Hello, thank you very much. They bring me on at these things right before the end to wake you guys up before the cocktails, okay? So, I'm Nick. I'm the Founding CEO of PharmAla Biotech. What do we do? We make MDMA, otherwise known as ecstasy, otherwise known as molly, and while it is a drug of abuse, of course, on the streets, it has also been the subject of about 30 years of clinical research. As it happens, it is the best treatment for post-traumatic stress ever developed by human beings. PharmAla is in the somewhat enviable position, I would say, of being post-revenue or commercial. We actually sell this to doctors and patients in both Canada and in Australia, where we achieve about a 70% real-world remission rate in PTSD in just three months. In three months, we are curing PTSD in 70% of cases.
We also have a large list of clients that I'll walk you guys through. Basically, you know, what is the company? What do we do? We are the world's leading manufacturer of MDMA, leading supplier of MDMA for clinical use, and we are a developer of novel chemical entities, basically molecules based on MDMA, developed off of MDMA, for which we have patents granted and which we develop into our own drugs that we will use to treat all sorts of other indications. MDMA, of course, is generic. It's been around for about 100 years, but there's a big moat, right? Because it's a controlled substance. There's a big regulatory moat. Not a lot of folks want to get into this space. We've got first-mover advantage in every single market where we sell. Potential market is pretty big.
PTSD by itself, about a, you know, CAD 260 million- CAD 1.5 billion opportunity right there. It is a condition for which there is no other treatment. Nothing else exists. PTSD is a chronic condition. A lot of people think of soldiers when they think of PTSD, but PTSD affects, you know, firefighters, it affects policemen, it affects doctors and nurses, especially coming out of the pandemic. This is a growing disorder, and the cost of treatment is very high because functionally what happens is you can't work anymore. You're on disability and that's where you stay. We give you therapy and that kind of helps, but not really. We give you maybe cannabis in some states, right? Of course, cannabis doesn't solve the problem. It just dulls you and sort of brings you down. We give you anxiolytics that do the same thing. MDMA is actually a cure.
It's a treatment that caused the PTSD to go into remission. You do not have PTSD anymore unless you retraumatize yourself. Cost of treatment, obviously very high. For us, it is remarkably low. We have now reimbursement in Australia. Medibank, the largest private health insurance company in Australia, is now providing reimbursement at one of our client clinics in the area. I spoke to some of them a little while ago. They said that, basically, if you have a PTSD patient, you're a health insurance company, you're going to pay out about AUD 30,000 per year just to maintain them, right? That's the cost of their therapy. That's the cost of their SSRIs, antidepressants, maybe their cannabis, whatever. For AUD 30,000 in three months, we cure them in 70% of cases. If you are a health insurance company, this is like a slam dunk, right?
I got maybe 30, 40 years of paying AUD 30,000 a year, or I can get this done in three months and this person goes back to work. Fantastic. Our role is, of course, as a supplier. Who do we supply to? I've talked about the patients and the doctors. That's important, of course. We always try to keep patients centered in everything we do. We don't just supply doctors. We also supply institutions. In the United States, those institutions are the U.S. Department of Veterans Affairs. That is the U.S. Military, through the Defense Health Agency. We are kicking off a clinical trial into using our MDMA to treat active duty military personnel at the University of Texas at San Antonio. It's starting early next year. I would say a relatively enviable client list of major universities, basically every single big university that does research.
Johns Hopkins University, Yale University, Harvard University, you name it, we supply them. That gives us a lot of momentum in this space, right? Because not only do we have the ability to sell to them and we do make money, we also sometimes enter the data sharing agreements with them. We get the clinical trial results very, very cost-effectively while still making money. As I said, in Canada and Australia, we actually supply patients. Just a few weeks ago, we announced that we had signed a distributor in New Zealand. That market is opening up in the next six months. We have now a distributor in Europe, Duchesse Pharma in the Netherlands, where the Dutch and the Swiss markets are opening imminently, as is the Czech market, small market, but still a nice one.
