Field Trip Health Ltd. Reports Second Fiscal Quarter 2022 Financial Results and Provides Business Update

Field Trip Health Ltd. (NASDAQ: FTRP), a leader in the development and delivery of psychedelic therapies, reported its second fiscal quarter 2022 results for the three months ended September 30, 2021 and provided a business update. All results are reported under International Financial Reporting Standards (“IFRS“) and in Canadian dollars, unless otherwise specified.

Key Highlights and Recent Developments

During the quarter, Field Trip progressed its strategy of building a leading psychedelic therapy company (Field Trip Health) and continued to invest in its drug development pipeline and program expansion (Field Trip Discovery).

FT-104

During the quarter, it was announced that the lead indications for FT-104, Field Trip’s lead novel psychedelic compound in development (patent pending), will be Treatment Resistant Depression and Postpartum Depression. FT-104 is a novel, synthetic 5HT2A receptor agonist compound. It is currently advancing through preclinical studies with the in vivo portion completed, and final results from safety pharmacology and GLP toxicology are expected in calendar Q4 2021. To date, GLP toxicology, cardiovascular, pulmonary, and neurological safety pharmacology studies, as well as genotoxicity potential, all continue to be encouraging. In addition, final manufacturing of clinical trial material is scheduled for production to enable FT-104 to move into Phase 1 clinical trials in the first half of calendar 2022. The Company has experienced, and may continue to experience, delays in initiating Phase 1 clinical trials due to the ongoing COVID pandemic and delays at its contract manufacturing organization.

FT-200 Group: Introducing Field Trip’s Second Novel Psychedelic Program

The Company also announced the discovery of a novel molecule that, based on in vivo assay details, has the structure of classical psychedelics and has demonstrated improved selectivity for the target serotonin 2A receptor (5HT2A) relative to FT-104 and psilocybin versus off target serotonin, 5HT1A, 5HT2B and 5HT2C receptors. This is meaningful because off-target 5HT2B activity has been associated with increased risk of cardiovascular toxicity. Based on this discovery, the Company is expanding the scope of its development pipeline to focus on a new group of molecules termed the FT-200 Group, (which includes the molecule mentioned above), that have the structure of classical psychedelics, with similar potency at the 5HT2A receptor as FT-104 and psilocybin, but with reduced or the absence of activity at the off-target 5HT2B receptor. The aim of the work is that by reducing or eliminating 5HT2B activity it may allow molecules like those in the FT-200 Group to be administered more frequently, such as more chronic or chronic intermittent administration or ‘microdosing’ strategies.

On October 29, 2021 the Company filed a provisional patent application in the United States to protect the composition, as well as potential formulations and uses of the first molecule in the FT-200 group.

Leveraging the growing awareness of Field Trip’s psychedelic-assisted therapy clinics, Field Trip announced on August 31, 2021 the launch of the KAP Co-operative Program (“KAP Co-op”), a program that enables eligible independent psychedelic therapists to provide ketamine-assisted psychotherapy (and, in the future, other legal, psychedelic-assisted therapies) at its Field Trip Health Centres. Field Trip also announced the launch of training programs designed to provide interested psychotherapists or other qualified mental health professionals and clinicians with access to best-in-class training on KAP.

The Company continues to invest in its clinics and during the quarter, entered into lease agreements for locations in Dallas, TX, Miami, FL and Scottsdale, AZ. Subsequent to the quarter end, the Company announced the opening of the Seattle, WA clinic, its sixth in the United States and ninth overall, along with the recent opening of a location in Fredericton, NB, and the imminent opening of a location in Vancouver, BC.

Hannan Fleiman, Field Trip’s Co-Founder and President, said, “We continue to see strong growth in our clinic business and our team is proud of the outcomes we are helping our patients achieve. We have continued to make significant investments in building out the leading platform for the delivery of psychedelic therapies and to position our clinics to be at the absolute forefront of our industry in establishing the critical infrastructure for the current and emerging psychedelic therapies with 9 clinics now in operation and 9 locations under construction or about to commence construction. Importantly, the clinics enable Field Trip to capture significant amounts of patient data on clinical outcomes which we expect to help inform future clinical development and treatment strategies.”

