Alternative Treatment Providers Emerging as Key Agents in Combating National Mental Health Crisis

As the national mental health crisis continues to escalate, more people are turning to alternative treatment providers for assistance, and it’s creating a unique opportunity for fast-acting investors. 

Currently, 26% of Americans age 18 and over (approximately 1 in 4 adults), suffer from a diagnosable mental disorder in a given year, according to John Hopkins Medicine.¹

In Canada, more than 6.7 million people live with a mental health problem or illness.² In addition, 1 in 4 Canadian adults screened positive for symptoms of depression, anxiety, or posttraumatic stress disorder (PTSD) in the spring of 2021.³

In response to these numbers and the perceived ineffectiveness of many traditional treatments, many states and countries are turning to alternative treatment methods like psychedelics for therapeutic purposes.

For instance, Atlanta is now considering decriminalizing “magic mushrooms” and other psychedelics.⁴ Meanwhile, San Francisco has already decriminalized them.⁵

In Canada, psychedelics are also being welcomed into the mainstream of mental health treatment.⁶

Why Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) is a Company to Watch in the Coming Weeks, Months & Years

As the psychedelics market continues to grow and take shape, it’s companies that combine high-quality product offerings with integrated mental health care treatment options may have the best chance of standing out.

Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) is quickly proving this to be true. Its acquisition of Novamind in June instantly made it a top revenue-producing psychedelics company.

As a result of the acquisition, Numinus now operates 13 wellness clinics, four clinical research facilities and a dedicated psychedelics research lab – positioning the company as a leading integrated mental wellness company providing ketamine- and psychedelic-assisted therapies. 

In addition to that acquisition, Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) has made a series of other moves that have allowed it to build a firm foundation in the growing alternative health market.

For instance, in June the company introduced a new visual brand identity meant to better illustrate its continued growth as a leading mental health care company providing psychedelic-assisted therapies across North America.

Then in September, Numinus announced that its Toronto clinic, the Neurology Centre of Toronto by Numinus, had begun offering ketamine-assisted therapy for patients with neurologic conditions.

Amid these announcements, the company reported strong Q3 results in July, including revenues that were up approximately 32% year-over-year and clinic network revenues that grew 59.5% from the same quarter last year.

Numinus also ended the quarter with a strong cash position of $41.8 million.

Putting it all together, this appears to be an integrated mental health care company that is moving up in the market.  

Here are six reasons why investors may want to perform additional due diligence on this rapidly growing company in a rapidly growing market.

A Closer Look at What Separates Numinus from the Competition

We know many people are struggling with mental health these days. From kids and young adults struggling with stress, anxiety, and depression to older adults flooding emergency rooms across North America seeking help for mental health-related issues.

The good news is psychedelic drugs have shown promise in treating these conditions. That’s why the US Food and Drug Administration recently classified psilocybin as a “breakthrough therapy,” a classification intended to get promising drugs to market faster.⁸ 

With the attention on psychedelics increasing,  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) has quickly become a recognized leader in the space with its research lab recently featured in a Bloomberg article about the incredible potential of “magic mushrooms”. ⁹

Here’s a closer look at a few of the biggest reasons why Numinus is standing out in this new market:

Reason #1 – Transformative Platform

While there are companies developing psychedelic treatments and companies are offering other alternative mental health treatment approaches, nobody is combining both of these things in such a highly complementary manner as  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF).

Numinus helps people to heal and be well through the development and delivery of innovative mental health care AND access to safe, evidence-based psychedelic-assisted therapies. The Numinus model – including psychedelic production, research and clinical care – is at the forefront of a transformation aimed at healing rather than managing symptoms for depression, anxiety, trauma, pain and substance use. 

To put it another way, Numinus is leading the integration of psychedelic-assisted therapies into mainstream clinical practice and building the foundation for a healthier society.

Reason #2 – Different from the Rest

Most psychedelic companies in this young marketplace are focused on research and thus not producing revenue.

 Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) is standing out from the crowd thanks to its network of clinics. As of July 14, 2022, following the acquisition of Novamind, Numinus grew its number of wellness clinics to 13 (one in Vancouver, one in Toronto, three in Montreal, eight in Utah, and two in Arizona).

