Announcement PDF CARE DELIVERY Patient Impact Treated over 10,000 Patients Expanded Mental Health Footprint Ready For MDMA-Assisted Therapy DRUG DEVELOPMENT Grew Novel MDMA Analogue Library Advanced Ultra-Pure CBD Capsules Secured First Commercial Partner Annual Report 2022 - 2023 2023 WE ARE A clinical-stage biotech accelerating treatment development for unmet neuroscience and mental health needs. We are... A clinical-stage biotech accelerating treatment development for unmet medical needs. CONTACT INFORMATION Michael Winlo mwinlo@emyria.com Investors investors@emyria.com Media media@emyria.com General info@emyria.com EMYRIA INVESTOR HUB We invite you to get involved in our Investor Hub where you can interact with our news and updates as well as ask direct questions of the Emyria team. ASX:EMD ABN 96 625 085 734 emyria.com Scan to sign up today Contents Letter From the Chairman 05 Emyria - 2023 Key Milestones 06 Directors Report 09 Consolidated Statement of Profit or Loss and Other Comprehensive Income 29 Consolidated Statement of Financial Position 30 Consolidated Statement of Changes in Equity 31 Consolidated Statement of Cash Flows 32 Notes to the Consolidated Financial Statements 33 Directors’ Declaration 65 Auditors’ Declaration 66 Independent Auditor’s Report 67 ASX Additional Information 71 Corporate Governance 74 Corporate Directory 74 4 E MYRIA AN NUA L R EPO RT 20 23 Creating tomorrow’s therapies from today’s patient stories LETTER FROM THE CHAIRMAN I am proud to present our Annual Report for 2023 and recap our year of accomplishments. Guided by our foundational 3D model of Care Delivery, Data Collection, and Drug Development, we’ve made substantial progress in our drug development programs and responded to unique regulatory shifts in Australia by significantly expanding our footprint in mental health. CARE DELIVERY | Scalable Models & Partnerships The Therapeutic Goods Administration’s rescheduling of MDMA and psilocybin in February 2023 encouraged us to expand our care delivery capabilities. Our acquisition of leading psychological trauma specialists - the Pax Centre - positions us to build a thriving, multidisciplinary clinical service uniquely prepared to provide and evaluate psychedelic-assisted therapies. Dr. Ben Sessa, a global leader in the field, trained our initial team of 20 clinicians, and we are now positioned to lead in both the delivery and development of these promising new treatments. DATA COLLECTION | Real-World Data & Strategic Research Partnerships Our wholly-owned clinical service subsidiaries have been instrumental in gathering Real-World Data, thereby informing our drug development strategies and care programs. We also established collaborations and partnerships with several leading institutions, such as the Institute of Respiratory Health and PsychoGenics, to support our MDMA analogue program. Emyria’s high-potency Ultra-Pure Cannabinoid assets were also accepted into the NIH HEAL Initiative® and the NINDS Preclinical Screening Platform for Pain (PSPP) program, underscoring our approach’s credibility and opening the door for future global collaborations. to over 140 compounds on the innovation front, fortifying our pipeline for developing neuropsychiatric disorder treatments. Financial & Operational Milestones We also managed to increase our clinical service revenues while reducing our operating costs, which, combined with our successful capital raises, positioned us well to deliver on our ambitious programs. In closing, I must express how excited we are about the year ahead. Psychedelic-assisted therapy stands as one of the most promising new frontiers in healthcare. What’s needed now is responsible leadership to guide these therapies into mainstream acceptance and clinical practice safely. Emyria is exceptionally wellpositioned to fulfil this role—providing integrated and controlled access to these revolutionary treatments while simultaneously collecting robust clinical data that will inform future advancements. Thank you for your continued trust and investment in Emyria. We are poised for a breakthrough year, and your support is crucial in making this a reality. DRUG DEVELOPMENT | Clinical Trials & Licensing This year, we gained Human Research Ethics Committee approval for Phase 3 clinical trials of our Ultra-Pure CBD capsule, EMD-RX5, targeting stress and anxiety. Despite recruitment delays in July, our resolve remains unshaken. Moreover, our exclusive licensing agreement with Aspen Pharmacare Australia in April 2023 could lead to significant revenue streams. We expanded our MDMA-Analogue Library Dr Stewart Washer Emyria Chairman 6 E MYRIA AN NUA L R EPO RT 20 23 2022-2023 KEY MILESTONES Phase 3 Clinical