Numinus Wellness Inc. (NUMIF) Q3 2023 Earnings Call Transcript

Numinus Wellness Inc. (OTCQX:NUMIF) Q3 2023 Earnings Conference Call July 17, 2023 5:30 PM ET

Company Participants

Jamie Kokoska – VP, IR

Payton Nyquvest – Founder & CEO

Nikhil Handa – CFO

Conference Call Participants

Michael Okunewitch – Maxim Group

Robert Sassoon – Water Tower Research

Pablo Zuanic – Zuanic and Associates

Operator

Good afternoon, and welcome to Numinus Wellness Inc.’s Fiscal Third Quarter 2023 Results Conference Call. A question-and-answer session for analysts and institutional investors will follow the formal remarks. As a reminder, this call is being recorded.

I would now like to turn the conference call over to your host Jamie Kokoska, Vice President, Investor Relations. Please proceed.

Jamie Kokoska

Thank you, Sarah. Good afternoon, everyone, and thank you for joining us for our fiscal third quarter 2023 results conference call. Discussing Numinus’ performance today are Payton Nyquvest, Founder and CEO; and Nikhil Handa, Chief Financial Officer. Joining them for analysts questions at the end of our formal remarks are Reid Robison, Chief Clinical Officer and Paul Thielking, Chief Science Officer.

The following discussion may include forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our MD&A for the quarter ended May 31, 2023 and in our other Canadian securities filings available on SEDAR.

Numinus does not undertake to update or revise any forward-looking statements to reflect new events or circumstances except as required by law. Our third quarter results were made available earlier this afternoon. We encourage you to review our earnings release, MD&A and financial statements, which are all available on our website as well as on SEDAR. As a reminder, all figures discussed on today’s call are in Canadian dollars.

I’ll now turn the call over to Payton Nyquvest, Chief Executive Officer.

Payton Nyquvest

Thanks, Jamie, and good afternoon, everybody. I’d like to start by extending the utmost gratitude that our work is conducted on the unseated homeland of the Musqueam, Squamish and Tsleil-Waututh (ph) and other sovereign indigenous lands across and territories across Turtle Islands. We’re committed towards the path — committed to a path towards truth and reconciliation through continuous learning, reciprocity and humility.

Our fiscal third quarter was focused largely on better aligning our business with the opportunities that we see ahead, particularly as it relates to the expected approval of MDMA-assisted therapy next year. The several — the next several quarters will be a significant and pivotal time for both Numinus and the sector as we are prepared to offer this important new treatment. We’ve already accomplished several important initiatives to set Numinus on a path — on the best path forward to delivering MDMA-assisted therapy as quickly as possible once approved.

First, in order to enable our platform to scale rapidly and efficiently, we’ve launched our new Numinus Network licensing model. This new growth strategy will allow practitioners with their own existing or future business to license the Numinus brand, protocols and back office infrastructure while also benefiting from our extensive and growing practitioner training programs. This model requires much less capital for clinic expansion and leverages the investments we’ve already made in our IT systems, marketing strategies and insurance payer processes.

We’re also exploring other partnership models to extend the Numinus brand or our treatment protocols to even more clinics and regions. I’m pleased to say that we have already welcomed our first Numinus Network practitioner partner just outside of Toronto, and expect to welcome many more Numinus Network additions in the several weeks and months.

To support licenses looking to open a Numinus Clinic, we also recently announced a partnership with the Healing Commercial Real Estate, a mental health focused clinic real estate owner to offer turnkey lease clinic locations in regions, which demonstrated and grow — with demonstrated and growing demand for our services. We believe this will provide significant benefit to future licensees, who are interested in opening new clinic locations as it alleviates any site construction and design burden.

Second, we’ve continued to build out our practitioner training programs to enable a greater number of practitioners to become certified and experienced in providing psychedelic-assisted therapies. Just last month, we’re very excited to announce a new partnership with MAPS to offer experiential training for practitioners — for practitioners to provide MDMA-assisted therapy. This training experience will be available through a clinical trial, Numinus Wellness Research is sponsoring.

