Currency in USD
Last close As at 07/06/2023
USD1.96
▲ 0.03 (1.29%)
Market capitalisation
USD124m
Research: Healthcare
Incannex has announced that it has entered into a lease for its first ‘psychedelic clinic’ in Melbourne, following the announcement of plans for commercializing its psychedelic-assisted psychotherapy business in March 2023. In collaboration with Australian psychedelic clinical experts, Incannex will set up these clinics through its subsidiary, Clarion Clinics Group, using psilocybin for treatment-resistant depression (TRD) and MDMA for post-traumatic stress disorder (PTSD). The first ‘model’ clinic is expected to open and take patients from September 2023. If sound operations are observed, Incannex intends rapidly to expand to larger clinics across Australia. While we recognize that this has the potential to provide a future stream of revenue for the company, we await further details before updating our valuation.
Incannex Healthcare |
On the road to psychotherapy clinics |
Operational update |
Pharma and biotech |
18 May 2023 |
Share price performance Business description
Analysts
Incannex Healthcare is a research client of Edison Investment Research Limited |
Incannex has announced that it has entered into a lease for its first ‘psychedelic clinic’ in Melbourne, following the announcement of plans for commercializing its psychedelic-assisted psychotherapy business in March 2023. In collaboration with Australian psychedelic clinical experts, Incannex will set up these clinics through its subsidiary, Clarion Clinics Group, using psilocybin for treatment-resistant depression (TRD) and MDMA for post-traumatic stress disorder (PTSD). The first ‘model’ clinic is expected to open and take patients from September 2023. If sound operations are observed, Incannex intends rapidly to expand to larger clinics across Australia. While we recognize that this has the potential to provide a future stream of revenue for the company, we await further details before updating our valuation.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/21 |
2.0 |
(8.2) |
(0.83) |
0.0 |
N/A |
N/A |
06/22 |
0.8 |
(14.9) |
(1.25) |
0.0 |
N/A |
N/A |
06/23e |
0.1 |
(20.7) |
(1.43) |
0.0 |
N/A |
N/A |
06/24e |
0.1 |
(33.4) |
(2.10) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalized, excluding amortization of acquired intangibles, exceptional items and share-based payments.
In March 2023, Incannex announced plans to commercialize its psychedelic-assisted psychotherapy business through its subsidiary, Clarion Clinics Group. Clarion Clinics Group is 84.5% owned by Psychennex Pty (Incannex’s subsidiary designed to hold all of its psychedelic-related assets) and 15.5% owned by a group of Australian psychedelic clinical experts, who have extensive experience in clinical psychedelic research, treatment and training. In May 2023, Incannex announced that it had entered into a lease for the first clinic. Fitting out and commissioning the premises in Melbourne will commence imminently and is due to be complete in August 2023.
This model clinic is planned to open and facilitate first patient treatments in September 2023, with capacity to treat c 600 patients annually in normal working hours, and c 1,000 patients in extended hours. Through Incannex’s arrangement with PharmAla Biotech, orders have been made for supplies of psylocibin for TRD patients and MDMA for PTSD patients. This is in line with Australia’s new regulations of these drugs, effective July 2023. The model clinic will serve as a commercial-scale prototype, and if sound operations are observed, Incannex plans to scale up and replicate the results in 2024, targeting more than 80 other clinics. At each step, the company will assess whether to own or license/franchise the clinics, based on speed to market, financial returns, and management capability. A long-term goal is to expand to international sites, but this will be dictated by the regulatory and competitive environment of the target geographies.
With a market estimated to be worth over A$2bn annually in Australia within three years, and with PTSD affecting 1.5% of the population at any given time and TRD affecting 1.1% of the population (according to management), this could represent a significant opportunity for Incannex. In our view, this has the potential to provide a stream of multiple revenues, based on licensing fees, product sales, clinic operations, psychotherapist training and franchising. However, Incannex must effectively execute its commercialisation strategy before this comes to fruition.
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Research: TMT
As Datatec expects to report EPS measures for FY23 that differ from FY22 by more than 20%, it has provided an update prior to reporting full FY23 results on 23 May. Reported EPS is expected to be 36.9c (FY22: 16.7c) and underlying EPS (which excludes one-off items such as the gain on the September 2022 sale of Analysys Mason) is expected to be 7.9c (FY22: 18.7c). Adjusting for exceptionally high share-based payments, underlying EPS would be 29.5c (FY22: 27.4c). We plan to update our forecasts when we have reviewed the full FY23 results.
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