Clinic Appointments Give Numinus Rosy Outlook on Expansion

The company saw an 11% rise in client appointments during the quarter, signaling headway.

Even though Numinus Wellness Inc. (OTCQX: NUMIF) is regarded as one of the more resilient players in the psychedelic space, its stock has fallen nearly nine-fold since its high in 2021, proving just how fragile optimism for the nascent sector has become.

Still, management plans to optimize existing operations, target looming approval of MDMA-assisted therapy (possibly in 2024), and quell cash burn concerns, as recent regulatory news might have investors licking their lips once again.

On a recent company earnings call, CEO Payton Nyquvest detailed the initiatives meant to position Numinus for post-therapy approval. Central to the company’s strategy is the Numinus Network licensing model, which allows mental health practitioners to leverage the brand, protocols, and back office infrastructure.

Nyquvest said that the partnership model offers a more economical avenue for clinic expansion and “leverages the investments we’ve already made in our IT systems, marketing strategies, and insurance payer processes.”

For example, Numinus Network’s inaugural partner clinic opened its doors in Toronto, with an expected wave of additional clinics in the upcoming weeks and months.

Numinus is also partnering with Healing Commercial Real Estate to help identify potential clinic sites in areas exhibiting a rising demand for the company’s services. Management believes the collaboration complements their recent venture with the Multidisciplinary Association for Psychedelic Studies (MAPS), which looks to offer experiential training for practitioners administering MDMA-assisted therapy.

Through that collaboration, Numinus expects to expand its practitioner training programs, creating a wider pathway for mental health providers to gain certification in psychedelic-assisted therapies.

To maintain fiscal discipline, the company renegotiated and terminated several vendor contracts and reduced its workforce by around 8% during the quarter. The moves translated to savings worth approximately $4.2 million annually, extending the company’s financial runway.

“It is expected MDMA-assisted therapy will receive FDA approval in early to mid-2024, presenting a large growth opportunity that should greatly accelerate Numinus’ path to profitability and positive cash flow through higher margin services,” Nyquvest said.

The company’s recent third-quarter financial report showed a revenue rise of 12.6%, primarily attributed to an uptick in client appointments and more robust performance from Numinus’ clinical research business, Cedar Clinical Research.

More than 21,520 client appointments were made during the period, marking an 11.2% rise from the previous quarter, which bears out to an average of 331 appointments each operating day. New clients constituted 8.8% of the total appointments, a ratio that remains consistent with previous quarters.

“Because of the work that we’ve done to be able to provide training pathways for people, we definitely see (the MAPS collaboration) as a significant revenue-generating opportunity,” he told investors. “We know that there’s going to need to be thousands, if not tens of thousands of practitioners trained in the next couple of years to be able to meet the demand.”

CFO Nikhil Handa noted that the company does have “certain locations that have room for optimization. These are clinics that are currently under improvement plans. We’re looking at not just the mix of service, but also just how to ensure further utilization and sharing our best practices.”

Speaking on the recent troubles in the ketamine clinic space, Nyquvest believes there is still continued growth opportunities.

“I think what has happened is definitely a showing of which models are working and which models are not working,” he said. “We strongly believe that ours is working extremely well.”

“I think as we’ve kind of gone through a bit of a consolidation phase within the ketamine service providers, now that best practices have been kind of floated to the top, you’re going to continue to see demand there. And with that, strong client outcomes as well.”

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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