These state-of-the-art clinics address a variety of mental health needs, including: depression, anxiety, bipolar disorder, substance use disorder, ADHD, OCD, PTSD, eating disorders, suicidal ideation, and much more.

Among the treatments offered by the clinics are:

• Traditional therapy and counseling
• Virtual psychotherapy
• Mindfulness programs
• Neurological services
• Transcranial Magnetic Stimulation (TMS)
• Ketamine-assisted therapies
• Psychedelic-assisted therapies (with MDMA or Psilocybin for SAP-approved clients
• KAP Pod Program
• Psychiatric medical model management
• Insurance coverage expertise

With the acquisition of Novamind, Numinus immediately became one of the highest revenue-producing mental health care companies providing psychedelic and ketamine-assisted therapies, with more than $12 million of combined proforma annual revenues (based on trailing four quarters). 

The company recently reported that in Q3 its clinic network revenues grew 7.5% compared to the prior quarter.

Now here’s a quick look at how  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) compares to other companies in the marketplace:

Reason #3 – Rapid Expansion 

As mentioned earlier, the acquisition of Novamind was a major development for  Numinus Wellness (TSX:NUMI) (OTCQX: NUMIF) this year.

It had an immediate impact on the company in a variety of ways. For one thing, the clinic-side of the company’s business jumped in size as the graphic below shows.

In addition, wellness clinic performance also improved dramatically. For instance: 

• There were 6,200+ appointments held across the US and Canada in August, up 25% compared to July 2022
• There were 4,900+ appointments across US clinics only in August, +22% compared to July 2022
• There was a 35% growth in Ketamine therapy appointments
• Finally, there was a 23% increase in TMS appointments

All of this growth positively impacted Numinus’s bottom line. Additional developments also had a positive effect on revenue.

For example, the company began offering ketamine-assisted therapy for patients with neurologic conditions at its Toronto clinic, the Neurology Centre of Toronto (NCT) by Numinus.

NCT focuses on conditions including epilepsy, concussion, brain injury and functional neurological disorders, offering a comprehensive range of services that include primary neurologic care and supportive therapies offered by a team of over 20 specialists. 

The new service is being led by a psychologist and follows Numinus’ existing protocol for ketamine-assisted therapy, already in use in its other locations in Canada and the US, which includes sessions for medical screening, medicine dosing and therapy for integration. 

Reason #4 – Health Canada Licensed Research

 Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) was the first public company to complete a legal harvest of psilocybe mushrooms, otherwise known as “magic mushrooms” and is among the first public companies licensed to handle a variety of different psychedelic substances including ketamine, LSD, mescaline, N,N-Dimethyltryptamine (DMT), N-Methyl-3,4, methylenedioxyamphetamine (MDMA), psilocin, and psilocybin. 

From making notable progress toward treating patients with post-traumatic stress disorder (PTSD) through a compassionate access trial for psychedelics-assisted therapy to developing new and innovative techniques to efficiently grow psilocybe containing mushrooms – Numinus has been very busy with innovative R&D.

The psychedelics-assisted therapy for PTSD, which is in collaboration with the Multidisciplinary Association for Psychedelic Studies (MAPS), is the first of its kind in Canada. 

MAPS is the leading developer of MDMA-assisted therapy training programs, treatment protocols, and research. So, when Health Canada cleared the MAPS-sponsored single-arm, open-label safety and feasibility study evaluating MDMA-assisted therapy for post-traumatic stress disorder, this was a huge boost for the pair.¹⁴

In February,  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) advanced the trial and successfully transitioned into the pre-implementation stage at its Vancouver clinic.¹⁵ 

In March, Numinus announced that its Montreal site had begun drug administration. The treatment follows MAPS’ protocol of three sessions of MDMA administration and therapy, each to be followed by three integration sessions. 