Once the clinical trial application is submitted to Health Canada is approved, the MDMA-assisted therapy experiential opportunity will be available only through Numinus and would be — and would enable practitioners interested in an MDMA-assisted therapy, the ability to observe, deliver and receive the MDMA therapeutic protocol as a part of their training experience to further their understanding of psychedelic-assisted therapy.

Practitioners who complete our MDMA-assisted therapy education program or have already completed previous MDMA-assisted therapy programs and are qualified to enroll in our practitioner applications course, we’ll be able to apply and to participate in the experiential training trial. We believe this new offering is a gateway to greater collaboration with MAPS in the months ahead.

Third, to help us effectively market our practitioner training offering and our mental wellness services in general, we’re pleased to recently partner with Healing, MAPS. To showcase numinous on a well-established site, with more than 300,000 organic visitors per month, this website is a key online information source for those seeking to qualify psychedelic-assisted therapy providers in their area, as well as practitioners who are actively building their clientele. This partnership will also provide us with aggregate market intelligence regarding where demand for our services is growing and where there is still unmet demand. This information will be vitally important as we embark on our clinic expansion and licensing strategy.

And fourth, we demonstrated our financial discipline by reviewing all of our vendor and agency agreements during the quarter, ultimately renegotiating or terminating many. And we’ve made the difficult but important decision to reduce our team in non-revenue generating departments. Ultimately, approximately 8% of roles were eliminated while other team members were redirected towards growth oriented initiatives and activities.

Collectively, these activities have reduced Numinus’ annualized cash expenses by approximately $4.2 million extending our cash runway past anticipated MDMA approval. It is expected MDMA assisted therapy will receive FDA approval in early to mid-2024, presenting a large growth opportunity that should greatly accelerate Numinus’ path to profitability and positive cash flow through higher margin services.

We’re confident the initiatives we completed in the last several months have set Numinus on a strong path forward with strong sector relationships, a capital light growth model, and an extended cash runway. Collectively, they position Numinus as a leader in clinical infrastructure and practitioner training, uniquely positioning us to benefit from MDMA-assisted therapy approval in 2024.

Turning to our third quarter performance and operational highlights, I’m pleased to say that all of our revenue producing business lines achieved meaningful revenue growth. We generated $6 million of revenue during the quarter, representing 12.6% growth from the previous quarter, due largely to increased client appointments and strong performance from Cedar Clinical Research, our clinical research business.

Our wellness clinics achieved 5.5% revenue growth compared to the prior quarter, and continue to contribute the largest portion of our revenue across businesses, generating $5 million or 83% of the total revenue during the quarter. Our

U.S.-based clinics continue to drive stronger revenue and margin contribution, due mostly to our well established Utah location. We’re really pleased with how many of our clinics continue to mature and further increase utilization, but we recognize certain clinic locations could be further optimized, possibly through streamlining, repositioning or targeted marketing.

Our management team is working closely with our underperforming sites to more effectively contribute to the overall performance. Overall, our wellness clinics generated a healthy gross margin of 35.2% and gross profit of $1.8 million during the quarter. Appointments across our wellness clinics continued to grow.

In total, we completed more than 21,520 client appointments during the quarter, representing an 11.2% increase compared to last quarter or 331 appointments on average per operating day. 8.8% of our appointments were made by new clients during the quarter, in line with the past several quarters. The mix of our client appointments continues to demonstrate the effectiveness of offering an assortment of mental health services rather than focusing on one type of treatment.

By offering a wide range of mental health and wellness services, we’re able to provide our clients with the best possible client outcomes based off of their unique situations and treatment needs. 16.3% were for ketamine-assisted therapy or KAT-related appointments, while 6.1% — 6.3% worked for Transcranial Magnetic Stimulation. And the vast majority of the rest were for traditional talk therapy services, which is often a first step for a new client and used prior or in conjunction with other modalities.

