Numinus Wellness Inc. Announces Second Quarter Fiscal 2024 Results

Q2 Fiscal 2024 Highlights

• Cash position of $6.6 million as of February 29, 2024
• Gross profit of $0.5 million, a 22.7% decline over Q1 2024
• Revenue of $5.0 million, a 15.4% decline over Q1 2024
• Enrolment in Numinus training programs doubled to over 1,400 learners, compared to over 700 in Q1 2024
• Managed 15 clinical trials at Cedar Clinical Research
• Provided 17,661 client appointments in Numinus Wellness Clinics

Subsequent to Quarter End

• On March 20, 2024, the Company announced that it had submitted a Clinical Trial Application to Health Canada to examine the feasibility of a group model in MDMA-assisted psychotherapy, enrolling trainee practitioners as participants

VANCOUVER, BC, April 12, 2024 /PRNewswire/ – Numinus Wellness Inc. (“Numinus” or the “Company“) NUMI NUMIF, a mental health care company advancing traditional and innovative behavioral health treatments with a focus on safe, evidence-based psychedelic-assisted therapies, today announced its financial results for the three months ended February 29, 2024 (“Q2 2024“).

“Over the past two quarters, Numinus has steadfastly focused on fortifying our operations to ensure we are well-positioned for sustainable growth and profitability in the quarters to come,” said Payton Nyquvest, Numinus Founder and CEO. “This included reducing headcount across the organization, concentrating on higher margin procedures at our clinics and eliminating our unproductive location in Arizona. While these initiatives have generated one-time impacts in the quarter, they are also enabling us to optimize our patient experience and care model, improve efficiencies, and establish best practices.”

“We are also pleased with the success of our Numinus training program. As well as a doubling of the learners enrolled in the program, our Introduction to Psychedelics course is proving to be a pathway to our paid courses, and we recently introduced training for practitioners working with drug developers to facilitate clinical trial research.” added Mr. Nyquvest.

Revenue

Revenues declined 15.4% from the prior quarter to $5.0 million in Q2 2024 due to the Company’s further optimization of operations to focus on profitability and seasonality effects.

Gross Margin

Sequentially, gross margin declined 310 basis points in Q2 2024 to 33.0% from 36.1% in Q1 2024, reflecting the decrease in revenue compared to the previous quarter.  

Operating expenditures

Operating expenditures were $6.4 million in Q2 2024, compared to $6.3 million the previous quarter, a 1.5% increase after excluding a one-time non-cash charge of $0.3M during Q2 2024 relating to the recognition of deferred financing costs from the ATM program. Included in operating expenditures in Q2 2024 were $0.5 million in non-recurring consulting fees related to our cost containment measures.  Operating expenses decreased 27.0% during Q2 2024 compared to $9.2 million during Q2 2023. In the quarter, the Company continued its cost containment initiatives to refocus support on revenue-producing activities and profitability.

Operational Highlights

Numinus Wellness Clinic Network

Wellness clinics generated revenue of $4.3 million during Q2 2024, a 9.5% decrease compared to $4.7 million during Q2 2023. The decline in clinic network revenues during Q2 2024 is due to the winding down of operations at the Company’s Phoenix, Arizona, location and the contraction of the number of appointments scheduled during the same comparative periods from cost containment procedures while focusing on appointment profitability across wellness clinics.

• 17,661 clinical appointments in Q2 2024, compared to 19,961 in Q1 2024
• Average of 299.3 appointments per operating day in Q2 2024, compared to 316.8 in Q1 2024
• 5.8% of appointments during Q2 2024 were made by new clients
• 18.3% of appointments during Q2 2024 were KAT or Ketamine/Spravato medicine-related
• 6.4% of appointments during Q2 2024 were for TMS services

Numinus Clinical Research

Revenues from CCR during Q2 2024 were $0.7 million, a decrease of 27.1% from $1.0 million during Q1 2024 and a 21.0% increase compared to Q2 2023. The sequential quarter decrease is due to a reduction in high-value clinical trials being completed and the winding down of its research center in Phoenix, AZ. CCR is currently conducting two psychedelic drug candidate clinical trials, with four further expected to commence in Q3 2024, as well as other non-psychedelic studies. Since Q3 2023, CCR has facilitated 26 clinical trials.