And these aren’t the only exciting R&D activities taking place at Numinus: 

• Numinus was named a licensed Psilocybin supplier by Health Canada for Canada’s Special Access Program
• Numinus received approval from Health Canada to study Ayahuasca and San Pedro (football fans might recognize Ayahuasca, which is the substance four-time NFL MVP Aaron Rodgers said he took during a recent trip to Peru and which he credited for helping him subsequently perform at an MVP level.)
• Numinus was approved for a Containment Level 2 License – “This biosecurity expansion will allow us to deeply understand not only the mechanisms behind Psilocybe mushrooms and other naturally occurring psychedelic materials but also their interaction with the human body,” said Sharan Sidhu, Science Officer and General Manager, Numinus Bioscience.

Reason #5 – Strong Revenue Generation

We mentioned the revenue generating capabilities of the company’s clinical network earlier, but it bears repeating here:

In Q3 2022, the company’s clinic network revenues grew nearly 60% from the same quarter last year and nearly 8% compared to the prior quarter. And the company’s clinical revenue generating capabilities don’t just come from the wellness clinics.

Cedar Clinical Research, the clinical trial management division of Numinus that was acquired through Novamind, has also been busy.

CCR continues to achieve positive operational growth. During Numinus’ fiscal fourth quarter, the division recruited 178 clinical trial participants for 16 third-party clinical studies, representing a 19% increase in clinical trial participation compared to the fiscal third quarter.

Currently, CCR is hosting clinical trials for depression, PTSD, cannabis use, schizophrenia, end-of-life, and traumatic brain injury. In May, CRR was chosen to host a Phase II randomized clinical study for the acute treatment of social anxiety disorder (SAD). 

The success of CCR is just another reason why  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) continues to separate itself in the marketplace and generate higher profits. 

In its Q3 earnings report, the company cited revenues that were $741,064 in Q3 2022 (a 31.8% year-over-year increase). But these figures do not even include the positive impact of the acquisition of Novamind!  The first quarter of results that include Novamind’s operations will be published at the end of November.

 Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) also reported a positive cash balance of $41.8 million as of May 31, 2022.

Financial highlights from the first nine months of 2022 (before the acquisition of Novamind):

• Revenues grew 126.5% year-over-year to $2.3 million due primarily to the continued post-acquisition growth of Novamind and the acquisition of NCT.
• Gross margin during the first nine months of 2022 was 19.9%, compared to -11.1% in the same period last year.
• Gross profit during the first nine months of 2022 was $460,569, a significant improvement compared to the gross loss of $113,356 in the same period of 2021.
  

On a pro-forma basis, including the performance from both Numinus and Novamind (prior to the acquisition), the combined company would have generated nearly $12 million of revenue in the trailing four quarters, and would have achieved 14.8% compounded quarterly revenue growth in that same period.  

Reason #6 – A Knowledgeable Leadership Team 

The  Numinus Wellness (TSX:NUMI) (OTCQX:NUMIF) team consists of a terrific blend of acclaimed scientists, mental health experts, and successful entrepreneurs. Team members include:

Payton NyquvestCo-founder & Chief Executive Officer Executive

15+ years in Canada/US capital markets. Raised $100M+ for public and private companies across North America. Former VP and Head of Sales of one of Canada’s largest independent brokerages.

Dr. Evan WoodMD, PhD Chief Medical Officer

Research leader on addiction medicine and driver of major health policy reform. Contributed to international guidelines on treatment of HIV in substance users; establishment of Canada’s first supervised injecting site and standards of care; legalization of adult hemp use; and national clinical therapeutic guidelines for multiple substance use disorders. Former Tier 1 Canada Research Chair, UBC Professor of Medicine, founding Executive Director of BC Centre on Substance Use. Published 500+ scientific articles.

Michael TanPresident & Chief Operating Officer

20+ years’ operations leadership driving business transformation for global companies, including Indigo, Hudson’s Bay, UPS, and Saks Fifth Avenue. Launched province-wide recreational MJ operations in BC as founding executive Director of the BC Liquor Distribution Branch-MJ Division.

John FongCPA Chief Financial Officer

15+ years building global financial operations for private and public companies (TSX-V, NYSE, London AIM, Lima SE), with experience across mining & resources and technology. Led a precious metals company from exploration to commercial production in 3 years, with net income of $100M and operating cash flow of $98M.