EMD completes raise, Chairman invests $1M
Today, our psychedelic assisted therapy Investment Emyria (ASX: EMD) announced that it has completed a $2.25M capital raise.
The big headline here was that EMD’s Chairman, Greg Hutchinson tipped in $1M of his own money into EMD in this raise.
We always like it when Board members invest in their own companies - and we see Hutchinson’s commitment as an excellent signal of the potential he sees in EMD.
This is Mr. Greg Hutchinson:
Hutchinson is well-known for his significant success as CEO of Sonic HealthPlus over the past 14 years.
Sonic HealthPlus is part of Sonic Healthcare (ASX: SHL) and the company re-rated from a share price of ~$12 20 years ago to a peak share price of $47 at the end of 2021 - its currently a $13BN company.
Sonic HealthPlus is Australia’s leading provider of occupational healthcare and general medical services so Hutchinson is well versed in scaling medical clinics.
This is something EMD is also aiming to do with its novel approach to dealing with hard to treat mental health problems, such as PTSD and treatment resistant depression.
Read more about EMD’s progress in our most recent EMD note:
Data shows EMD’s PTSD program is working, Australia leading the US
How does this impact our EMD Investment Memo?
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.
Source: 4 September 2023 EMD Investment Memo
We see this raise as reducing funding risk for EMD in the short to medium term.
What’s next for EMD?
MDMA-AT Phase 2b patient recruitment updates 🔄
We want to see EMD recruit all 72 patients into the trial so that we will have a timeframe on results.
Animal study results for fast-acting MDMA analogue 🔄
EMD is developing its own analogues (modified versions of the drug that work better). These tests are currently being run on animals and we want to see if EMD publishes positive results here.
Approval for ketamine assisted therapy protocol 🔄
EMD has a pending application for a ketamine assisted therapy trial.
Secure a major payer partnership (we see this as a major catalyst) 🔲
If EMD is able to secure a payer for its treatments, we think this would be a major catalyst for the company.