Numinus Clinical Training

The Company has built a fulsome certification program to train practitioners in ketamine, 3,4-Methyl enedioxy methamphetamine (“MDMA”), and psilocybin-assisted therapy (“Numinus Training Program”) that leverages its expertise in clinic-based treatment and clinical research. The program is accredited by major regulatory bodies in Canada and the U.S. and provided in a blended learning format to optimize adult learning.

• As of March 2024, over 1,400 learners have enrolled in Numinus Training Programs
• Since the introduction of its free Introduction to Psychedelics training course, over 30 learners have gone on to take more advanced training with Numinus
• Numinus Training has diversified its offering to support leading research institutions to train research providers in evidence-based practices for supporting clients in psychedelic clinical trials
• Numinus Training has been working diligently on the Oregon Health Authority audit to meet the legislative and competency requirements for psychedelic facilitators in that state

Corporate Updates

On February 14, 2024, Rick Doblin, PhD, the Founder and President of the Multidisciplinary Association for Psychedelic Studies (“MAPS”), was appointed as an unpaid, non-exclusive strategic adviser of Numinus

On March 12, 2024, the Company announced Edwin Garner’s retirement from its Board of Directors and the appointment of Donna Wilson and Donna Wong as directors. Both directors bring decades of experience in corporate strategy, corporate finance, corporate governance, and people management.

On March 12, 2024, the Company announced the appointment of Melony Valleau as its interim CFO, effective March 28, 2024, upon the resignation of Nikhil Handa. Ms. Valleau brings U.S. corporate finance and capital markets experience to Numinus, which aligns with the Company’s plans to increase its presence with U.S.-based patients and investors.

On April 11, 2024, the Company announced that Dr. Reid Robison, the Company’s Chief Clinical Officer, will leave his position to focus on his role as lead principal investigator at Numinus and return to private practice. Dr. Paul Thielking, Numinus’ Chief Science Officer overseeing the company’s research activities, has also assumed the leadership of the Company’s clinical function as Chief Medical Officer.

The Company’s annual general meeting will be held on May 31, 2024.

Balance Sheet and Liquidity

Numinus ended the quarter with a total cash balance of $6.6 million and working capital of $6.4 million.

Numinus’ unaudited condensed consolidated interim financial statements for the three months ended February 29, 2024, and related management’s discussion and analysis are available on Numinus’ Investor Relations website at www.investors.numinus.com and under the Company’s profile on SEDAR+ at www.sedarplus.ca. These documents were prepared in accordance with IFRS.

Outlook

As an integrated mental healthcare provider, Numinus is building the critical infrastructure of clinical research support, practitioner training, and patient therapy to serve the expected demand for psychedelic-assisted therapy (“PAT”). To take advantage of what it sees as a significant growth opportunity, the Company has focused on optimizing its operations and controlling costs since the third quarter of fiscal 2023.

The Company expects significant growth from the sector as acceptance of PAT as an effective treatment for serious mental health conditions increases and psychedelic drug candidates advance through the drug approval process. According to the newsletter Psychedelic Alpha¹, there are currently over 90 potential psychedelic drugs in the preclinical to phase 3 clinical trial stages of drug development. This includes the FDA’s acceptance of MDMA as a new drug application with a Prescription Drug User Fee Act (“PDUFA”) target action date of August 11, 2024.

It is the Company’s view that these trends indicate the beginning of a period when psychedelic treatments for serious mental health conditions may become increasingly available to the public and provide opportunities for continued growth across the three areas of its sector focus.