Our practitioners are at the front line of our wellness clinics and continue to have the most important role in providing top quality patient care and outcomes. At the end of the quarter, we had a 130 practitioners available for client treatments. This is a slight decrease from a 133 at the end of the prior quarter due to a strategic shift in how we employ practitioners in Canada.

Specifically, we’re working with — we’re working to increase the number of full time practitioners rather than part time to drive greater practitioner engagement and clinic utilization rates. Cedar clinic clinical research continued to demonstrate its strategic importance for Numinus, with several high profile, clinical trial, clients during the quarter, namely, CCR managed the clinical trial sites for both COMPASS Pathway’s phase 3 clinical study of psilocybin therapy, and MindMed’s Phase 2b study evaluating MM-120 for General Anxiety Disorder. In fact, during the quarter, CCR’s Draper, Utah, research clinic was named the top enrollment site for the MindMed study.

In total, CCR managed clinical trial sites for 18 clinical trials during the third quarter, up from 16 last quarter, and conducted 318 clinical trial patient appointments, up significantly from a 152 last quarter. We continue to see the important strategic value of CCR’s research work as allows us to build trusted relationships with drug development companies across our sector and continues to give us cutting edge expertise in our field. Just as important, CCR is providing a meaningful financial contribution to our overall business.

In the fiscal third quarter, CCR generated a $1 million of revenue from clinical trial, site management services, a 66.7% increase compared to just last quarter and $320,000 of gross profit. Just a reminder, CCR’s business volumes are more variable than our customer facing wellness clinics, as clinical trial enrollment, a determining factor of CCR’s revenue generation, will vary based on the number of clinical trials underway during the quarter.

As you’re likely aware, we welcomed a new CFO to Numinus just a few weeks ago, and we’re very excited to be working with Nikhil Handa, who joins me on the call today. I want to personally thank our former CFO, John Fong for all he’s done to help build — help us build Numinus into the business it is today. John has decided to focus on his family as they work through a family health matter. We all wish everyone in John’s family the very best.

Nikhil brings a wealth of financial management and capital markets experience to Numinus. He has had particular success in driving growth oriented businesses towards profitability. He is already making a great impact at Numinus.

And with that, I’ll turn the call over to Nikhil to discuss our quarterly results in more detail. Nikhil?

Nikhil Handa

Thanks, Payton, and good afternoon, everyone. I’m excited to be here at Numinus, and I see great opportunity ahead. I also wanted to personally thank John Fong for all his support during the transition of the finance leadership.

Beginning to the quarter, during the fiscal third quarter, revenue grew across both our wellness clinics and clinical research division. Revenues totaled $6 million, a 12.6% increase from the prior quarter, but a 713.3% increase from the same quarter of last year, which was prior to the acquisition of Novamind.

Revenues from our wellness clinics, clinic network comprised 83% of total revenue during the quarter, a decrease from 88% in the second quarter due only to the exceptional revenue growth achieved at CCR. Geographically, U.S. operations comprised 85% of the total revenue for the quarter, nearly unchanged from 86% last quarter.

Third quarter gross margins were 34.5%, compared to 39.3% last quarter, but a significant increase compared to the 24.4% in the same period last year. As Payton mentioned, we will continue to optimize our U.S. clinics through streamlining and repositioning and through the sharing of best practices across our clinic network. We’re focused on ensuring our underperforming sites more effectively meet their full gross margin potential.

Gross profit for the third quarter was $2.1 million in line with last quarter. During Q3, management undertook a detailed cost review, which included the review, renegotiation, or cancellation of certain vendor contracts, as well as an 8% staffing reduction in non-revenue producing roles. As a result of these activities, we believe we have reduced our annualized cash burn by approximately $4.2 million and extended our cash runway beyond expected MDMA-assisted therapy approval.

