• NM is currently at full capacity w/in its 4 existing clinics and is experiencing a 2-week wait time for new appointments.
• Client visits have increased from 10,000 in 2019 to 20,000 in 2020 and are expected to be 65,000 in 2021 and, 100,000 in 2022 only considering the 8-clinic footprint (4 of the 8 clinics will only be operational for ½ to ¼ of 2021).
• Management noted it intends to expand into other states in this calendar year.
NM reported US$1.3MM in revenue in Q1/21 implying an annualized run rate of ~US$5MM for 2021 based on its 4 operating clinics. Management stated the approx. revenue run-rate of its existing clinics is ~$1MM/yr. With the addition of 4 clinics the run-rate would theoretically double – however, we note that the number of patient visits is quintupling on an annualized basis. Hence, we would expect revenue of >US$1MM/yr/clinic implying >US$8MM in revenue/yr annualized.
By comparison, Field Trip Health (FTRP:CSE) announced its 5th clinic opening today and its intention to add 5 more. Current revenue estimates for the company call for C$11MM in 2021 or ~US$9MM and the company has a $220MM EV compared to $58MM for NM. It is important to note that FTRP also has its own drug development program, whereas NM has a CRO business, having its clinics participate as patient intake/treatment locations as part of other companies’ psychedelic drug trials. I’m not sure how much value is being attributed to FTP’s drug development (and/or its hype of targeting 70+ clinics by 2024).
We expect that valuation gap to narrow as NM becomes more widely known within the psychedelics space and as it continues to expand, particularly outside of Utah.
Core Business: Clinics
• Current operates 5 clinics in Utah – 21st century version of psychiatry
• Largest publicly traded clinic company. (Field Trip also has 5 open with market cap of $230 million)
• 20,000 medically supervised client visits in 2020
• Agnostic to what psychedelic medicines – currently using ketamine and spravato
• Indications are primarily depression, anxiety, eating disorders
• Patients are referred – no shortage of demand
• Currently operating at ~$1 million in revenue per year per clinic ($1.3 million in revenue last quarter, largest rev of any public psychedelic company)
• Anticipates both organic and inorganic growth as it expands its clinic footprint
• Goal is 30-40 clinics with revenue of $2-$3 million per clinic
• EBITDA margin target is 30%
• I liken this business, in a sense, to the IVF clinic business, ie: a. Patients are looking for a positive outcome b. Clinic is agnostic to the drugs the enable the best outcomes c. Repeat visits are likely until get desired outcome d. Clinics are very profitable
Therapeutic Retreats:
• NM refers clients to trusted partners (Synthesis and Circadia) for psychedelic medicines not yet available in the United States
• Netherlands and Costa Rica
• NM is an investor in these partners
Contract Research Organization (CRO):
• Given its access to patients, NM is well positioned to act as a CRO to drug companies for their clinical trials
• Currently contracted for 8 clinical trials including recently announced one with Merck (~$0.5 million revenue)
Source: https://ceo.ca/nm?bd176a3c633b