1. As a leading provider of clinical research support, Numinus’ Cedar Clinical Research (CCR) anticipates that it will continue working directly with drug developers to provide research sites for drug candidates in phase 2 and 3 trial stages. In the last 12 months, CCR has facilitated 26 clinical trials and has established relationships with both psychedelic and non-psychedelic drug developers, which positions it to secure further contracts.
2. A component of many psychedelic drug treatments is therapy to guide patients through their transformation. Numinus hopes to leverage its clinic footprint, treatment expertise in multiple psychedelics and first-mover advantage in PAT to become the provider of choice.
3. To meet the demand for trained practitioners to administer therapies for approved treatments, Numinus has established a comprehensive program. Accreditation is available through major regulatory bodies in Canada and the U.S. after completing the course, which has proven to attract learners and serve as validation for their future clients. The program has demonstrated scalability, doubling enrollment over the past six months. The Company is also in the early stages of launching therapist training programs for drug developers to facilitate clinical research trials.

To prepare the Company for the growth expected from the psychedelic sector, Numinus launched two critical initiatives: cost containment and strategic realignment. 

• A focus on profitable operations in the U.S.: With psychedelic therapy treatment expected to be approved in the U.S. before other jurisdictions, the Company chose to discontinue its unprofitable clinic in Phoenix, Arizona. With the consolidation of operations at its successful Utah clinics, Numinus is optimizing its patient experience and care model, improving efficiencies, and establishing best practices to be deployed in future expansion.
• Reducing headcount: Since Q2 2023, Numinus has reduced its headcount by 60% by eliminating non-revenue roles and aligned all remaining employees on growth-oriented initiatives and activities. The resulting leaner and more efficient organization will drive profitable growth.

With the initiatives in place and positive trends in the psychedelic sector, the Company believes it is well-positioned for growth in the quarters to come.

Strategic Review

To best position the Company for continued growth, Numinus’ Board of Directors (the “Board”) initiated a review process to explore, review and evaluate a broad range of strategic alternatives that may be available to the Company to unlock shareholder value. The Board retained Stifel Canada as its financial and strategic advisor.

Conference Call and Webcast Details

Interested parties are invited to participate in the Company’s Q2 2024 results conference call and webcast occurring on April 15 at 5:30 p.m. Eastern time / 2:30 p.m. Pacific time. During the call, Numinus executives will review the Company’s performance and recent initiatives and answer questions from analysts and previously provided investor questions.

To listen to the live webcast, please register at:

https://events.q4inc.com/attendee/472052579 

The webcast will also be archived on the Events and Presentations page of Numinus’ Investor Relations website: www.investors.numinus.com/events-and-presentations. 

To participate in the live conference call, please use the following dial-in information:

• 1 (888) 330-3632 (Toll-free North America)
• 1 (646) 960-0837 (International)
• Please ask to participate in Numinus’ Q2 2024 Results Call.

To avoid any delays in joining the call, please dial in at least five minutes prior to the call start time. If prompted, please provide the conference passcode 3547386.

About Numinus

Numinus Wellness Inc. NUMI NUMIF 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 research and clinic care – is at the forefront of a transformation aimed at healing rather than managing symptoms for depression, anxiety, trauma, pain and substance use. At Numinus, we are leading the integration of psychedelic-assisted therapies into mainstream clinical practice and building the foundation for a healthier society.

Learn more at www.numinus.com and follow us on LinkedIn, Facebook, Twitter, and Instagram.

Forward-looking statements

This press release contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, ability of Numinus to maintain or increase earnings; ability of Numinus to achieve or maintain profitability; results of changes to operations from a financial or business perspective; the effect of cost containment measures on Numinus business and financial position; changes to cash burn rate, expenses, corporate programs or priorities, or unanticipated costs affecting cash runway or the pathway to positive cashflow or profitability, the effect of any transaction or other activity undertaken by the company in connection with the strategic review; interest in, uptake of and the ability to commercialize the Numinus Training; receipt of and/or continued approval of the clinical trial application by Health Canada for experiential opportunities for practitioners training to offer MDMA-assisted therapy;  availability of subjects and trainers for experiential opportunities in practitioners training, if approved; dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, if any, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers; the effect, if any, that the Consolidation may have on the liquidity and price of the Company’s common shares and its ability to maintain its listing on the TSX and OTCQB; and other risk factors set forth in our annual information form dated November 29, 2023 and available on SEDAR+ at www.sedarplus.ca. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws.

SOURCE Numinus Wellness Inc.