Braxia Scientific Corp. (CSE: BRAX) (OTC: BRAXF), acquired KetaMD, Inc. in a bid to expand ketamine-based psychedelic treatment for depression and other mental health challenges. The overall value of the deal is $6.2 million in a combination of common shares and convertible notes. KetaMD was founded by psychedelic pioneers Zappy Zapolin and Warren Gumpel, along with mindfulness instructor and brand experience expert Kaia Roman and the company’s President and Chief Operating Officer, Leann Taylor.
Braxia said it plans to utilize KetaMD’s end-to-end telemedicine platform to provide access to at-home ketamine treatments for people suffering from depression and related mental health conditions. Treatments are medically supervised, guided virtually by registered nurses with mental health expertise, and are backed by psychiatrists and researchers in depression.
This comes as the use of ketamine as a fast-acting antidepressant in treatment-resistant patients has piqued the interest of experts both in psychiatry and in the wider area of neuroscience.
The deal allows Braxia to offer both patient-centric in-person and digital telehealth ketamine treatments. Braxia said it plans to build upon the KetaMD platform through new clinical trials in the U.S. and Braxia’s growing patient dataset to “support potential future development of digital therapeutics in the management of depression and other related mental health conditions.”
“Today marks a notable step forward in bringing awareness, accessibility, and scalability of the benefits of ketamine and psychedelics generally for those suffering from depression and other mood disorders,” said CEO Roger McIntyre. “We’ve seen improved outcomes firsthand from ketamine treatment in our clinics and in our clinical trials. Adding digital telehealth capabilities through KetaMD’s highly anticipated online and mobile platform strengthens our position to lead the medical use of evidence-based psychedelics, while accelerating our ability to get treatment to those in need, safely and quickly across the U.S. and Canada, and globally in the future.”
KetaMD is currently available in Florida but said it plans to roll the platform out to other key states this year.
The deal comes as a growing shortage of mental health specialists in the U.S. leaves many people with unmet mental health needs.
Braxia said the acquisition of KetaMD addresses this access gap, enabling the company to reach more people in need by uniting in-person clinics with telemedicine for innovative, effective, and legal treatments.
“Following the acquisition of KetaMD, Braxia is a well-positioned vertically-integrated psychedelic medicine company,” said Zappy Zapolin, Co-Founder of KetaMD. “Combined, Braxia and KetaMD now have operations ranging from clinics to bioscience R&D to an at-home telemedicine platform, overseen by Dr. McIntyre, one of the foremost authorities in mood disorders and treatments.”
Last week, Braxia released its year-end financial report card alongside its fourth quarter results ending March 31, 2022.
The company posted revenue of $1.49 million for the fiscal 2022 year ending March 31, 2022, a 47.5% gain versus $1.008 million in the previous year. In the fourth quarter of fiscal 2022, the company recorded revenue of $369,654, a 49.9% gain versus $246,673 in the same quarter the previous year.
The increase in revenue primarily reflects an increase in the number of treatments from the administering of ketamine at the Braxia Health clinics in Ontario, the release said.
The company saw net losses of $12.1 million for the year and an 86% decrease versus $88.8 million in a net loss in the previous year. The net loss includes a non-cash, share-based compensation of $2,422,562 (2021 – $2,874,857) and goodwill impairment of $5,275,374 (2021- $nil) related to the acquisition of the Canadian Rapid Treatment Center of Excellence CRTCE.
In the previous year, Braxia had completed a reverse-take over, the acquisition of CRTCE, and completed a brokered private placement which led to an overall increase in expenditures as the business evolved. The company’s management team said it has focused on cutting costs and reducing certain operating expenditures to focus on its core business.
Braxia’s cash and cash equivalents in the fourth quarter totaled $8.6 million, an 11.2% gain versus $7.64 million in the third quarter.
In addition to ketamine, Braxia said it has focused on researching and providing patients access to psilocybin for depression. Braxia Health, a wholly-owned subsidiary, commenced the first Health Canada approved multi-dose psilocybin-assisted therapy clinical trial last July and dosed its first participant that following November.
In connection with this clinical trial, the company reported positive preliminary results from its ongoing multi-dose psilocybin trial. The company reported meaningful improvements in depression severity observed — as measured by the Montgomery-Åsberg depression rating scale. Braxia said that the trial will be completed by December this year “at which point the full analysis will be completed and submitted for publication.”
Braxia Health also recently received approval from Health Canada for the Special Access Program (SAP) to provide psilocybin-assisted psychotherapy for a patient with Major Depressive Disorder in Ontario, according to the release. The SAP was amended on January 5 to include access to psychedelic compounds on a case-by-case basis outside of clinical trials. Braxia Health said it has since received SAP approvals for additional patients.
The company said it has also successfully recruited and trained medical and research staff as part of Braxia Institute to provide psilocybin-assisted therapy with high-quality safety monitoring. The program included 20 therapists licensed to practice in Ontario with specialized training in psilocybin-assisted therapy. All therapists were trained by the Braxia Institute and served as study therapists for the active psilocybin clinical trial, the release said.