Fireside Conversation with Emyria

Good morning Armchair Army,

Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.

Yesterday, I hosted an investor update with Emyria (ASX: EMD):

Emyria is building a national network of clinics in Australia, specialising in the delivery of psychedelic therapies for PTSD and treatment-resistant depression.

Emyria is also one of just two companies I have announced as my high-conviction Armchair Analyst Picks.

At 4 cents, Emyria (EMD) is capped at ~$32 million with $9 million in the bank (as of March 31st).

Since the company signed a deal with Medibank last year, it has grown from one clinic in Perth to five clinics across Perth, Brisbane, Melbourne and Sydney.

In this update, we went through:

(The whole video is about 25 minutes and is worth a listen)

There were probably two things that stood out to me.

FIRST, this was the first time that Emyria had discussed the pathway to profitability on a per-clinic basis… (Timestamp: 7:18)

Emyria’s Perth clinic (the most mature) will make 30 bookings in June.

Each session = $10,000.

30 Bookings = $300,000 in revenue.

… for the month.

Emyria has a capacity for 80 bookings at this clinic.

… so it is still running at a fraction of the total capacity.

Maintaining this level without growth will result in this clinic doing $3.6 million in the next financial year.

And that’s for 1 clinic. With no growth baked in.

The other three clinics are about several months behind Perth, in terms of ramp-up to breakeven. 

Breakeven is at 15 to 20 bookings per month and should take 9-12 months.

Here is where the other clinics sit:

We discussed the drivers of this growth.

It’s not demand, but supply.

Specifically, the supply of “lead therapists” who are trained and available to conduct sessions. (Timestamp: 11:40)

This is where the TGA Changes come in.

The TGA recently made changes to expand who could be the lead therapist, to include nurses and occupational thearpists with mental health training:

The real unlock for Emyria is yet to come when psychologists are enabled to be “lead” therapists.

This is when we will see that bottleneck lifted, driving capacity growth towards that 75-80%.

So, as more clinics open up and ramp towards breakeven (and beyond), we can start to paint a picture of how Emyria will build a profitable business.

And quickly….

SECOND, we discussed Emyria’s place in the global psychedelics industry. (Timestamp: 13:30)

Emyria plans to leverage its network of clinics and trained therapists to support US-based and other global companies to conduct psychedelic clinical trials.

This essentially opens the pool of people who can access Emyria’s therapies without paying out of pocket.

Right now, that pool is limited to:

But if a person goes on a clinical trial, it's the sponsor that will pay for the therapy, not the patient.

Depending on the trial, Emyria could generate more revenue for the business at a lower cost (depending on the staffing requirements).

Right now, Emyria just treats PTSD and Treatment-Resistant Depression.

But there are hundreds of trials for different mental health conditions that are being run around the world:

Two days ago, the Sydney Morning Herald published an article on Monash University’s clinical trial for psychadleics on lingering concussion symptoms:

Here it is on the Six O’Clock News last night:

More and more trials like this are cropping up, and there are only so many organisations with the trained workforce and facilities to support.

Emyria is in pole position.

We also discussed Emryia’s global headstart in the delivery of psychedelic therapy. (Timestamp: 19.15)

And how will it position itself WHEN psychedelic medicine eventually gets approved in the US.

“We’ve effectively written the psychedelic-assisted therapy playbook… what we will be able to do is to leverage this playbook to facilitate the delivery of the drug in other jurisdictions” Chairman Greg Hutchinson said.

This is the bluesky upside that I personally see for Emyria, alongside its scaling clinical services business in Australia.

Disclosure: Armchair Analyst Media Pty Ltd owns 2,000,000 shares in EMD. EMD has engaged Armchair Analyst Media for investor awareness services.

This information is general in nature and does not constitute personal financial advice.

Let’s dive in…

Island Pharmaceuticals (ASX: ILA) secures FDA Orphan Drug Designation for Galidesivir. (ILA)

🪑 Nice.

Grants 7 years of market exclusivity, which should add to the ultimate value of the asset if it is able to come to market.

Percheron Therapeutics (ASX: PER) completed the manufacturing run of its HMBD-002 drug substance for its Phase 2 cancer trial in the second half of this year. (PER)

🪑 Milestone ticked.

This is also the trigger for the final US$1M payment to the original vendors, “Hummingbird”.

Neurizon Therapeutics (ASX: NUZ) has secured a long-term supply agreement with Elanco Animal Health for the API (key ingredient) of its NUZ-001 drug for neurodegenerative diseases. (NUZ)

Osteopore (ASX: OSX) delivers the first order in a five-year partnership with DKSH Malaysia for dental products. (OSX)

Algorae Pharmaceuticals (ASX: 1AI) proposed issuing 2 million shares at 1.2 cents per share for cash consideration. (1AI)

🪑 A grand total raised of $24,000 in probably the smallest “capital raise” if you can call it that… for the year.

“Funds raised from the issue of shares will be used towards the Company’s working capital”.

So strange.

Conneqt Health (ASX: CQT) requests a trading halt pending a capital raise. (CQT)

See you all tomorrow,

The Armchair Analyst