are meaningful revenue growth in the first quarter compared to the previous quarter
spk_1: dumas health saw revenues increased sixty two percent and the newman is bio science saw revenue growth of six fifty six percent sequentially from que for twenty twenty one so we're very pleased with how our business is performing and our growth strategy is progressing
spk_2: now let me discuss our recent activity the more detail
spk_1: and yemenis health all five of our wellness clinic saw increase incline appointments compared to the previous quarter with ongoing demand in traditional therapy services and increase the interest and ketamine assisted psychotherapy it
spk_2: overall kind appointment throughout our one with clinics increase ninety two percent compared to the previous quarter supported in part by the acquisition of be neurology center of toronto in september on a face or basis not including ncp important appointment greece still group and impressive forty two percent relative the last quarter the amendments health canada made to the special access program just this month have further increased inquiries about accessing other psychedelic assisted psychotherapy this announcer was a major milestone for canadian seeking access to nontraditional treatments including the use of psychedelic medicines and we are continuing to work closely with health canada and in our clinics in order to provide those who qualify for the psychedelic assisted therapy treatments they need
spk_1: ketamine for depression treatments were initially launched in two of our locations during the fiscal first quarter
spk_2: initial interest in the services has been very positive and we're in the process of expanding know services to to mechanics now this is due in part to i recently finalize ketamine assisted psychotherapy training program for therapists which will soon be provided to virtual training sessions scheduled over the next two months this training program will expand the number of new minutes therapists qualified to provide cap sessions to kind of will allow us to further the scale these services as we glory grow our clinic network we expect future training programs for other psychedelic therapies can be based on this training program and will ensure consistent quality care will be available to our clients with the cheat with their choose chosen therapist at any of our wellness location as i mentioned earlier in september we welcome the addition of the neurology center of trial this acquisition has provided us with an important entry into the toronto market with a well respected and revenue producing medical clinic and is providing incremental cash flows to our clinic operation it will also expand our service offering to provide psychedelic it's to care for those suffering with neurological condition something that the for that further differentiates new medicines wellness services from other providers and are sector as a reminder all of our wellness clinics provide a wide range of mental health care services alongside psychedelic assisted treatment and these include traditional therapies group therapy is couple therapy and now neurological care collectively the services will continue to drive reliable revenue streams and cash flows across our clinic network as we grow our psychedelic therapy offering in line with regulatory reform the recent changes to canada special access program will now allow us to apply for patients to access scylla five and an md it may assisted therapy when approved and out by of canada and we're pleased to be able to offer these therapies with some of them most highly trained therapist throughout our network of purpose renovated clinics designed for do specific treatment our expertise and experience and providing me psychedelic therapies demonstrated to our involvement with map sponsored an in research trials in something that we're very proud of in fact we're about to launch to clinical studies to further advanced research on the merits of both sell aside formulation and mtv during therapy first we're excited to begin the phase one study of our own proprietary naturally derived so aside extract formulation the application for this two part study known as hope has already been submitted to health canada and following their anticipated approval will begin this clinical trial in partnership with a contract with research organization to ensure it's with completion and full compliance with drug development expectations of health regulators this proprietary formula one's or develops to steadily deliver suicide aside and and others just synergistic compound and is derived using a patent pending technology developed in our lab the first phase will specifically evaluate the bioavailability and tolerability on this formulation among healthy volunteers we expected begin unrolling volunteers for the study of the next few weeks assuming a positive results from our and from phase one we anticipate this study will lead directly to update to clinical study to evaluate the after to be a good product
spk_1: and as we announced yesterday we are also very pleased to have completed the necessary steps to begin in raleigh part participants for the maps public benefit corporation study to evaluate mdm a fuss in psychotherapy for post traumatic stress disorder
spk_2: the study has recently received regulatory approval from health canada ethical approval from institute from and institutional review board and section fifty six exemption from the control dragon substances act which allows us to you than the a me throughout the duration of the clinical trial this trial will be open to eligible canadian participants who were previously enrolled in the placebo arm of the at be a bit of the maps parents daddy who are unable to receive treatment due to call the nineteen restrictions nebulous is hosting and managing the canadian sites for this trial and it's to new research clinic in montreal and vancouver there's an exciting next steps for the maps extension study and mdm a assisted therapy is we look forward to collaborating often with maps more closely in the future i knew minutes by science we are continuing to make remarkable discoveries and expect to submit additional fat in the coming quarters keep focuses on delivering products and formulations that can be implemented in therapy and future patents patent applications will most likely be related to efficient processes affected formulation and the discovery of bioactive pathways