Trials In August 2022, Emyria received Human Research Ethics Committee approval to commence a pivotal Phase 3 clinical trial for EMD-RX5, an Ultra-Pure CBD capsule seeking registration as an over-the-counter treatment for stress and anxiety. By January 2023, recruitment and dosing had commenced. In July 2023, recruitment slowed while the Group navigates an issue with a single batch of drug product with its Contract Drug Manufacturing Organisation (CDMO). Licensing and Commercialisation Strategic Partnerships for Research Partnering with the Institute of Respiratory Health and a leading neuroscience Contract Research Organisation (CRO) PsychoGenics demonstrates a multi-disciplinary approach. PsychoGenics will use its SmartCube™ technology to screen potential compounds for neuropsychiatric indications, thereby de-risking R&D investment. International Recognition Emyria was accepted into the NIH HEAL Initiative® National Institute of Neurological Disorders and Stroke (NINDS) Preclinical Screening Platform for Pain (PSPP) program. Being recognised by a leading funder of neurological research in the USA is both a validation of Emyria’s scientific credibility and an open door to future collaborative opportunities. Legal and Regulatory Shifts In April 2023, Emyria signed an exclusive licensing agreement with Aspen Pharmacare Australia, potentially leading to significant revenue streams through a royalty of up to 10% on annual net sales and additional milestone payments. In February 2023, the Therapeutic Goods Administration (TGA) rescheduled MDMA and psilocybin, benefiting Emyria’s expansion of its MDMAassisted therapy programs. Expanding MDMA-Analogue Library By March 2023, the company entered a partnership with trauma specialists at the PAX Centre to develop a scalable MDMA-assisted therapy model. This operational scaling is vital for translating research findings into real-world applications. Over a few months, Emyria expanded its proprietary library of neurologically active compounds inspired by MDMA to over 140. This sets the stage for a pipeline of promising treatments for neuropsychiatric disorders. Operational Expansions and Partnerships EMYRIA’S MDMA ANALOGUE LIBRARY Expands to over 140 with 7 E MYRIA AN NUA L R EPO RT 20 23 PSYCHEDELIC-ASSISTED THERAPY Training with Dr Ben Sessa Expansion into PTSD and Therapist Training In June 2023, Emyria received approval for a novel MDMA-assisted therapy trial for PTSD and acquired The Pax Centre (completion expected in Q1 FY24). Dr. Ben Sessa, a leading researcher in the field, trained an initial team of 20 Emyria-affiliated therapists, adding credibility and expertise to the operational team. Images: Capital for Advanced Therapies In November 2022, Emyria secured a $3 million placement cornerstoned by Tenmile and Sixty Two Capital. By January 2023, Emyria received a cash refund of over $2 million via the Australian Government’s R&D Tax Incentive. In May 2023, Emyria secured $2.5 million in placement to support the delivery of MDMA and psilocybin-assisted therapies and its pioneering drug discovery program. Pg. 6 UWA Researcher Dr Glenn Pullella working on Emyria’s Program “New Drug Discovery” in partnership with UWA Pg. 7 Psychedelic-Assisted Therapy, Therapist Training with Dr Ben Sessa at The Pax Centre 8 E MYRIA AN NUA L R EPO RT 20 23 We’ve developed a clear strategy for value creation, with a focus on three key areas Care Delivery Data Collection Drug Development 9 DIRECTORS’ REPORT CO MPANY SN AP SH OT The directors present their report for Emyria Limited (“Emyria” or “the Company”) and its subsidiaries (“the Group”) for the financial year ended 30 June 2023. Directors The names of the directors in office at any time during or since the end of the year ended are: Dr Stewart Washer Executive Chairman Dr Michael Winlo Managing Director Professor Dr Alistair Vickery Executive Medical Director Dr Karen Smith Executive Director Mr Matthew Callahan Non-Executive Director (resigned 21 August 2023) Professor Sir John Tooke Non-Executive Director Dr Mohit Kaushal Non-Executive Director (appointed 21 August 2023) Review of operations The principal continuing activity of the Group is developing biopharmaceuticals guided by Real-World Data collected with patients across its wholly-owned clinical service subsidiaries. Significant changes in state of affairs During the reporting period, the Group’s principal activity has been the development of biopharmaceuticals, specifically novel MDMA analogues and Ultra-Pure CBD capsules, informed by Real-World Data gathered from patients across its wholly-owned clinical service subsidiaries. The Group has strategically concentrated on advancing the development and commercialisation of these proprietary medicines, while simultaneously launching its MDMA-assisted therapy program to broaden its impact in the mental healthcare sector. Benefiting from its extensive experience in collecting data while working with newly rescheduled medicines, the Group responded strategically to pivotal regulatory changes allowing MDMA and psilocybin to be prescribed as legal medicines in Australia from July 1, 2023. The Group is poised to become a leader in the evolving field of psychedelicassisted therapies. 