Investment Memo:
Emyria
(ASX:EMD)
-
LIVE
Opened: 18-Jun-2025
Shares Held at Open: 15,888,332
Options Held at Open: 5,822,221
What does EMD do?
Emyria (ASX: EMD) is an integrated clinical drug development and care delivery company.
The primary area of focus is on psychedelic assisted therapies on PTSD using MDMA.
What is the macro theme?
We think psychedelic assisted therapy and psychedelic clinical trials have the potential to reshape care and treatments for difficult to treat neuropsychiatric disorders such as complex trauma, depression, anxiety, chronic pain and Parkinson’s disease.
As more patients become aware of their options, and the regulatory environment eases, we think companies that can deliver these types of treatments, services and clinical trials will attract capital.
Our Big Bet for EMD
EMD re-rates to a +$300M market cap by making a breakthrough with one or more of its clinical trial programs (MDMA, psilocybin, ketamine, CBD) while rapidly growing the footprint of its mental health treatment clinics.
NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our EMD Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.
Why did we invest in EMD?
EMD now has a commercialisation deal with Australia’s largest private health insurance company Medibank
EMD signed a 2-year deal with Medibank, Australia’s largest private health insurance company.
This deal means that Medibank will fund the full costs of any eligible members who utilise EMD’s PTSD care programs.
The deal will see EMD cover around $30,000 per patient, per year, and underpins EMD’s ambition to scale up its mental health platform nationally.
EMD has Authorised Prescriber Status (approvals) from the TGA to deliver MDMA-assisted therapies
Authorised Prescriber status is what is needed for any organisation or individual to administer psychedelic assisted therapy.
It is not easy to get and requires multiple submissions to the TGA, ethics approval, a tried and tested protocol for therapy delivery and strict guidelines on how the treatment can be administered.
This status provides a significant regulatory advantage to EMD compared to anyone else trying to enter the space.
Australia is leading the charge globally in new age treatments for mental health
In 2023 Australia’s drug regulator, the TGA, announced the legalisation of various controlled substances for medical use in therapy.
This was a world first.
This provides the perfect regulatory environment for a company like EMD to develop and validate its business model.
EMD has published clinical data that shows its treatment works
In 2023 EMD launched a clinical trial for MDMA-assisted therapy.
From that study EMD was able to show that its treatment reduces PTSD symptoms by more than 50%.
And patients continued to improve six months after the assisted therapy was complete.
EMD has the means to deliver its care through its physical clinics
As part of EMD’s integrated care model, EMD needs to provide access to physical sites for its physicians to undertake EMD’s approved therapy.
Right now EMD owns and operates the Empax Centre in Perth.
But EMD has also been able to open up satellite centres within hospitals expanding its capacity into the Perth Clinic.
EMD is in discussion to launch these satellite sites on the East Coast, which will provide the means for EMD to expand nationally.
While EMD will set up some core sites that it owns, it can also lease these sites from different hospitals.
EMD’s Chairman Greg Hutchinson has scaled up clinics before with ~$13B-capped Sonic Healthcare
EMD’s Chairman Greg Hutchinson led the scale up of Sonic HealthPlus to over 7,000 active clients across 40 different clinic locations.
Sonic HealthPlus is now the largest provider of occupational and community medical services in Australia…
If there is anyone that is able to deliver the “scale up” business model for EMD, it's the Chairman, Greg Hutchinson.
(At EMD’s 3.5 cent placement in November last year Greg put in $1M, at the most recent placement at 2.5 cents, Greg put in $197k).
EMD has the opportunity to move into the US
As EMD is able to scale up its business and secure more payer agreements, we think this will create a significant moat around the business.
We think that if it is able to validate its business here in Australia, it could potentially take that business model and replicate it in the US.
~24M people suffer from PTSD in the US.
The cost of PTSD-related anxiety disorders is more than US$42.3 billion annually in the US.
And the FDA commissioner recently said on News Nation that research on psychedelic treatment is a “Top Priority” for the organisation.
This actually provides an advantage for EMD, as it is able to accelerate its business here in Australia, while potential competitors in the US are in limbo waiting on the regulatory environment to change.
By that time we hope that EMD is seen as a powerhouse in the industry and can transfer all of its learnings overseas.
EMD has the ability to expand into different mental health conditions, and different drugs
While EMD is currently focused on MDMA assisted therapy for PTSD the company also has the opportunity to target different drugs (like psilocybin and ketamine).
AND eventually start treating different disorders like treatment resistant depression, parkinson's disease and Bipolar disorder.
As more therapies are developed in the pipeline, EMD will be able to offer patients are broader range of care and target different markets.
What do we expect EMD to deliver?
Objective #1: Scale up services to more sites
We want to see EMD partner with more hospitals and care centres to deliver its care offering.
Milestones
New site opened
New site opened
New site opened
Objective #2: Secure more payer agreements
Now that the company has secured a 2-year deal with Medibank, Australia’s largest private health insurance company, we want to see EMD secure more payer agreements.
