Wesana Health Holdings (CSE: WESA; OTCQB: WSNAF) successfully reduced its annual operating expenses by more than $2.1 million, but the psychedelics research and development company still recorded a net loss of $2.7 million in the second quarter of 2022.
The company reported revenue of just $1,921 for the quarter. Wesana Health Holdings went public via a reverse takeover in May 2021, leading to a lack of reported revenue in the second quarter 2021.
The loss reduction is a direct result of Wesana’s management’s decision to focus only on “mandatory milestones as a result of cash constraints” with regard to its research and development in process.
The company said it expects to continue to operate in the red for the short term due to earmarked expenditures for the drug development business segment. Wesana management provided no timeline for that to change.
Year-to-date, revenue was $2,075, compared with $861 for the same period of 2021. Net loss increased slightly to $7.5 million.
After receiving positive feedback from its pre-investigational new drug meeting the U.S. Food and Drug Administration, Wesana is looking to accelerate clinical development of the SANA-013. The company plans to launch the next phase of clinical trials (Phase 1b/2a) in the first half of 2023, though this is subject to the availability of capital – which is somewhat questionable at this juncture due to a challenging capital environment.
Wesana also generated data from an animal study to support treatment of depression using a combination of psilocybin and cannabidiol.
“In connection with our increased focus on the drug development program, we have taken steps to optimize our operating structure through a strategic reorganization and a reduction in the workforce,” CEO Daniel Carcillo, wrote in a message to shareholders.
“The restructuring program has reduced layers of management, removed duplicative roles and outsourced certain roles to drive cost efficiencies.”
The company also launched a “strategic review” of its care delivery assets as part of its refocused strategy.