2022 -2023 Key Milestones See pages 6-7 of the Annual report Events after reporting date On 21 August 2023, the Company announced a strategic change in Emyria’s Board of Directors. Matthew Callahan, Founder and Non-Executive Director, resigned to focus on other endeavours but has agreed to continue providing legal, IP, and investment advisory support to Emyria. The Group was pleased to appoint Dr. Mohit Kaushal as a non-Executive Director. Dr. Kaushal has an extensive background in clinical transformation, digital health, and strategic investments. Dr. Kaushal’s expertise aligns with Emyria’s vision for future growth and innovation in mental health care. On 4 September 2023, the Company announced that it had secured bids for a placement of $2m (before costs). The Placement comprises the issue of approximately 26,666,667 fully paid ordinary shares at $0.075 each (“Placement Shares”) representing a 6.25% discount to the last traded price as at 30 August 2023. In addition, the Placement includes 1 free attaching unquoted option for every 2 shares applied for and issued under the Placement (“Placement Options”). 10 E MYRIA AN NUA L R EPO RT 20 23 Directors’ Report The Placement Options will be exercisable at $0.12 each and expire 3 years from the date of issue. On 5 September 2023, the Company announced that 19,217,144 options expired on 28 April 2023. On 6 September 2023, the Company announced a non-renounceable entitlement issue of 1 new share for every 7.5 existing shares held at an issue price of $0.075 per new share to raise approximately $3.1m (before costs) together with 1 free attaching option for every 2 new shares applied for and issued. On 13 September 2023, the Company announced that it completed its acquisition of Mind Body Consulting Pty Ltd trading as the Pax Centre. The strategic acquisition was valued at $1.7m and executed through a combination of shares and cash. 10,236,220 shares were issued with a value of $1.3m. The balance is to be paid in cash. On 13 September 2023, the Company also announced the issue of 25,000,000 shares, of which 20,000,000 were issued under tranche one of the placement announced on 4 September and 5,000,000 shares at a deemed issue price of $0.075 each to StocksDigital in part consideration for the provision of investor relations services. There are no other matters or circumstances that have arisen since the end of the financial year which have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods. Future development, prospects and business strategy The Group plans to continue its pioneering work in the healthcare landscape by integrating its core competencies in patient treatment, clinical data capture, and drug development. We aim to become industry leaders in delivering and developing promising, proprietary neuropsychiatric treatments. A key short-term focus will be the integration and value optimisation of our clinical services, particularly following the acquisition of the leading multidisciplinary traumainformed mental health service, the Pax Centre. This strategic acquisition positions us to significantly advance the provision of wraparound mental health care, particularly psychedelic-assisted therapies, and increase clinical billing revenues. Concurrently, the Group is laying the groundwork for robust data capture across it’s broadened clinical service activities to inform and accelerate future drug and therapy development. The Group will continue to advance its novel MDMA analogues and Ultra-Pure CBD capsules. Business risks Access to Capital: Emyria’s business model necessitates ongoing investment in clinical trials and other areas of research and development. While we anticipate generating revenue from our clinical services, these earnings may not be sufficient to cover the full scope of business expenses and required investments. As such, Emyria will continue to depend on external financing through equity or debt to sustain the business, including our Phase 3 clinical trials. Any limitations on our ability to secure the necessary funding could adversely impact our operational sustainability and delay our path to profitability. Clinical trials: Clinical trials inherently come