Since Champignon Brands Inc. (SHRM.CN) (SHRMF) reported it was selected by the British Columbia Securities Commission for a continuous disclosure review, the psychedelic therapy and functional mushroom sector has come under pressure. The commission will review the company’s disclosure for the completion of certain acquisitions, and in the meantime, this development has impacted the entire sector.
Numinus Wellness Inc. (NUMI.V) is a firm we have been closely following from inception, and with recent announcements of significant additions to the leadership team, we are favorable on its focus on the human capital side of the business.
The psychedelic therapy market is an emerging opportunity with limited industry experts to pull from. Numinus has done a great job at identifying and securing talent, and we are monitoring how the new additions help drive the story forward.
First, Numinus attracted Dr. Evan Wood as Chief Medical Officer. Over a 20-year career, Dr. Wood has gained international recognition as a leading researcher into addiction, most recently as the Executive Director of the British Columbia Centre on Substance Use (BCCSU) — a leading research organization in the treatment of substance use and addiction.
One of Dr. Wood’s first recruits was Dr. Devon Christie as Medical Director. A family physician with a focused practice in Multidisciplinary Pain Management and a clinical instructor with the UBC Department of Medicine. Dr. Christie is tasked with advancing Numinus’s protocol development and safe delivery of the company’s patient-focused model.
A few weeks ago, Numinus announced the formation of a Clinical Advisory Council chaired by Dr. Wood. The council will leverage the expertise of its members and be responsible for program development, knowledge mobilization, and driving policy change in the psychedelic assisted therapy space.
Dr. Wood has brought together some of the brightest minds in the psychedelic therapy market, and we are favorable on the experts that make up Numinus’s Clinical Advisory Council. Dr. Pam Kryskow is an addition we are particularly impressed with. She is trained in ketamine-assisted psychotherapy and functional medicine and is currently working with other university experts on research related to ketamine-assisted psychotherapy, psychedelic microdosing, MDMA for chronic pain, psilocybin and psychedelic therapy.
In addition to advancements on the human capital side, in early June, Numinus was granted an amendment to its current Health Canada that allows it to conduct research to standardize the extraction of psilocybin from mushrooms. It is the only public company in Canada licensed to do this research. Going forward, the company can proceed with the production of naturally sourced, sustainable psilocybin at costs that may be much lower than synthetic psilocybin. The amendment also allows Numinus to develop and license its own exclusive IP for further product development in partnership with leading research organizations.
We are favorable with the granting of the amendment as we believe it represents an important milestone for the business. It adds to the update Numinus issued in May outlining its plans to scale operations, and we are excited about the growth opportunities the management team is focused on.
The company announcements over the last few weeks indicate significant advancements, and we have been surprised by the muted response from the market. We are of the opinion that the issues with Champignon Brands have put Numinus under unnecessary pressure.
Numinus has attractive growth prospects and a favorable risk-reward profile. We are favorable on the structure of the operation and its leadership and believe it provides an opportunity that is not yet fully understood by the market. Going forward, we expect to see the management team continue to execute on previously announced initiatives as it works to bring the business down a path to profitability.
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