spk_1: as a reminder are concentrating on defensible research and innovation the as well as establishing a sad wishing research excellence and compliance for regulatory bodies
spk_2: just recently acquired several a deaf additional species of psychedelic mushrooms which will further expand the breadth of our research and expect to make more money more discoveries that are yet have not yet published genetic testing of these mushrooms speak is already underway during the first quarter we'd also develop proprietary psychedelic drug cat with talk with new toxicity and pontiff can't you do tests have accelerated newness his research capabilities and may also generate new revenue streams to third party testing for product testing overall we're pleased with how our business perform during the quarter with strong revenue growth achieved in both our business divisions positive gross margins and some early indication early indications margin expand margin expansion will continue as we benefit from the economies of scale and the standardization of clinical says we're proud of the fact that we're building a business model that can scale rapidly and look forward to seeing the benefits of the strategy as we execute our growth strategy with that on i'll turn the all over to john to review the first quarter financial results in more detail after which will provide some commentary on the outlook
spk_3: have a huge on
spk_2: punk bateman good afternoon everybody our first quarter results work like many of the crock initiative to meet undertaken in the last year
spk_1: bought the acquisition that my face and the neurology ton of toronto party be to try connecticut year over year revenue growth or positive positive cross margin cannot be bouncing around the white that much like clinic archive in total revenue for the first quarter growth sixty point nine percent from just last quarter and more than doubled from the hard quarter last year
spk_4: seven hundred and ninety thousand
spk_1: our clinic operations pretty eighty percent of iraqi that quarter compared to just fourteen percent nothing a last year
spk_4: demonstrating the chef and are different more polite are fighting an increasing number of as
spk_2: fourth quarter revenue from the nfl what could kind of the forty thousand or fifty two percent increase from just last quarter
spk_1: on unama twenty four increase in the thirty three thousand and generated in same quarter last year in the are had generated one hundred forty two thousand and during the first quarter six percent increase from last quarter or twenty point but a twenty percent decline com que one last year and we see canada's night activities throughout the past year to go get our resources on a batting a psychedelic entered service on
spk_4: while i business as clown or copyright he has increased left the ravine grow with provided a positive gross margin of six point five percent during the first quarter in line when our previous quarter and a meaningful improvement of a negative sixteen point stag mark and generated in the first quarter last year total gross profit for the first quarter to one point you what with the one thousand or fifty or sixty percent increase from awkward moment cause began generating part of gross profit
spk_2: overall corporate expected crew alongside expansion of after that and pulled at five point three million during the quarter compared to one point nine million in the phone or last year
spk_4: included in that corner of expenses for transaction costs related to the actions of and country
spk_2: i felt the market expensive and a two hundred and sixty eight percent increase in research and development acronym compared with the same quarter a year ago
spk_4: over on cash cow catch our home during the quarter from point a gun and line what i expect it should have one or two million from that what our content of platform the loss of the quarter with five point five million or three cents per share what you the thirteen percent improvement compared to six point you know about screen could just laugh product excluded a non cash i'm gonna charge reminds me
spk_1: in terms of liquidity the end of the quarter with a strong balance sheet and fifty three point nine them a cash on hand and what about nutrients offering them of are expensive we continue to be well positioned and actually putting up with a model and pursue our long term strategy
spk_4: and about oregon york natural result or protocol back over to pay for them called on march thing
spk_1: a strong
spk_2: health canada the men wrench to a special access program and significant first step towards what we hope will be an even greater access to psychedelic assisted therapy than the future a positive feedback health canada received from it's stakeholders and the public about the support for psychedelic medicines and particular a given us and even more confident that the public opinion and positive clinically clinics research results will drive further accessibility to the important medicines and therapy than the future nip that in mind we are committed to our growth strategy of building a world class portfolio of client favorite wellness clinic and will locator to where we think regulatory reform will lead in three to five years from now with clinics designed specifically to provide the bat very best set and setting for all types of psychedelic therapies in future alongside a variety of support of traditional therapy services compared to other clinic operators in her sector you know in differentiated by delivering a holistic and wide ranging offer offering of mental health services
spk_1: the strategy also ensures that our clinic revenue streams are well diversified and always anchored with my rock reliable cashflows generated through traditional therapy and neurological services