As some severance costs are still being expensed, we expect to see the real impact of these changes beginning in August. In total, we booked $564,000 of event driven staff restructuring expense during the quarter and $565,000 in aged receivables associated with our unit U.S. clinics were written down, which weighed on operating expenses during the quarter.

Excluding these two event driven expenses, operating expenses were $8 million during the third quarter, a 12.6% decline from the last quarter. We believe there may be additional opportunities to reduce cash expenses in the months ahead as we look to optimize clinic operations and non-revenue generating operating expenditures.

Net loss and comprehensive losses for the quarter were $7.3 million or $0.03 per share in line with the prior quarter and total net cash outflow during the quarter was $6.7 million, also in line with last quarter. We ended the quarter with $13 million of cash on hand and with $12.9 million of working capital. With the cost containment actions we took during the quarter, we expect our monthly cash outflows will reduce to $1 million a month in the short term.

This, combined with revenue growth positions us well to operate well past expected MDMA-assisted therapy approval in the U.S. next year, when we expect significant growth in revenue and margin expansion. While future pricing of MDMA-assisted therapy is still to be determined, we expect it and practitioner training revenues will meaningfully contribute to revenue and margin growth in future years.

And with that overview of our financial results, I’ll turn the call back over to Payton for some closing remarks. Peyton?

Payton Nyquvest

Thanks, Nikhil. We’re excited about the opportunities ahead for Numinus. We remain one of the best positioned companies in the psychedelic sector with a diverse business model that benefits from several complementary revenue streams. Our growing network of 12 clinic locations is one of the largest clinical platforms in North America providing psychedelic-assisted therapies and we’re uniquely positioned to be the clinical research and delivery partner of choice for many drug developers and research organizations.

Over the next several months, we’ll be focused on activities that position us well for the expected future approval of MDMA-assisted therapy and opportunities that could evolve from that. We are focused on growing our Numinus Network licensing and partnership model establishing more locations where psychedelic-assisted therapy can be received by a growing population of people in need.

We are also focused on driving revenue growth and offer optimizing our operations across our existing network of wellness clinics through targeted marketing efforts and in some cases refinement of service offering and delivery. And we are routinely evaluating ways to reduce operational costs throughout our business in order to drive margin expansion and conserve capital. We continue to believe that Numinus is uniquely and opportunistically situated as the preeminent clinic per operator in the psychedelic sector.

Our investments in medical and regulatory expertise, technology, back office support, and marketing have laid a strong foundation that we can leverage for the Numinus Network growth channel. And we’re demonstrating financial discipline as we review all aspects of our operating expenses. We also continue to see exceptional growth potential through our practitioner training offering, which is not only strategically important for us ensuring a strong pipeline of trained practitioners as our network of clinics expands and as the overall sector matures.

It also provides another complementary revenue stream with services that are easily scalable and further establishes our brand as an industry leader. As regulatory reform neers (ph), we expect many drug developers, practitioners, and other sector participants to be — we’ll begin recognizing the importance and benefit of partnering with a strong clinic operator with proven patient protocols, systems, and infrastructure. For many, Numinus is uniquely positioned to be that partner.

I look forward to sharing many exciting updates with you in the next several months as we expand on our sector relationships and implement strategies to support our drive to reach positive cash flow and profitability as quickly as possible.

And with that, we’ll open the call up to questions from analysts and institutional investors. Operator?

Question-and-Answer Session

Operator

Thank you. We will now conduct the question-and-answer session. [Operator Instructions] Your first question comes from the line of Michael Okunewitch with Maxim Group. Please go ahead.