with elements of risk, including the potential for negative, inconclusive, or non-efficacious results. These factors can significantly impact the commercial potential and profitability of our Ultra-Pure CBD capsules (EMD-RX5, EMD-RX7, and EMD-RX9) and proprietary MDMA analogues. The enrolment of patients into trials is susceptible to delays due to various challenges such as the supply chain disruptions, economic downturns, and difficulties in hiring qualified staff. Regulatory approvals, importation, and customs requirements can further delay the progression of clinical trials. Data obtained from clinical trials can also be interpreted differently by different stakeholders, including regulatory authorities. This could potentially delay, limit, or prevent the receipt of regulatory approvals. Moreover, Phase 3 clinical trial data may not necessarily be indicative of the results obtained upon completion or in future stages. Interpreting masked data is subject to further analysis once unmasked, and negative outcomes at any stage could inhibit further development, limit commercial potential, or impede marketing approval. Lastly, our Ultra-Pure CBD capsules and MDMA analogues are subject to stringent safety and efficacy assessments. Failure to demonstrate a strong safety profile or sufficient therapeutic efficacy in future clinical studies could hinder their ongoing clinical development and market release. Delays in patient recruitment or challenges in securing clinical locations may also impact the timeline of our clinical programs. 11 E MYRIA AN NUA L R EPO RT 20 23 Clinical Data: Emyria holds sensitive clinical data that is susceptible to cybersecurity risks, including potential attacks or breaches from both internal and external parties. These breaches could occur whether access to the data is authorised or unauthorised. Consequently, there’s a risk that sensitive information may be publicly exposed or permanently lost. Any such cybersecurity attack or data breach could impact Emyria’s compliance with relevant data protection or privacy legislation. Non-compliance with such legislation could lead to penalties, attract negative publicity, and adversely affect the company’s brand and reputation. Research and Development: The future success of Emyria is closely tied to the outcomes of clinical trials for our Ultra-Pure CBD capsules (EMD-RX5, EMD-RX7, and EMD-RX9) as well as our proprietary MDMA analogues, and their eventual approval as safe and effective treatments. These products are currently in various stages of clinical development, and the possibility of commercialisation, which would generate sales and revenue, remains uncertain and potentially years away. Continued progress requires further research and development, including ongoing evaluation of safety and efficacy in clinical trials, followed by regulatory approval prior to marketing authorisation. Drug development is an inherently high-risk endeavour. Until Emyria can provide further clinical evidence supporting the efficacy of its treatments in improving patient outcomes, the success of these products remains speculative. Risks associated with research and development include, but are not limited to, uncertain outcomes, delays in development, and general scientific uncertainties surrounding the development of novel pharmaceutical products. Materialisation of any of these risks could significantly impede Emyria’s progress and adversely affect its future financial performance. Patient Safety in Clinical Services: Emyria provides comprehensive clinical care to patients with severe mental health issues, including the provision of experimental treatments such as psychedelicassisted therapy. The vulnerable nature of this patient population elevates the importance of maintaining stringent safety protocols. There is an inherent risk associated with any medical intervention and thorough patient evaluations and informed consent are crucial. Despite these precautions, there can be no assurance that adverse events will not occur. Such events could have legal repercussions, attract negative publicity, and harm Emyria’s brand and financial standing. Ensuring the competence and suitability of clinicians is crucial. All clinicians must be rigorously vetted, trained in the specialised treatments offered, and supervised to maintain the highest standards of care. Failure to adequately vet and train clinicians could result in suboptimal treatment outcomes and potentially, legal ramifications. Regulatory Approval: Emyria operates in a highly regulated sector concerning the manufacture, distribution, and supply of pharmaceutical products as well as the use of experimental treatments like psychedelic-assisted