spk_2: as comprehensive approach also helps to build a community of loyal clients who feel safe understood and welcome better clinic which in turn build long lasting repeat customer relationships we have also already invested time and capital in develop into developing the infrastructure needed to efficiently operate a network with clinic and believe that these technology hr and training processes allowed to drive margin expansion as we leverage economies of scale growing fallen we continue to review clinic growth opportunities across north america and have already identified several potentially attractive additions to for our business we aim to add at least five additional clinics to our platform by the end of twenty twenty two and potentially more but as i've said before a clinic expansion strategy is grounded in what work strategically and economically we're focused on building our brand awareness and operational scale while also driving margin improvement in the business
spk_1: so we only pursue opportunities that meet all of our criteria
spk_2: until we complete our clinic due diligence market research and acquisition negotiation no opportunities guaranteed i love florida updating you over the course of the year as discussions with these clinics owners progress as investors gain a better understanding of the drivers of the set and psychedelic sector are beginning to see renewed interest in the space other a variety of companies focus on different aspects of the industry we remain confident in our market position and our growth strategy going for our specifically in a strong balance sheet with more than fifty four million dollars of cash on hand regenerating we're generating growing revenue streams in both of our business segments and are working with some of the industry's most respected organizations including maps
spk_1: i expect we'll see some consolidation in our sector over the seven next several quarters with those of us who are well capitalized and strategically differentiated given the opportunity to capture a larger share of the market
spk_2: we're very pleased with our methodical approach to growth with the investments in scale a bull infrastructure and are establish revenue streams and minimal cash burn and primarily from had firmly position us to be a growth focused leader in the sector
spk_5: and with that and i feel than the call to questions from analysts and institutional investors
spk_0: what would you operator thing you have this time and with lights reminds everyone in order to ask a question press star than the number one on your cell phone keypad again that a star than the number one on your telephone keep an open were just a moment to compile like who any roster
spk_2: the other question from the for a monetary when eight capital your line is open
spk_6: thanks and good afternoon congrats on the margin improvement in august for your leadership positioning continues to be even more salient day by day oh and just a question for me on the sky with the supply side and when you run some speak about your position
spk_2: the holdover dealers license
spk_6: add to that position you right now with as a people that and differently than a month ago to have increased discussions with
spk_2: any party is that are interested in accessing
spk_6: you are active ingredient some kind of characterize that
spk_2: if that has changed
spk_1: the i can catch on that cricklade peyton and then i have be handed over to avid but you know that the changes to the special access program
spk_2: i'm clearly not if he had come fairly quickly and i think a lot of groups are are still trying to figure out
spk_1: howdy supply side for and special access is going to work though he were definitely uniquely situated not only with with the life and thing that we've got but i'll talk familiarity with the compound then and with health canada but i have an hour and on of you have any comments about that
spk_7: the i think i'm certainly eat for us producers of psychedelic products a letter that would be organization like you so now one more match to be in but import ah into canada
spk_5: our organizations will need to have a controlled our regulars license too young to do that so
spk_2: so that's important answer is that what was are what was your other question
spk_8: and just with regards to i guess if you can increase in discussions with people interested in your supplying weathered side been a or other active ingredients that as picked up front of the upper lawyer if things are still pennington than your your conditioning
spk_1: distribute
spk_2: yeah yeah thought citing it's it's fair to share and been else not be cheaper that were absolutely in conversation with different routes in terms of fun of supplying a partnership and out again but i like a copycat your more the out in terms of bomb
spk_7: are any sort of agreement him things that have been reached around bad as and be the lead into the issue that a bit of a unique our situation with that a lack of program because it's really it's not for psychedelic that for all substances and normally a drug would have a single you know company bringing for the patented drug war and the can use of of psilocybin there's a number of groups including now that are developing products in a cave and and dna it's really just not matter if it is the been drugged developer the dog and font and so we're working when i will continue to work closely with larkin and and for a long product developmental and looking to are you know align our efforts with bad and and i feel pretty confident that within a good job without but are probably probably nothing more than
spk_2: after putting out in of and the public domain a job at more formal agreement or reached perfect and i think you lead right into my next question around gun and he am by any ability to kind of move forward on ambien may will likely be linked to marks and new as are obviously of their key canadian partner side latino or i had how does the access to the compound itself and i differ for other players races for you when you're out for jones license and will