This is, you are seeing the beginnings of a rolling wave of regulatory change, where this drug class is basically being approved by regulators, bit by bit by bit, country by country. Now, what about the new drugs, right? You know, our mantra is basically good MDMA today, better MDMA tomorrow. How do we find new molecules? We started with the base MDMA molecule and we've actually developed our own AI tool, based on a QSAR model. Basically, we model the molecules in cyberspace, and how they bind to various receptors, dopamine receptors, serotonin receptors. Then we model how we're going to make them in the lab. Then we actually test them. We have a rodent lab at the University of Arkansas for Medical Sciences. What does that lead to? That leads to very, very good data going into our patents. That allows us to patent new drugs.
Now, making MDMA is great. Selling MDMA is great. Patents are better, because once you've proven out your use case, you can sell those to pharma at quite a good multiple. On our manufactured drug products, we've got about two years of 100% growth. We've got about 90% margins. If we can sell one of our patents to big pharma for CAD 50 million- CAD 100 million, that's quite a bit better, right? That does require a little bit of R&D work and development. We do a lot of that work in Arkansas, as I said, also in Australia. We're again, very, very efficient. We've got a 43% rebate on all of our expenditures. Thank you, Australia, as well as a very streamlined regulatory system. LaNeo MDMA is our generic MDMA product. That's what we sell today. ALA-002, basically it's like MDMA, but it's safer.
We are investigating that phase two for social anxiety. APA-01 is a drug we've developed for the treatment of neurological disorders, post-stroke recovery, and traumatic brain injury. As we go, we're getting further away from the psychiatric disorders and into the CNS, central nervous system disorders. I won't bore you with the data, but we got a lot of it. You know, part of the benefit of working with basically every single major research institution is you get access to some of the best researchers in the world who focus on this stuff. We've managed to achieve great results with ALA-002 in that we've reduced all the negative side effects of MDMA. You know, blood pressure, cardiac toxicity, thermoregulation. MDMA is already not addictive, so we didn't have to worry about that. For APA-01, this is a neuroplastic agent.
It actually causes the brain to start regrowing those neuronal connections, something that regular MDMA doesn't do, while also calming you, making you amenable to therapy, basically improving your quality of life all in, while creating those new neuronal connections, basically regrowing the damaged parts of the brain. We've got a killer team from all over the place. I'll take an opportunity to tell you guys a little bit about myself. I started my career in the Canadian government, after which I worked at a number of blue chips, you know, Red Bull, GE, and JUUL. I started this because I'm the kind of guy who, you know, I read medical journals for fun. I started seeing this wave of research coming in, showing just remarkable, remarkable results. I saw that nobody was supplying this market.
As I said, we decided we're going to make good MDMA today, better MDMA tomorrow, and we're well on our way. Thank you very much. I'll happily take any questions.
Anybody from the audience before we get started?
Hi, thank you for the presentation. If someone gets cured in 90 days, do they go off the medication completely?
Yeah. Yeah. Actually, the way the protocol works is you only actually get the drug three times. It's a drug-assisted therapy protocol. You don't take the drug home with you. It's not once a day. It's not like an antidepressant. What happens is you go into the therapist's office, they give you the pill when you walk through the door, you take it, and then you go through therapy as you normally would, although it's a longer session. Probably going to be in there for quite a while. It's like, you know, it's a four to six-hour period. By the time you leave, the drug's actually worn off. This is one of the big concerns that people have, like, oh, you're going to flood the streets with MDMA. We're actually not, right? The drug stays with the therapist. It's actually not the drug that makes you better.
It's the therapy that makes you better, but the drug makes the therapy work.
Have you been looking at drugs for mental illness like schizophrenia or other mental, because that would be a big...
Yeah, a big market. There is actually, we are doing a clinical trial at UCLA, looking at MDMA for schizophrenia. It is not our focus. Our focus is, you know, anxiety disorders. Basically fear disorders, anxiety disorders, all part of one sort of bucket. Then of course, you know, CNS disorders, brain damage, brain trauma.
Thank you.
I have a question. What do you mean by reduced toxicity on the heart? Because I saw that new molecule, you essentially said like it's the same thing as MDMA, except the reduced toxicity. How did you make that work? How does that work?
