Good morning Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
BREAKING NEWS: Yesterday, the TGA published updates to the Authorised Prescriber scheme for psychedelic medicine like MDMA and Psilocybin:
(Source, TGA)
(Source: The Australian)
In 2023, the Australian government decided to downschedule psychedelic medicines from Schedule 9 to Schedule 8.
A world first. Unprecedented.
What this meant was that if a person had approved Authorised Prescriber status, they could legally provide psychedelic therapies in Australia.
And commercialise it.
The first-ever company to secure someone with AP status was my second Armchair Stock Pick: Emyria (ASX: EMD).
EMD provides mental health services through psychedelic-assisted therapies for people with PTSD and treatment-resistant depression in Australia.
Since it signed a deal with Medibank last year, it has been working to scale up its clinical offering.
(yes THAT Medbaink, Australia’s largest private health insurer)
In less than 12 months, EMD has grown from a single clinic in Perth to clinics all around Australia.
Perth. Brisbane. Melbourne. Sydney.
It is on a journey to massively scale up its services.
The biggest challenge EMD faces in filling beds in its clinics is not demand.
It’s supply.
In particular, the supply of trained therapists and authorised prescribers.
What do you need to run a psychedelic therapy?
A clinic.
A room.
An Authorised Prescriber to monitor multiple rooms at once.
Two therapists per room.
Of the two therapists, one needed to be a clinical psychologist.
… until yesterday.
Now, the TGA has expanded this requirement to:
Nurses/Midwives with mental health experience
Occupational Therapists
What does this mean for Emyria?
I like to think of this ‘scale up’ journey like navigating traffic on the highway.
Demand isn’t the issue.
There are plenty of cars trying to get onto the freeway.
The problem is the bottleneck.
Supply.
And Emyria’s goal is to get as much traffic off the highway as possible and treat as many patients as possible.
Until yesterday, every psychedelic therapy room effectively required a clinical psychologist.
These factors made clinical psychologists the single open lane on a packed freeway.
No matter how many patients wanted treatment, or how many clinics EMD opened, traffic could only move as fast as that one lane allowed.
Yesterday’s TGA update effectively opened additional lanes.
Now, experienced mental health nurses and occupational therapists can also help deliver therapy.
Throughput increased.
Each car getting off the freeway = one dosing session.
Each dosing session = $10,000 for Emyria.
So the more cars that get off the freeway, the more revenue EMD can make.
Traffic jams on the exit ramp are the biggest bottleneck for EMD.
Emyria is working ahead of the bottlenecks to open new clinics, make more rooms available and train more authorised prescribers.
But the availability of clinical psychologists is its most pressing.
The real unlock for EMD, is when the TGA includes registered psychiatrists and social workers as part of these minimum requirements.
That's when the three-lane exit ramp opens up, and many more cars can get off the freeway.
Lobbying is underway.
Importantly, the changes show that the TGA is open to consulting with industry and making changes.
I think that the TGA looked at how the medical cannabis industry went and the well-documented issues with overprescription from some of the big players in the industry.
It didn’t want a repeat, so it has taken a cautious approach.
Armchair Takeaway
One of the biggest challenges facing EMD’s rollout hasn’t been demand.
The demand is there.
The challenge has been staffing enough therapy rooms to actually treat patients.
Growing pains of a scaling business.
Until yesterday, every dosing session effectively relied on access to a clinical psychologist, creating a major bottleneck as EMD expands clinics around Australia.
That bottleneck has now eased.
New exit lanes have opened up, and hopefully, more are to come.
Keep an eye out for any new regulatory changes on registered psychiatrists or social workers.
That will be when the true scale-up occurs.
Disclosure: I own 2,000,000 EMD shares. EMD has engaged Armchair Analyst Media for investor awareness services.
This information is general in nature and does not constitute personal financial advice.
Read more about Emyria (ASX: EMD) - My second Armchair Pick.
Let’s dive in…
The Pulse Check
Tetratherix (ASX: TTX) secures $15M in an institutional placement at $6 and a $2M Share Purchase Plan. (TTX)
🪑 Well done to Will and the team! This raise sets the company up for a long time.
Tetratherix is also in my Armchair Stock Portfolio.
I participated in the raise.
Acrux (ASX: ACR) has amended its licensing agreement for Lenzetto (hormone replacement therapy), securing up to AUD 5.4M in milestone payments over two years. (ACR)
🪑 The market loved this announcement. I took in the recent placement and “top sliced” on the volumes today.
No capital gains tax on that sale 💪.
Actinogen (ASX: ACW) receives EMA advice, aligned with FDA guidance, on the potential registration of its Alzheimer’s drug. (ACW)
🪑 Clarity is always good.
After these results in November (provided they are good), it is essentially one more pivotal Phase 3 trial for registration in BOTH the US and Europe.
Clever Culture Systems (ASX: CC5) has added a new top-20 global pharmaceutical company as a customer over the last 12-months. Now chasing US$50M in pipeline for FY2027. (CC5)
🪑 Looks like everything is on the right track.
Good commercial update.
BCAL Diagnostics (ASX: BDX) signs a validation agreement with Sonic Healthcare USA to validate BreastestPlus™ V2 in a CLIA-certified lab. (BDX)
🪑 Nice update.
OncoSil Medical (ASX: OSL) secures ethics approval for its Italian clinical registry. (OSL)
Australian Clinical Labs (ASX: ACL) appoints Greg Horan as new Group CEO and Executive Director. (ACL)
Immutep (ASX: IMM) will report data at ASCO regarding the median overall survival improvement of its efti product across multiple clinical trials. (IMM)
🪑 The market probably needs to see the results of the investigation into why the company failed its interim futility analysis before crediting further data analysis.
Imugene (ASX: IMU) doses first patient in the BTK inhibitor combination cohort of its Phase 1b azer-cel study. (IMU)
🪑 Off to the races!
Nexalis Therapeutics (ASX: NX1) secures a new (refinanced) $53M non-dilutive funding facility from Point8 Capital to replace its existing debt facility. (NX1)
🪑 Bit messy this one.
It was always a unique facility - effectively a “leveraged clinical trial bet”. Reading between the lines, the original debt holders appeared to rethink their risk appetite - cancelling the funding arrangement.
Point8 Capital is now the third group to hold this debt facility.
Subject to a shareholder vote.
Report: Scientist behind $2.8b cancer breakthrough says CGT will kill innovation. (AFR)
🪑 Some good lobbying is going on by the industry on this front. Nice work.
See you all tomorrow,
The Armchair Analyst.