From a brand perspective, Field Trip continues to be a globally recognized company in the industry. During the quarter, the Company was featured in many top-tier print and broadcast media outlets, including Forbes, Vox Media, Insider, People and others, generating nearly 2 billion total potential media impressions. Field Trip’s brand presence and reach continues to generate strong website traffic and patient interest in the KAP treatments offered by the Company.

On July 29, 2021, Field Trip’s Common Shares commenced trading on the NASDAQ Global Select Market (“NASDAQ”) under the ticker symbol “FTRP”, providing the Company with greater access to capital. The Common Shares continue to trade in Canada on the TSX under its current symbol FTRP. Concurrent with the NASDAQ listing, Field Trip’s Common Shares ceased to be quoted on the OTCQX. The Company previously completed the process to ensure its shares are eligible for electronic clearing and settlement through the Depository Trust Company (DTC). In addition, Ronan Levy and Ellen Lubman joined the Compensation Committee and Mujeeb Jafferi and Dr. Ryan Yermus resigned as directors of the Company. Mr. Jafferi and Dr. Yermus continue to serve as Field Trip’s Chief Operating Officer and Chief Clinical Officer, respectively.

Mr. del Moral, continued, “The milestone of listing on NASDAQ during the quarter was testament to the rapid progress we have made and increased our visibility in the marketplace, improving trading liquidity and ultimately enhancing long term shareholder value as we further strengthen our leadership position in the psychedelic medicine industry.”

The Company has commenced a strategic review designed to ensure that each operating unit is best positioned, optimally resourced, and focused to provide maximum long-term value to all stakeholders.

Mr. Joseph del Moral, said, “With the FT-104 nearing the clinic, the expansion of discovery efforts around our FT-200 Group, and the growing number of opportunities for Field Trip Health Centers we believe it is the correct time to review all strategic options to ensure we continue to maximize the growth potential and value of each business unit.”

The Company has engaged Bloom Burton Securities Inc. as its financial advisor in connection with the strategic review.

For the second fiscal quarter ended September 30, 2021, the Company earned patient services revenues of $907,816 from its Toronto, New York, Santa Monica, Chicago, Atlanta, Houston and Amsterdam clinics, an increase of $813,284 or 860% over the comparative quarter ended September 30, 2020 of $94,532 and an increase of $40,416 or 5% over the prior fiscal first quarter. The Amsterdam clinic began generating revenues in September 2021. Second fiscal quarter 2021 patient services revenues were generated from only two clinics, Toronto and New York. The modest quarter over quarter revenue increase was in part due to the COVID-19 Delta variant and seasonality associated with the slower summer months. Revenues in the first part of the third quarter indicate a clear upward trend as a result of recent process optimizations to accelerate patient on-boarding and increase clinic capacity.

Net loss for the second fiscal quarter of $13,019,280 was primarily due to total operating costs of $15,638,596, of which $2,055,890 was related to non-cash share-based compensation and $848,712 was related to non-cash depreciation and amortization. This was partially offset by a foreign exchange gain of $1,856,088. This compares with a net loss of $3,932,444 in the second fiscal quarter of 2021. The increase from the prior year primarily reflects the Company’s focus on growing the business and continued investment in its drug development pipeline and best-in-class clinic infrastructure. As the Company continues to scale, it is optimizing and streamlining the development of its psychedelic-assisted therapies.

Total operating costs in the second fiscal quarter were $15,638,596 and were comprised of the following: general and administration expenses of $8,917,717, research and development expenses of $2,102,787, patient services expenses of $1,917,451, sales and marketing expenses of $1,315,434, depreciation and amortization of $848,712 and occupancy costs of $536,495. This compares with total operating costs of $3,810,177 in the second fiscal quarter of 2021.

The difference in general and administrative expenses in the second fiscal quarter also included $596,055 in non-recurring expenses primarily related to the NASDAQ uplisting, $1,330,847 in recurring public company costs as well as non-cash share-based payments of $1,380,398.

As of September 30, 2021 Field Trip had unrestricted cash and cash equivalents, funds held in trust and short-term investments of $87,526,034.