Milestones
Payer Agreement 1 - Medibank
Payer Agreement 2
Payer Agreement 3
Objective #3: Secure more MDMA
One of the big bottlenecks for EMD to deliver its care is the supply of medical grade MDMA. We want to see the company identify both short term and long term supply opportunities.
Milestones
Supply Agreement 1
Supply Agreement 2
Develop own MDMA-analogues for use in its own clinics
Objective #4: Expand care offering to new indications and/or new drug therapies
We want to see EMD expand its assisted therapy programs to psilocybin and ketamine, also for different mental health conditions like anxiety, treatment resistant depression etc…
Milestones
Commence clinical trial on ONE new indication or drug.
Regulatory Risk
EMD is working in a heavily regulated space.
The regulatory changes that allow EMD to operate in the field of psychedelic therapies are new and could be reversed. A regulator could step in and intervene either across the industry or specifically in relation to EMD.
Scale Up Risks
Even though EMD can secure funding for Medibank, there is a lot that needs to go right in terms of scale.
This includes securing more sites to operate its services as well as securing more MDMA supply to meet the expected demand.
Scaling costs money, and EMD needs to reach a level of profitability before it can scale without continuing to tap the market for resources.
Funding risk
Small caps often need to raise cash to fund their growth.
Whilst EMD is generating revenue now, it is still making a loss (it spends more cash than it brings in).
If EMD is unable to develop a self-sustaining business model with positive operating cash flow, this could force EMD to raise capital in the future, likely at a discount to market prices to secure funds.
Market risk
There is always the possibility that broader market sentiment gets worse and shares as a whole trade lower, taking EMD’s share price with it. Alternatively, there could be further sector specific pain ahead. For example, the biotech sector sells down.
What is our investment plan?
We have not sold a single share in EMD since we initiated coverage in 2023.
Our Investment Plan for EMD is to hold on to a majority of our position to see the company execute on its business strategy over the next two to three years.
If the company’s share price materially re-rates in the medium term due to the scale up efforts we may look to sell up to ~20% of our holding. See our general hold policy for more details.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 15,888,332 EMD Shares and 5,822,221 EMD Options and Company’s staff own 561,667 and 138,889 Options at the time of publishing this Investment Memo. The Company has been engaged by EMD to share our commentary on the progress of our Investment in EMD over time. (6,250,000 shares and 2,083,333 options are subject to shareholder approval)
Investment Memo:
Emyria
(ASX:EMD)
-
LIVE
Opened: 04-Sep-2023
Shares Held at Open: 5,666,667
What does EMD do?
Emyria (ASX: EMD) is an integrated clinical drug development and care delivery company.
EMD’s primary area of focus is on psychedelic assisted therapies using MDMA, ketamine and psilocybin to treat difficult mental health problems in innovative ways. It also has cannabidiol (CBD) treatments in its clinical pipeline for anxiety and complex pain.
What is the macro theme?
We think psychedelic assisted therapy and psychedelic clinical trials have the potential to reshape care and treatments for difficult to treat neuropsychiatric disorders such as complex trauma, depression, anxiety, chronic pain and Parkinson’s disease.
As more patients become aware of their options, and the regulatory environment eases, we think companies that can deliver these types of treatments, services and clinical trials will attract capital.
Our Big Bet for EMD
EMD re-rates to a +$300M market cap by making a breakthrough with one or more of its clinical trial programs (MDMA, psilocybin, ketamine, CBD) while rapidly growing the footprint of its mental health treatment clinics.
NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our EMD Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.
Why did we invest in EMD?
Australia leading the charge globally in new age treatments for mental health
Following the Therapeutic Goods Administration’s decision, which came into force in July 2023, Australia now has the regulatory environment needed for a company like EMD to work.
This decision put EMD and Australia potentially years ahead of other jurisdictions like the US.
EMD at the forefront of psychedelic assisted treatment
EMD has the infrastructure needed to provide psychedelic treatments.
EMD owns actual brick and mortar clinics where patients are treated.
These clinics are where practitioners like psychiatrists work - currently under TGA rules, these treatments can only be prescribed by specifically authorised psychiatrists.
EMD is creating novel MDMA products
EMD has partnered with UWA to develop a number of different novel MDMA treatments to harness the therapeutic aspects of the drug - in particular with Parkinson’s disease.
Drug development can be very lucrative, if EMD proves that it is safe and effective in a clinical setting.
EMD’s unparalleled access to patient data and AI partnership
Through its clinics EMD has access to opt-in patient data and uses state of the art data insights generated by a technology platform called Palantir Foundry. This data is used to inform better care practices and drug development opportunities.
Clinics delivering revenue
EMD provides mental health care services to patients, which generates revenue for the company and subsidises its R&D. The company made $1.6M last FY, targeting $5.7M this FY.
CBD “Side bets” provides a catalyst
EMD is currently in a Phase 3 clinical trial for an over-the-counter CBD treatment for anxiety.
The company has a commercial partner lined up to oversee marketing, distribution and sales. Any positive outcome here will drive immediate value back to EMD shareholders.
