Numinus Wellness Inc. (TSX:NUMI, OTC:LKYSF) said it has completed the acquisition of Novamind Inc (CSE:NM) following the latter's receipt of a final order from the British Columbia Supreme Court.
Numinus said the acquisition has positioned the company as a leading integrated mental wellness company providing ketamine- and psychedelic-assisted therapies, with 13 wellness clinics, four clinical research facilities, and a dedicated psychedelics research lab.
"This acquisition elevates our collective service offering, and we look forward to helping an even greater number of people access effective and safe treatments to support mental wellness," said Payton Nyquvest, founder and CEO of Numinus, in a statement.
READ: Numinus Wellness says shareholders have approved resolution in connection with the proposed acquisition of Novamind
Numinus said the acquisition will grow its client service offerings, geographic reach, and revenues significantly, and provide Numinus and Novamind clients access to a greater variety of services and treatments over the coming months, including the expansion of virtual therapy services at US-based clinics and increased group therapy offerings in Canada.
The transaction has also provided a strong potential for partnerships in the US and acquisition opportunities, it said, adding that on a proforma basis, the combined business generated C$11.9 million of annual revenues (trailing four quarters reported, as at June 10, 2022).
"We warmly welcome the Novamind team to Numinus and believe our shared values and focus on client service will ensure a seamless integration as we continue to grow as one unified company," said CEO Nyquvest.
Executive appointments
In conjunction with the acquisition, Numinus said Dr Reid Robison (MD) and Dr Paul Thielking (MD) have joined the company as chief clinical officer and chief science officer, respectively. Robison was most recently chief medical officer at Novamind and Thielking, chief scientific officer.
Robison is a board-certified psychiatrist and co-founder of Cedar Psychiatry and serves as the medical director for the Center for Change, a leading center for the treatment of eating disorders, Numinus noted. He was previously a coordinating investigator for a study on MDMA-assisted therapy for eating disorders, sponsored by the Multidisciplinary Association for Psychedelic Studies (MAPS).
As an early adopter and researcher of the use of ketamine in psychiatry, Robison also led a pivotal intravenous ketamine study for treatment-resistant depression by Janssen, leading up to that company's recent FDA-approval of Spravato. To date, Robison has guided thousands of ketamine-assisted therapy sessions and hundreds of Spravato dosing sessions. He is also an adjunct professor at both the University of Utah and Brigham Young University, the company said.
Thielking is board certified in psychiatry, hospice and palliative medicine, and integrative medicine. He is the principal investigator for a psilocybin-enhanced group psychotherapy intervention for cancer patients with depression and a co-investigator on a study for ketamine-assisted psychotherapy for opioid use disorder. He has extensive experience in creating group therapy interventions for patients with serious illnesses and has successfully integrated ketamine-assisted psychotherapy services within an academic outpatient oncology clinic for cancer patients with depression.
“Dr Thielking was director of psycho-oncology at the University of Utah Huntsman Cancer Institute for five years and previously an associate professor in the department of psychiatry at the University of Utah,” Numinus said, adding that he is a graduate of the California Institute of Integrative Studies' Certification of Psychedelic Therapy and Research program.
Numinus also said Michael Tan has been promoted to president and chief operating officer to reflect his growing responsibilities. In his new role, Tan will oversee all company operations and will lead strategic directives to drive revenue growth through future footprint and product line expansions. Tan, who joined the company in 2019, has been instrumental in Numinus' growth, the company said.
As a result of the increased medical and research expertise added to Numinus' expanded executive team, chief medical officer Dr Evan Wood will continue in his role in a reduced capacity in order to enable him to maintain his important advocacy, clinical and teaching work, the company added.
Integration of operations and new share issues
Numinus said it is reviewing previously announced organic clinic growth plans as it intends to continue operating 13 wellness clinics across North America, four clinical research sites and dedicated psychedelics research laboratory that come with the acquisition.
Clinics in Utah and Arizona will continue to operate under existing branding until later this year, at which point all locations will be rebranded to reflect the Numinus brand, it added.
Meanwhile, Numinus said it has issued 43,474,659 common shares to the former shareholders and restricted share unit (RSU) holders of Novamind, as consideration for the acquisition, representing 0.84 of one Numinus common share per each Novamind share and Novamind RSU.
In addition, all 3,346,052 incentive stock options of Novamind were canceled and replaced at the exchange ratio through the issuance of 2,810,684 incentive stock options of Numinus (Replacement Options) with each Replacement Option being exercisable to acquire one common share of Numinus (Common Share), and of which (i) 2,453,684 Replacement Options are exercisable at a price of approximately $0.4762 per Common Share until December 11, 2025, (ii) 252,000 Replacement Options are exercisable at a price of approximately $1.1905 per Common Share until December 22, 2025, and (iii) 105,000 Replacement Options are exercisable at a price of approximately $0.4762 per Common Share until April 30, 2025.
All 19,044,831 outstanding warrants of Novamind have been adjusted in accordance with their respective contractual terms and will be exercisable at the exchange ratio to acquire 15,997,658 Common Shares, it added.
Numinus also said it has agreed to pay $700,000 (Completion Fee) to Eight Capital, the financial advisor in the deal, of which $200,000 is to be paid in shares valued at $0.45 each, being 444,444 shares (Completion Fee Shares), with the balance of the completion fee to be paid in cash.
The issuance of the Completion Fee Shares is subject to approval from the Toronto Stock Exchange, and will be subject to resale restrictions expiring four months and one day from the date of issuance in accordance with applicable securities laws, it added.
Contact the author at jon.hopkins@proactiveinvestors.com