Novamind became the latest psychedelics company to go public through a reverse take-over with Hinterland Metals Inc.
The company debuted in the Canadian Securities Exchange on Tuesday under the symbol "NM."
In late November, Novamind closed a private placement for CA$10 million ($7.8 million), adding to a total of CA$15.3 million raised since its inception.
As opposed to other psychedelics companies, Novamind is not building a library of intellectual property around psychedelic molecules. The company’s goal is to develop therapeutic protocols in conjunction with other players in the space, as well as offering treatment options for patients through a network of clinics and retreats.
Mental Health Clinics
According to Novamind CEO and director Yaron Conforti, industry peers are establishing new clinics, developing new brands, and going through the hard process of cultivating a patient base. They're hiring psychiatrists and building an infrastructure from scratch.
“In our case, we very much partnered our way into this business,” Conforti told me.
“We were lucky to partner with someone very special who's already been identified as a thought leader in psychedelic medicine for years now,” he continued, in reference to Reid Robison, co-founder of Cedar Psychiatry and Cedar Clinical Research.
In July, Novamind acquired the Utah-based Cedar network for CA$3.05 million (CA$1 million in cash and CA$2.05 million in Novamind shares), welcoming Robison as Novamind’s Chief Medical Officer.
The Cedar clinics offer regular outpatient mental health treatments like cognitive behavioral therapy, other forms of talk therapy, prescription management and psychiatric services.
Cedar is also known for offering more innovative and alternative neuropsychiatric modalities like transcranial magnetic stimulation and ketamine-assisted psychotherapy.
Novamind is planning to expand the clinic network organically and through M&A, with the opening of a fifth Utah location during the first quarter of 2021.
The clinic network is projected to integrate new forms of psychedelic treatment as they become legalized.
Because of the experience and track record of the Cedar network, the company is expecting to become a trusted partner to apply psychedelics-assisted therapy once the treatments go online.
For Conforti — and many others in the space — MDMA-assisted therapy is expected to be federally available by 2023 and some form of psilocybin treatment will follow by 2025.
Novamind’s Clinical Research Arm
“In short, there's two cores for our business,” Conforti says. “There's a clinic network and there's a clinical research facility which is also turning into a network.”
The two cores work in a symbiotic relationship to one another. Cedar Clinical Research is Reid Robison’s pursuit as a clinical researcher.
“Today, there's about a dozen clinical trials,” he adds, calling Novamind's clinical research strategy “drug and compound agnostic.”
This means that Novamind’s research is not dedicated to discovering and gaining intellectual property on any particular drug or treatment.
“We are not a drug developer and [Cedar Clinical Research] does not seek to develop drugs or invest in building walls of IP so we can sell a proprietary product. We're a developer of therapeutic protocols,” Conforti says.
The company is expecting to collaborate as a contract research organization for other companies or research institutions in the sector.
The contract research organization (CRO) model is a well-known model that serves pharmaceutical clients, and can offer large margins in the long run. For Cedar and Novamind, the key lies in developing the very specialized sites that are required to study patients under the influence of psychedelic drugs, which is not the standard environment used in mainstream clinical research.
“If someone's tripping for 6 to 12 hours in a certain set and setting, it's a very different requirement than a typical clinical trial,” he explains.
'Treating People Today'
When asked why an investor should choose Novamind among all the psychedelics companies that went public in 2020, Conforti says “the differentiation is that we're treating people today."
“I don't think anybody understands today what the successful model of psychedelic clinics of the future looks like,” he adds.
Most of the investors that took part in the company’s recent CA$10 million round understood that.
“We're OK with our approach in who we are today without fully understanding exactly what our clinic and clinical research network will look like on a 12/24 month plus timeline.”
How Can Patients Gain Access?
It's possible to leverage today’s regulatory environment to offer legal treatment to people in need and especially for patients who have been struggling with chronic psychiatric conditions.
In 2019, the company laid down a strategic investment in the Synthesis Institute, a legal psilocybin retreat center in the Netherlands. Patients can be referred to this center to begin psilocybin-assisted psychotherapy today. Novamind’s involvement in Synthesis is an arm’s length investment.
Concurrently, the company is establishing its own psychedelics retreat in Costa Rica, leveraging much of the experience gained from partnering with Synthesis. The retreat, called Circadia, got its launch delayed due to the pandemic.
Lastly, the company is looking to use its available tools to offer assistance to those in most desperate need.
“In the case of desperate people, that we deem are appropriate, and can't access things like psilocybin or MDMA -which is in fact not legal anywhere on the planet- then we might be able to get them access through our clinical trials,” says Conforti.
Novamind also plans to develop treatment protocols for what Conforti calls “hybrid retreats,” which combine the rigorous expertise of clinics with the humane setting of group therapies in nature retreats.
Working with groups also provides the possibility to bring costs down, offering treatment to larger numbers of people who otherwise might not be able to afford it.
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