spk_7: relationship would would would companies and networks of clinics be reaching out to maps or would it be reaching out to you peyton maybe i'll just jump in there i think you know both our organization and maps or about access and so on he the i can't really speak from outside perspective on it certainly are dealers license would enable us to support other efforts ah i'm and you know at that point
spk_5: matched his focus is really on getting approval through the ft a and health canada wickets drug our and won't wanna be the know just just really thing it's product willy nilly ah to groups that town you know aren't being appropriately that it to ensure they can deliver them out intervention safely and according to the protocols and
spk_7: obviously we got lots of experience with else are we we liked if you like we're we're well positioned with them but i'm really in terms of bottle who they're providing drug to and and and how they'll go about that is really is really a lot slower a yellow from my conversations with under in other they're up to their elbows in a three their second phase three trial and pizza their focus but they're also but access and probation suffering what battery and our list of ptsd is this program now opening ah
spk_2: there certainly obviously interested to see that this money
spk_6: that he would be potentially a conduit for
spk_2: not to other and with with that different began to require ammo you're deserves a simulation serve to connors
spk_7: of basically how do you do that those forms and get the supply from not stripper patients
spk_2: the paid maybe i'll i'll i'll let you ensure that the i think the existing relationship certainly letters lot of get off the ground and and start to get application them while while we continue to explore more opportunities to work with matt
spk_7: understood and what is the nature of the application process right now as you and there's a concurring with their application of themselves and kind of having a can find the car calendar or had there been approvals that have come to already knew how to characterize my we are yeah i can i can jump in with that so he added the couple of thing if there's the drug supply that needs to be ah you know acceptable to help canada and and into the drugs product provision is an important consideration and any the other is the in clinic readiness so you know appropriately trained therapist the physical infrastructure in all of the a man consent forms and screening and fifty elements that you know we have a a fair amount of experience with and then that that like that for run its or individual patients are you individual physicians will apply on their behalf off or if they need that furious for life threatening condition so all of that you can imagine a job as being work through right now job everything from the supply to a thief forget not have lots a new intervention and i the get off for organization worry about you know safe and accessible said that if i were you i'd act
spk_1: just that also making sure that we do this properly so that jam in addition a setbacks for patients or obviously the industry with by not taking in a great great care with that with the delivery of the intervention so on i expect we'll add much more to share on the next quarterly updates and lot of the i probably shouldn't ignore that
spk_2: okay so would it be corrected in there's some sort of pre qualification process in place like you're saying to kind of the understand their patients that are qualified before you apply to canada or that
spk_7: you already have an ability to do that and are you kind of assembling a roster of different patient groups and during an altogether as incremental acute care to characters kittens you yeah yeah can we can be the multiple conversations with al canada and had been really clear that the their preference and and and different groups can say different things but street from the horse's mouth like out canada it they really one of see individual after visions applying on behalf of individual patients
spk_5: they don't want to feed in a sort of cobalt shall apply for and on bachelor game so so they're really looking to on dalhousie be a special banana be defined for individual patients that distinction being from other you know a comparison to branch ensure you are huge advantage as program at which concern
spk_7: on the couch for and dna and it's a limited number of patients under a protocol whereas the health canada special offers for man technically doesn't tie dozen places had limit it's actually that individual positions on behalf of individual patients under any more noble knights me go in terms of their willingness to us to grant access to these these medications that on yet approved in canada on my hunch is no they're gonna be looking for an appropriate diagnoses of eligible patients and organizations with i guess tradition the embedded that can safely deliver these interventions and camps
spk_2: i would you like a lot of fishing to do beneficial
spk_5: particularly i gather at the mgm may have from matt the training from matt that number of your clinicians half of it is that every clinician the you currently have that's trained and not deliberate as adam majority to their carbon
spk_7: yeah i don't have that number and funny but i think of the top of my head into a coke and twenty six million affiliated arabic to done the training that will be the maybe and under estimate i feel that that the vast majority of the corn human a therapist had said done the not training and and or or or in the map training right now yeah out of your point about you know particularly and dna i certainly feel like we're well positioned with and dna because the either the trials that we done with not not work with them going back on time but i i actually think we have a number of industry leaders of expertise and fill the five and assisted psychotherapy in a thought leadership in our team that have done the i as training and have gone to you know i'm actually participate in legal so if i mean if it's and psychotherapy for granted part of the practical training and the look at the been doing to prepare ourselves for it defeats one trials on the side and i i feel like we're we're we're very well pradesh