EMD management ‘dream team’
We think EMD’s Board and Management are highly qualified, well respected and provide the necessary governance structure to support a far larger organisation.
EMD’s market cap provides an attractive entry point
At our Initial Entry Price of 7.5 cents, EMD has a market cap of ~$25M. Other operators in the space are capped at many multiples of EMD, indicating plenty of room for growth.
What do we expect EMD to deliver?
Objective #1: Gather important data from MDMA mental health trial
We want to see EMD deliver its MDMA assisted therapy. EMD has already recruited its first patient and secured key approvals from the Office of Drug Control and Therapeutic Goods Administration.
Milestones
Begin treatment on first patient (MDMA)
Complete patient recruitment for Phase 2b trial (MDMA)
Complete Phase 2b trial for MDMA
Objective #2: Develop novel MDMA treatments
We expect EMD to continue its clinical trial work and drug development, which includes preclinical tests on MDMA analogues (animal studies) for faster acting MDMA and MDMA “without the high” for Parkinson’s disease.
Milestones
Animal study results for fast acting MDMA analogue
Animal study results for Parkinson’s MDMA analogue
Identify lead drug candidates for Phase 1 trial
Objective #3: Expand mental health treatments to psilocybin and ketamine therapies
We want to see EMD expand its assisted therapy programs to psilocybin and ketamine.
Milestones
Secure key approvals for psilocybin use
Secure psilocybin supply
Begin treatment on first patient (psilocybin)
Develop ketamine assisted therapy protocol
Begin treatment on first patient (ketamine)
Objective #4: CBD “Side bet” clinical trials
Whilst we didn't necessarily Invest for its CBD clinical trials, a successful outcome will deliver immediate value to shareholders.
EMD is currently in a Phase 3 trial for its CBD over the counter treatment for stress and anxiety.
It has a commercialisation agreement in place with Aspen Australia if the trial is successful and the drug is registered with the TGA.
EMD is also developing a highly potent CBD treatment for complex pain & anxiety to take to Phase 1 trials.
Milestones
Results for the Phase 3 trial for low-dose CBD for stress and anxiety
Register CBD treatment with the TGA for over the counter use
Begin: Phase 1 trial of high-potency CBD treatment
Results: Phase 1 trial of high-potency CBD treatment
Objective #5: Scale clinical health services & engage payers
We want to see EMD open new clinics and/or licence its treatments and care models to create scale. To do this we expect EMD to get a major payer in healthcare or an industry body to help fund treatments.
Milestones
Open a new clinic
Licence a care model
Secure a major payer
Objective #6: Expand Intellectual Property and build partnerships
EMD needs to secure further patent protection for its treatments (such as MDMA analogues), continue to work with major healthcare bodies to support registration of its treatments and find commercialisation partners.
Milestones
Patent application
Patent grant
Commercialisation partner secured
Adverse patient outcome risk
Given the psychedelic therapies that EMD will administer are still being fully understood, there could be a greater risk of adverse patient outcomes.
Were adverse patient outcomes to occur, aside from the direct negative impact to patients, it is possible the media and social sentiment could turn on the industry and EMD.
Alternatively, this could happen even if EMD does everything properly, i.e another less scrupulous business or operator attracts negative publicity.
Regulatory risk
The regulatory changes that allow EMD to operate in the field of psychedelic therapies are new and could be reversed. A regulator could step in and intervene either across the industry or specifically in relation to EMD. A change of government could also bring about a regulatory reversal.
Competition risk
EMD will need to move quickly to establish its presence in the market. If progress is slow, another care provider or alternative treatments could emerge hurting EMD’s prospects.
Clinical trial risk
There is a chance that one or more of EMD’s clinical trials fail to meet their primary or secondary endpoints, meaning the treatments fail to satisfy the criteria of the studies. Any clinical trial results, if negative, could hurt the EMD share price.
Funding risk
Small caps often need to raise cash to fund their growth. Whilst EMD is generating revenue now, it is still making a loss - i.e. it spends more cash than it brings in. If EMD is unable to develop a self-sustaining business model with positive operating cash flow, this could force EMD to raise capital in the future, likely at a discount to market prices to secure funds.
Market risk
There is always the possibility that broader market sentiment gets worse and shares as a whole trade lower, taking EMD’s share price with it. Alternatively, there could be further sector specific pain ahead. For example, the biotech sector sells down.
What is our investment plan?
Our Investment Plan for EMD is to hold on to a majority of our position to see the company execute on its business strategy over the next two to three years.
If the company’s share price materially re-rates in the medium term due to the results of the CBD Phase 3 trial, a breakthrough in the MDMA technology, a macro triggering event or any other unknown reason, we may look to sell up to ~20% of our holding. See our general hold policy for more details.
We also intend to fully participate in the EMD rights issue.
Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 5,666,667 EMD shares and 2,833,334 EMD options at the time of publishing this memo. The Company has been engaged by EMD to share our commentary on the progress of our Investment in EMD over time.