Release Date: July 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Numinus Wellness Inc (NUMIF, Financial) successfully reduced its burn rate to under $1 million per month, achieving a significant milestone in cost management.
- The company has optimized its operations by transitioning out of Canadian clinic operations, leading to an asset-light model and potential future development opportunities.
- Numinus Wellness Inc (NUMIF) has built strategic relationships with leading psychedelic drug developers and has been at the forefront of important clinical trials.
- The proposed acquisition of MedBright AI is expected to enhance clinic efficiency and provide a scalable AI solution for psychedelic-assisted therapy.
- Revenue from Cedar Clinical Research increased by 10.7% due to the launch of a clinical trial with additional patient appointments, indicating growth in this segment.
Negative Points
- Revenue for the quarter was $4.3 million, a decline from $4.4 million in Q2 2024 and $5.2 million in the same quarter last year, reflecting a downward trend.
- Gross margins decreased to 22% from 24% in Q2 and 34.5% in Q3 2023, indicating a decline in profitability.
- The company experienced a 6% decrease in appointments in its US clinics over Q2, despite an increase in new client appointments.
- Operating expenditures, although reduced, were still significant at $4.9 million for the quarter.
- The net loss from continuing operations was $5.1 million, indicating ongoing financial challenges despite cost-cutting measures.
Q & A Highlights
Q: With the FDA Advisory Committee voting against MDMA-assisted therapy, what is your outlook for it being approved this August by the FDA?
A: Given the strong clinical results for MDMA-assisted therapy and the significant need for care, while we were disappointed by the decision by the advisory committee, we note that the FDA is not bound by the committee's recommendation and in about one-third of the cases has approved treatments that the committee has recommended against. If the FDA does not approve in August, I'm confident that the committee's specific concerns can be addressed, and the treatment can be approved. - Payton Nyquvest, CEO
Q: What is the actual size of the opportunity with Numinus Intelligence?
A: We consider the addressable market for AI-enhanced psychedelic therapy clinic management to be significant. An estimated 14 million people have conditions appropriate for psychedelic-assisted therapy, and about 200,000 mental health providers can provide care. Offering a solution enabling providers to serve this population with reimbursed care without the investment in infrastructure or time to gain expertise will be very attractive. - Payton Nyquvest, CEO
Q: The proposed platform from the MedBright acquisition, is this completely new and would it need to be developed?
A: A lot of what they've built is very complementary to what we've been creating on the Numinus Network side. They've done significant work building out that platform with a couple of their products, particularly their main product, which they've launched into several clinics already. So there's a platform we can start to utilize immediately and incorporate into the Numinus clinics. - Payton Nyquvest, CEO
Q: Do you have any additional color on your expectations on timing for the MedBright acquisition to close?
A: We're working through the process right now, needing to complete the definitive agreement. Typically, there's about a 60-day period after signing the definitive agreement to the shareholder vote on Numinus' side. We should see this happen fairly quickly, with a proposed timeline of end of August or early September. - Payton Nyquvest, CEO
Q: In terms of clinic revenues, you're down by about 18%, but you had 6% growth sequentially on clinic appointments. Could you help quantify what drove that disconnect?
A: The closure of the Arizona clinic and transitioning some services to higher-margin services contributed to the revenue decline despite the increase in appointments. - Payton Nyquvest, CEO and Melony Valleau, Interim CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