therapies. Achieving and maintaining the necessary approvals, licences, and registrations from relevant regulatory authorities across various jurisdictions is not guaranteed. There may be instances where agencies like the Therapeutic Goods Administration (TGA) or Food and Drug Administration (FDA) identify deficiencies requiring resolution or request additional studies or approvals beyond what is currently planned. This could result in delays and increased costs for our clinical trials as well as our care programs. Emyria also faces the risk of policy, regulation, and legislative changes in all jurisdictions where it operates. Failure to secure or sustain required approvals or adapt to regulatory changes could adversely impact Emyria’s ability to commercialise and manufacture its treatments. 12 E MYRIA AN NUA L R EPO RT 20 23 Directors’ Report Commercial Risk: Emyria may explore various corporate opportunities, such as acquisitions, licensing, or partnerships to advance its reach in mental health care delivery and drug development programs. There is no guarantee that any such opportunities can be finalised on commercially acceptable terms. Even if terms for licensing and partnerships are agreed upon, unforeseen factors related to the environment, technology, or market conditions may impede the performance of distributors and collaborators in delivering contracted outcomes. Moreover, the future success of Emyria hinges on market acceptance and client retention. This involves convincing prospective clients and partners of the efficacy of Emyria’s products and services. Information Technology: Emyria is dependent on robust information technology, software, data centres, and communication systems for its operations. The systems are susceptible to various risks, including disruptions, failures, service outages, or data corruption, which could occur due to computer viruses, malware, internal or external misuse, cyber-attacks, or other disruptions like natural disasters and power outages. A disruption to any of these platforms or systems could have a significant adverse impact on Emyria’s operations. Competition: The healthcare, biotechnology and pharmaceutical sectors are highly competitive and subject to rapid technological changes, both in Australia and internationally. Emyria faces competition from existing alternative treatments as well as from companies developing new products and services targeting similar medical conditions. There is no assurance that Emyria will be able to successfully compete in this landscape. Some of these competing companies may possess or develop technologies that are superior to Emyria’s, or have substantially greater financial, technical, and human resources. As a result, Emyria’s services, expertise, or products could be rendered obsolete, less attractive, or uneconomical due to advances in technology or alternative approaches developed by Emyria’s competitors. Intellectual Property (IP): The acquisition and maintenance of intellectual property rights are crucial for safeguarding the potential value generated from biotechnology research and development. Emyria’s success partially hinges on its capacity to secure patents, maintain trade secret protection, and operate without violating the intellectual property rights of third parties. However, the biotechnology sector is often fraught with complex and uncertain legal and factual questions surrounding patent positions. As such, there is no guarantee that Emyria’s existing or future patents will provide commercially significant protection or that they will not infringe upon the rights of others. Additionally, patent disputes can arise due to the complex nature of the technologies involved. The issuance of a patent is not an assurance against the competitive technologies that may bypass Emyria’s patented technology. Furthermore, Emyria’s patent strategies may not offer global coverage, leaving room for generic competition in some markets. Manufacturing: The scaling up of manufacturing processes to support Phase 3 clinical studies requires ongoing validation and Process Performance Qualification (PPQ). There is a risk that PPQ may reveal technical issues that could affect the project’s timeline and feasibility. These difficulties may include failure to produce materials meeting regulatory specifications for human administration or insufficient product yield to support both clinical studies and planned commercialisation. Any unforeseen challenges in the manufacturing process, such as changes in manufacturing methods, disruptions in supply chains, shortages of input materials, or changes in arrangements with third-party manufacturers, could negatively impact Emyria’s profitability