EMD Selected for New PTSD Treatment Study

Published 21-JUN-2024 10:12 A.M.

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Yesterday, our psychedelic assisted therapy Investment Emyria (ASX: EMD) announced that its Empax Centre has been selected as a Key Trial Site for Transcend Therapeutics' New PTSD Treatment Study.

This an important win for EMD for us as Investors, in part because EMD will receive compensation for helping Transcend Therapeutics run its trial.

We note that yesterday's announcement referred to the fact that “Emyria bills its specialised professional services at competitive market rates of between $150 to $600 per hour, with each trial participant requiring an estimated 30 to 50 hours of service throughout the duration of the study.”

Another key aspect to consider is that this is validation of the value of EMD’s Empax Centre and also highlights EMD's advanced research capabilities, state-of-the-art infrastructure, and expertise in psychological trauma care and clinical trial delivery.

The Empax centre opened in April and will help deliver EMD’s wrap-around psychedelic assisted therapy offering.

What’s more - the trial announced yesterday will be testing an MDMA analogue called methylone.

EMD already has a MDMA analogue program of its own - so data from this Phase 2 trial could tell us more about the overall safety and efficacy of MDMA analogues for treating neuropsychiatric disorders such as PTSD.

How does this Impact our Investment Thesis for EMD?

EMD's involvement in this trial could lead to further collaborations or opportunities in the mental health space, strengthening its position as a leader in this field.

Although we don’t know the precise amount, the compensation they will receive will also contribute to EMD's financial performance and support its ongoing operations and research efforts.

This is a good example of one of the key reasons we Invested in EMD which is:

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.

In terms of how it advances the objectives laid out in our EMD Investment Memo, we see this as advancing Objective #2:

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.

That is, the trial can help EMD with its own MDMA analogue treatments by providing important information about MDMA analogue effects.

With regards to risks which we list in our EMD Investment Memo we see this has reducing the following risk:

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.

Any compensation that EMD receives from this trial will increase its revenue and help it develop a more self-sustaining business model, without the need for further capital raises.

Click here to read the EMD Investment Memo in Full