Yeah. One of the downsides of MDMA, it's actually a remarkably safe drug in many ways, but the one downside is it is a little bit hard on the heart. In a lot of the clinical trials, they've excluded anyone over the age of 65 because anyone over 65 most likely has some cardiac stuff, some vascular stuff. What we discovered is, I mean, I can get into the science afterwards. I won't bore these nice folks with it. Basically, we found a way to reduce the cardiotoxicity of the drug while keeping the beneficial effects. We did that, we discovered that through preclinical testing. We dosed a whole bunch of rodents with MDMA and then our novel analog and we compared it. I'm guessing they're like the happiest mice on the planet, but I've never met them myself. Any other questions? Yeah, yeah, yeah. I'll take those backwards, right?
Not every clinic is obviously different, but one of the things that we try to enforce on our clinic customers is that they do 6, 9, and 12-month follow-ups. That's how we know it doesn't come back. The way that we test this is the same, it's the generally accepted scales for PTSD that every psychiatrist uses for their patient. The PARS 12, I believe, is the scale. We didn't invent the measures. These are generally accepted psychiatric measures for the intensity and severity of PTSD. Oh, and I should say, I didn't even talk about this, but we do trade on OTCQB and we are listed on the Canadian Securities Exchange. Thank you to both. Actually, in 2023, we were the number one growth stock in Canada.
Why have you focused on MDMA sales only and not developing novel molecules like the peers out there?
I mean, look, we are developing novel molecules, but what we decided early on was that there's a lot of win in getting to patients. Like, there's a lot of companies out there, and, you know, I'm sure you guys know them. There's a lot of folks in biotech who do this, like, listen, I'm going to need CAD 500 million to develop a new technology. And then, you know, after we've developed it, then we're going to commercialize it. The day that you get regulatory approval for your drug is actually just the first day of the rest of your life. You got to sell this shit afterwards. We decided early on that we wanted to have not just development expertise, but commercialization expertise. Because, like, just getting it onto the market is not actually a company. That's just like you're an R&D division, right?
We wanted to make a company.
What are the barriers to entry for others doing what you're doing? I assume you have a patent portfolio of size, but.
Yeah. Look, we have the patent portfolio. We have the unpatented IP, the trade secrets that we don't patent because we don't want anybody to know what the secret sauce is. There are also all these regulatory hurdles. If you want to make a new drug, and I don't care what the drug is, you want to make ketamine, which is a WHO 100 essential medicines drug that every country has in its portfolio, you're going to have to spend about a year and a half to two years doing the development work, the stability studies, scaling your manufacturing. It all takes time and energy. In our case, it's also a controlled substance, so not everybody can do it. That combination of the advanced work that we do, we kind of took a leap, right?
We didn't know for sure there would be a market for this, and then we jumped in and now there is. That was good. Anybody else now chasing us, they have to go through all, jump through all the hoops that we did. In their best case scenario, they're just going to split the market with us. I think that first-mover advantage combined with the regulatory hurdles, the moat that we have, I think it's actually pretty good. I think it keeps us pretty immune.
Who do you think the key competitors are?
Okay. So look, there's a company here in the U.S. called Lykos Therapeutics. They're like OpenAI. They're like a spin-off of a charity, and the charity funded a lot of this basic research that we've relied on. They've gone through some troubles. We have this very weird relationship with them where they sometimes view us as a competitor, but sometimes they send us customers. I don't know. They're definitely one. There's a couple of groups in Australia who, year in, year out, keep promising they're going to start competing with us. If and when they get up and running, I'll let you know.
You mentioned that the drug is not addictive. As you think about some of the patients coming out of trials or actually therapy or treatment, how often do you see them turn to recreational?
Look, let's be blunt here, guys. If I walk out of this place tonight, it's Wednesday, so I might have some trouble, but on a Thursday or Friday, I'm going to probably walk into any nightclub in the city and probably get some MDMA for AUD 5 within 20 minutes. It's not actually hard to get MDMA. My MDMA costs a hell of a lot more than CAD 5. I'm not competitive with the drug dealers because I have to charge a lot more. I make mine in a real licensed facility. I think the ship has sailed on recreational MDMA. I don't actually support its use in a recreational context. In a clinical setting, I think it's hugely valuable. I think we'd be silly to sort of leave this tool on the table just because it has some abuse potential in the streets.
Opioids are obviously terrible when abused, but if I'm having, like, if I'm getting knee replacement surgery, I'm probably going to want some opioids to numb the pain, right? They have their place.
Great.
Any more questions from the audience? Okay, thanks so much.
Thanks very much, guys.