WA Biotech company Emyria [ASX:EMD] announced today the early-stage recruitment of patients for its phase 2B, MDMA-assisted trial to treat PTSD.
Since 1 July of this year, the trial has progressed as Australia made history by becoming the first country to down-schedule MDMA and psilocybin for controlled clinical use.
Australia’s medicines regulator, the Therapeutic Goods Administration (TGA), announced the change in early February to some controversy. Many psychiatrists hailed the move as a step in the right direction while others expressed concerns that the decision may have been rushed.
Emyria certainly viewed the change as an opportunity for novel treatment and had secured a clinical-grade MDMA supply within weeks of the announcement and acquired the psychological trauma centre, Pax Centre earlier this month to bolster its facilities for future trials.
Investors’ spirits are high on the idea, with a week reversal of their share prices turning around what has been a tough year for Emyria. Shares were up by 16% this week, recovering some ground lost this year as shares slipped down by 35.56% in the last 12 months.
So, is Emyria taking a big risk, or will the move herald a breakthrough in PTSD treatment?
Source: TradingView
Australia steps ahead of the world
Emyria announced today that the first patient has been recruited for its innovative Phase 2B MDMA-assisted therapy trials for PTSD.
This comes after changes made by the TGA meant that from 1 July, Australia became the first country in the world to down-schedule MDMA and psilocybin to allow psychiatrists to prescribe the drugs for controlled clinical use.
Other nations such as the US, Canada, and Israel have allowed individual use of these drugs on compassionate grounds or in limited clinical trials. However, none have taken the bold move of regulating the drugs as medications like Australia.
Current estimates of the cost of three rounds of treatment for patients are around $25000, something Emyria claims they will target to reduce significantly.
Source: Emyria
Research into the use of MDMA as a therapeutic drug first began in the 1980s but stopped when the US made it illegal despite researchers’ protests.
In 2017, a new study was done in the US which tipped the Food and Drug Administration (FDA) to grant the drug a Breakthrough Therapy Designation, which allowed limited trials to continue as it noted that the designation meant ‘…that this treatment may have a meaningful advantage and greater compliance over available medications for PTSD.‘
Follow-up research then found MDMA-assisted treatment effective in improving PTSD symptoms — with 67% of participants no longer meeting the criteria for PTSD diagnosis after a year of treatment.
Australia began its first trials in 2020 and has completed many since then, which prompted the change by the TGA.
Results indicated that MDMA assists psychotherapy by reducing defensiveness and anxiety, increasing relaxation and improving the mood of patients — allowing them to revisit traumatic memories without being re-traumatised.
With Australia making the first step, what could this mean for Emyria as one of the first out the gates?
Emyria’s advantage and outlook
The approval of MDMA-assisted therapy could be a breakthrough for Emyria, who has positioned itself as one of the first movers in the space.
The acquisition of the Pax Centre on 3 July this year will allow Emyria to integrate its testing into a suite of integrated clinical services that can provide wrap-around care and expand its growing list of treatments.
The centre currently staffs 20 mental health professionals across several disciplines serving around 4000 patients.
It could provide a novel and effective treatment site for people with PTSD and generate significant revenue for Emyria.
Andrew Forrest’s investment company Tattarang also took an interest in the opportunity and backed Emyria in November last year with a $5 million share placement, giving him a 7.3% stake in the company.
Emyria called the recent actions a positive step forward, stating today:
‘Building on the momentum of Emyria’s recent acquisition of The Pax Centre, this pivotal first step supports Emyria’s mission to pioneer the development and delivery of MDMA-assisted and psilocybin-assisted therapies for patients facing major mental health challenges.’
In addition to the financial benefits, the approval of MDMA-assisted therapy would also be a major coup for Emyria’s reputation.
The company would be seen as a leader in the field of psychedelic-assisted therapy, and it would be well-positioned to capitalise on the growing demand for these new therapies.
Investors should watch the leadership closely to ensure the company doesn’t squander this opportunity as it’s recently struggled to turn a profit, with last year’s net profit down by $7.32 million.
Emyria intends to issue new shares around the end of September this year, providing a good window for investors looking for more value.
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