spk_2: trump atlanta georgia i feel lucky enough to really across the figured out what you were using certainly and i thank you letter and into my next question on that south side than trial that your during which side been a i understand there's a ticket to components the study and our second one you're doing the same company has a competitor
spk_5: arm comparing to synthetic so five and i will there be an intern read out the after the first part is done where you compare just alone
spk_7: yeah that our intention because the gorged you know the the landscape after not an apology perspective against is shifting so what you're gonna teach that up the trial with an off ramp if regulations wanted a change for instance and and and canada want you establish are in a sort of a medical outfits regime for suicide and because i think she'll have i been as a naturally occurring molecule that the historical use said that kind of they could medicine for hundreds of years watch a different type of regulatory regime that of that i can be able to the synthetic biology that kind of honor the drug development pathway so yeah we we we would on the probably off ramp to you know that sort of medical as
spk_2: model and then buffeted be is intended to be on out a totally traditional regular extra development path towards and ft a kind of how canada people with a comparative that will generally be necessary and days long as part of bottom would in a block the president of the case to under that drug development path understood and like what you think about in terms of timelines and and and for the northern i concur peyton was mentioning app
spk_6: pursuing the work with a cr out kind of accelerate dash and
spk_2: are you kind of think about the timing i know in their current environment such a non timing
spk_5: in road accidents i'm rick help you volunteer as i imagine good might be able to get me yeah i the i'm coming i don't think involving will be yeah you're damn right i don't think begin rolling will be a challenge at some it's probably more the up just the regulatory issues that are beyond our control know we're working with the contract research organization i either huge lot of confidence in the protocol and no all of that sort of rigorous activity that goes into a clinical trial but you know regulators and health canada and their approval process the what kind of at the mercy and you know and i don't think anybody are on the call nine them i'm evelyn it have gathered to work in the on the federal and so these types of thing some great believe that are difficult to forecast by on yeah you've reached the milestone of of having everything out to the point where it's that it help canada for them with you on in a her doctor moon according to the usual schedule like that will get into a moment in the spring and
spk_2: this is gonna be why these clinical trials that takes you to roll people are like will get url and roll people rapidly and called out that party of the study and be able to report out on that quite quickly
spk_0: understood understood and then just with regards to get the timing as we get to kind of springtime discussion is there's going to be marred talk around on regulation changes down soccer us a midterm elections
spk_2: there's a west coast of the us seem more particularly enticing when it comes for expansion opportunities because of some of deregulation or is it just the area that you see my medical to me reimbursement like how do you think about expansion of templates buzzwords priority but it can scale the geographic split are the kind of canada's priority right now because of the audacity program occasionally to god and then i kept and color of your yes guy can opener certainly in other the the changes to the asap program while continuing to sort of validate the approach we taken around book is a in canada really now looking to transition and expand into the us as well the in terms of of the west coast that i think it's more so a few he follow the track of of similar decriminalization movement there certainly states and jurisdiction that are
spk_1: maybe area lot more educated are are interested in like it alec their be and and that a stronger support of it became the watching the at the oregon
spk_2: phyllis and movement that's been happening and and they still some more clarity that needed their to to better understand but that python is going to look like by i think in terms of expansion certainly the state like california are are very
spk_5: he there are demonstrating an interest in psychedelic therapy through the the decriminalization of it but but certainly
spk_7: spread out a little bit so so will continue to to focus on those jurisdictions that have shown that a keen interest in in psychedelic therapy but even if you got any more fat that of the depends on a molecule i think i totally agree with what you've said damn and certainly ketamine i don't think there's a a geographic split and more interesting and you know that you're now even in texas and some these other more like and states that i'm looking at what right to trial legislation and it seems like ah
spk_6: psychedelics not going to have the thing on a cultural baggage that cannabis has been to me that mama talking about first responders on veterans across the board on you know eat during that sort of like rights let ah
spk_2: no less ghost vs enough sudden and us gonna of thinking so i think god you know in my own experience in canada some of the biggest on policy reforms came under more conservative women government show on yeah i just remains to be seen how this all unfold
spk_9: like you so much for their deep inside as always and congrats on the top line growth and and then my fifty nine cash puts sooner strong position that smirk a television and looks be home in the streets or excitedly looking forward and
spk_0: will continue spoil her back in the gif
spk_2: i said thank you there are no further questions at this time i would now like to turn a call back over to came back of this ceo
spk_0: at

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