Michael Okunewitch

Hi, Payton. Thank you for taking my questions, and welcome on board, Nikhil. So I guess to start off, I have a couple of financial questions, but I want to start off on something you mentioned in your closing remarks, to see, if you could talk a little bit more about how the experiential training partnership with MAPS helps position Numinus for early adoption of MDMA-assisted therapy and then what kind of revenue opportunity that would look like? Do you see therapist training as one of the primary bottlenecks or do you see a bigger impact from something like physical infrastructure?

Payton Nyquvest

Hey, Michael. Yeah. It’s a great question. We continue to see practitioner training and not really, we’ve seen that in ketamine-assisted therapy, but I think exponentially more so with MDMA-assisted therapy, practitioner training will continue to be the biggest bottleneck we think for the foreseeable future. And so I think what this experiential training opportunity does is really give people an opportunity (ph) to deepen their experience with MDMA-assisted therapy in a legal and safely provided way. And while we don’t know exactly what the approval or sort of accreditation criteria will be from the FDA once MDMA is approved.

We do think that the amount of practitioners who will be looking for an MDMA-assisted therapy experience that they can have represented as a part of how they’re engaging with potential clients as being really a critical and ultimately necessary one. And really was highlighted by as we are down at the MAPS conference in Denver just earlier this month that had about 12,000 people there of which the majority of which were practitioners.

Rick Doblin and I, who for anybody who doesn’t know Rick is the founder of MAPS, did a talk that was actually standing room only (ph) of a couple thousand people to talk about experiential training, and the amount of interest and outreach since then has really been quite overwhelming. So very, very strong demand and to your question around revenue generation for us because of the work that we’ve done to be able to provide training pathways for people, we definitely see this as a significant revenue generating opportunity as we know that there’s going to need to be thousands, if not tens of thousands of practitioners trained in the next couple of years to be able to meet the demand.

Michael Okunewitch

All right. Thank you for that. And then I do want to touch a bit on some of the financials, in particular, first off, there was a 5% decline in gross margins over the quarter as you implement your changes in staffing to shift from part time towards full time practitioners. So do you expect this impact to be transitory or offset by a greater capacity in revenue? How do you see that?

Payton Nyquvest

Nikhil, do you want to take that one?

Nikhil Handa

Yeah. Thank you, Michael for the question. We would see it more as transitory to answer that shortly, but I’ll give you a bit more context. While we do see many of our clinics continue to perform well, high utilization rates, great service offerings, new client acquisition. We do have certain locations that have room for optimization. And these are clinics that are currently under improvement plans. We’re looking at not just the mix of service, but also just how to ensure further utilization and sharing our best practices.

So our management team is working very closely to focus on gross margin expansion for these given clinics. And additionally, we have added several more full time practitioners throughout the quarter, which also this past quarter increased our cost of rent revenue relative to the prior quarter. So we are focused on gross margin expansion specifically.

Michael Okunewitch

All right. Thank you for that. And then one last one for me. I’ll hop into the queue. So you did mention that you have an expectation that current capital is sufficient to extend through MDMA approval. And you also, I believe said, that you’re expecting reduction cash outflows to around $1 million per month. So could you just please provide a bit more color on what assumptions are going into that expectation?

Nikhil Handa

Sure, Michael. It’s Nikhil here again. So just to clarify the question in terms of what assumptions are going into the expectation of a $1 million a month cash burn and also the expectation of when there will be MDMA-assisted therapy approval? Just two separate questions?

Michael Okunewitch

Of the — more regarding the assumptions that go into the runway projection.

Nikhil Handa

Run rate. Okay. Great. Yeah. So maybe I’ll just start that with thinking back to the initiatives we took in May to significantly reduce our cash burn And we’ll — again, we’ll see those really starting to provide fruitful results in August just given the way staffing reductions and severance works also exiting some vendor contracts. But this is largely really about a continued focus from us on initiatives, for revenue growth and then, obviously, optimizing our COGS and OpEx. So there is some revenue growth anticipated in there, but relatively conservative, we’re not including in there any type of assumption on new growth channels, nothing related to MDMA approval. They’re really just the base offering.

And then we do continue to look at ways to further reduce expenses whether that’s on OpEx or COGS. So the assumptions really are a very modest revenue growth, which we’ve discussed and we’ve seen in prior quarters as well, so keeping some of that trend along with the gross margin expansion that we discussed with your prior question. And then a continuous refinement of our operating expenditures to support the clinics and CCR.

Michael Okunewitch

All right. Thank you very much. I really appreciate the additional clarity and congrats on the growth this quarter.

Payton Nyquvest

Thank you.

Nikhil Handa

Thanks, Michael.

Operator

[Operator Instructions] Your next question comes from the line of Robert Sassoon with Water Tower Research. Please go ahead.

Robert Sassoon

Hi. Thanks for taking my questions. Would you be able to add color to the progress in the rollout of your licensing program because, obviously, as you’ve guys – you mentioned, you’ve signed up on (ph). So how is that going to expand and what sort of time line are you looking at in terms of expanding that rollout?

Payton Nyquvest

Yeah. Sure. Thanks, Robert. It’s Payton. As I kind of mentioned and really highlighted by the MAPS conferences, there’s very much a very large growing demand not just for services currently, but also as people start to get prepared for MDMA-assisted therapy and I think the MAPS conference down in Denver was a little bit of a seminal moment for the space where MAPS was able to provide some guidance on when they anticipate approval and also start to provide people with pathways for how to start to get prepared.

And so while we’re hesitant to give too much guidance in regards to call it, number of licensees or a time line. What we have seen is a huge amount of interest and more so on our side is now just prioritizing which sites we want to move into first. But we do anticipate strong continued growth there. And in particular, as we know over the next coming couple of quarters. We anticipate a lot more guidance in regards to timing of exactly when MDMA will be approved. So we believe that over the next coming couple of weeks and months, continuing to convert a number of those licensees, and we look forward to updating everybody with the progress.

Robert Sassoon

Right. And on the partnership with healing MAPS, can you just maybe elucidate what the — what you see the value of that partnership will be for Numinus?

Payton Nyquvest

Yeah. As I mentioned, now Healing MAPS is getting about 300,000 monthly visitors to their website. And I think as the market has matured greatly in particular around ketamine-assisted therapy, but also more broadly than that. People are really looking for who are best-in-class. And we believe, obviously, Numinus has established itself as such. And this really allows us to be able to engage with people who are looking for services, but also as we think about expansion, being able to locate, which geographies are most interested in services and where we see unmet demand that we could provide access for.

Robert Sassoon

And does that give you sort of an idea of where you will want to focus your expansion, particularly in the states?

Payton Nyquvest

Sorry, could you repeat that question again?

Robert Sassoon

Does it also help you in identifying areas where you would focus on expansion even for the license in the program in [indiscernible].

Payton Nyquvest

Yes, absolutely.

Robert Sassoon

All right. And just finally, on the margin side. You — there are two sort of factors you’ve mentioned the mix of focusing on full-time packages as opposed to part in practitioners. Out of the 130 practitioners that you have currently, what is the actual mix now between full-time and part time? And is there a sort of a target as well an optimal mix for you.

Payton Nyquvest

Majority is now full time and really helps with practitioner retention Canada, maybe a little bit less, Canada is about half and half. And I think as we continue to be competitive as a employer of mental health practitioners, I think we’ll probably continue to see that. And in particular, thinking about MDMA-assisted therapy where — that might be one of a number of services that a certain practitioner can offer giving those practitioners a single place to practice so that they don’t have to move their practice to a number of locations, we believe is advantageous and for practitioners looking for a place to practice positions us as kind of an employer of choice.

Robert Sassoon

All right. And is that going to have an impact on your cost gross margins in the next quarter or so?

Payton Nyquvest

Yeah. We believe it should help with improving.

Robert Sassoon

Okay. Well, that’s it from me. Thank you very much for answering these questions.

Payton Nyquvest

Thanks, Robert.

Operator

Your next question comes from the line of Pablo Zuanic with Zuanic and Associates. Please go ahead.

Pablo Zuanic

Thank you. Payton, on the assumption that we get an MDMA approval for June 2024, let’s say, how soon do you think you can actually start providing the services because guidelines and other regulatory issues probably have to get sorted out, right? Is it a matter of two, three months? Is it a matter of a year? How do you think about that?

Payton Nyquvest

I think what the work that MAPS is done, once approval, we should see it be able to be implemented quite quickly. You can kind of look at Privado as an example, obviously, some rescheduling that will be a little bit different with MDMA, but we’ve always positioned ourselves to be first and with the amount of familiarity we have as being a clinical trial site for the MAPS work now with the experiential training as soon as MDMA is available for practice, we anticipate to be first and in a significant way as well.

Pablo Zuanic

Thank you. And related to that, in the MDMA that you filed today, you mentioned the practitioner angle. In the case of Canada, you’re talking about potential exclusivity with that opportunity if the trial is approved. Do you have potential to have the exclusivity in the U.S. also or how would that work?

Payton Nyquvest

Yeah. So I think important to highlight, while that trial will start to take place in Canada. It’s not restricted just to Canadians, Americans can also come up and get the same training opportunity. And it is something that we do anticipate potentially being able to replicate in the United States as well. First of all, we’ll worry about getting Canada approval launch, but it’s definitely something that we’ll look to continue to build out. But with the amount of practitioners looking for access Canada is not too far away from the U.S. and also with favorable financial and economic opportunities for Americans coming up to the U.S. Americans coming up to Canada, I’m sorry.

Pablo Zuanic

Yeah. No, understood. But my question is more — thank you for that color, but would that be a possibility within the U.S. at some point also that you could have that exclusivity in the U.S.

Payton Nyquvest

We believe that we should be able to replicate something like that in the U.S., especially with Numinus being the sponsor of the trial.

Pablo Zuanic

Right. That’s great. Look, on the last question, in terms of — I don’t know if you can give any guidance in terms of Numinus Network wellness clinic. You mentioned about 1% in Toronto, right? One practitioner signed up. Where do you think it would be by end of the year in that regard?

Payton Nyquvest

Yeah. So again, hesitant to give too much guidance in regards to amount of clinics because there’s variability depending on what services and size that a certain practitioner is looking for. But all to say, we do see a very, very strong amounts of demand and where we’re prioritizing efforts at the moment, primarily around people who are looking for multiple sites or significant types as well.

Pablo Zuanic

Right. Look, I’m going to add one more, if I may. I mean, in a very short answer, the state of the ketamine-assisted therapy market right now, where are we with that? I mean, on the one hand, people that go over supply. On the other hand, the demand seems to be weak because there’s not enough money for those patients. I mean how would you characterize that right now?

Payton Nyquvest

I definitely wouldn’t say demand is weak. And I think looking at the Privado numbers, I think they’ve greatly exceeded where people thought that the sort of state of the MD — or state of the ketamine landscape is. I think what has happened is definitely a showing of which models are working and which models are not working, which we strongly believe that ours is working extremely well. And so with that, I think you’re going to continue to see growth there. And I think as we’ve kind of gone through a bit of a consolidation phase within the ketamine service providers. I think now that best practices have been kind of floated to the top, I think you’re going to continue to see demand there. And with that strong client outcomes as well.

Pablo Zuanic

Right. Thank you.

Operator

As there are no further questions at this time. I will turn the call to Payton Nyquvest for closing remarks.

Payton Nyquvest

Thank you, operator, and thank you, everyone, for joining us on the conference call today. We look forward to speaking with you in November when we will report our fiscal fourth quarter and year-end 2023 results.

Operator

This concludes today’s conference call. You may now disconnect your lines.