in the future. Commercialisation: While Emyria’s products such as our Ultra-Pure CBD capsules (EMD-RX5, EMD-RX7, and EMD-RX9) and proprietary MDMA analogues have shown promise in preclinical assays and clinical trials, they have not yet been approved for commercial sale. We anticipate that it may take several years for these products to gain regulatory approval, if they do at all. If and when approval is granted, there will be a significant increase in commercialisation expenses. These costs will be associated with setting up sales channels, marketing initiatives, distribution networks, manufacturing capabilities, and supply chain management. Moreover, the success of these products is not guaranteed and will depend on market acceptance by healthcare professionals, patients, and payors within the medical community. 13 E MYRIA AN NUA L R EPO RT 20 23 Reliance on Key Personnel: The success of Emyria is highly dependent on the expertise and commitment of its key personnel. These individuals possess unique skills and knowledge crucial to the development of our intellectual property, the progression of our clinical trials and the provision of mental health care services. As Emyria advances towards drug registration, the company will require additional specialists in clinical development, as well as key financial and administrative staff. Additionally, as Emyria broadens its scope in the provision of emerging mental health care services the company will require sufficiently trained clinicians and support staff. There is no guarantee that Emyria will succeed in attracting and retaining qualified personnel. Failure to do so could significantly hinder our clinical development operations and could have a material adverse impact on our financial performance. Product Safety and Efficacy: The reputation and commercial success of Emyria hinge on the health, safety, and efficacy of its products, including our Ultra-Pure CBD capsules (EMD-RX5, EMD-RX7, and EMD-RX9) and proprietary MDMA analogues. Serious or unforeseen health, safety, or efficacy concerns could result in reduced market acceptance, reputational damage, product recalls, and potential product liability claims. While Emyria plans to obtain product liability insurance to mitigate such risks, there is no assurance that adequate coverage will be available at a commercially acceptable cost. Any concerns regarding the health, safety, or efficacy of our products are likely to diminish customer demand and adversely affect Emyria’s profitability. Litigation: Emyria operates in a sector where the potential for litigation is high. This includes but is not limited to, claims related to breaches of agreements, intellectual property infringement, and employment issues such as personal injuries and occupational health and safety. The financial ramifications of defending against a lawsuit can be substantial, even if the defence is ultimately successful. An unsuccessful defence could result in significant financial damages and costs levied against Emyria, thereby impacting its financial stability. Legislative changes, for instance in antitrust and intellectual property laws, can further elevate the risks associated with litigation. Additionally, Emyria may find it necessary to initiate legal proceedings to defend its intellectual property rights. The pharmaceutical industry is particularly known for extensive litigation, including class actions initiated by end-users or purchasers of pharmaceutical products. As such, Emyria must be prepared to navigate a complex legal landscape that poses various risks to its operations. Dividend paid and recommended No dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2023 (30 June 2022: nil). 14 E MYRIA AN NUA L R EPO RT 20 23 Directors’ Report Information on Directors and Company Secretary Dr Stewart Washer Executive Chairman Dr Michael Winlo Managing Director Appointed 19 February 2018 Appointed 8 November 2019 Stewart has 25 years of CEO and board experience in medical and agri-food biotech companies. He is the director of Botanix Pharmaceuticals Ltd. Michael has a Bachelor of Medicine and Bachelor of Surgery with Honours from the University of Western Australia as well as a Master of Business Administration He currently serves as the director of Botanix Pharmaceuticals Ltd (ASX: BOT) and Orthocell Ltd’s (ASX: OCC) chairman. Stewart is also the Chairman/ Co-Founder of Rumin8, a climate change company focused on methane reduction technology. from Stanford University. Prior to Emyria, Michael was CEO at Linear Clinical Research Ltd (Linear) until October 2019 –a company providing clinical trial services for US- and Asia-based biotech companies. Linear was the first site in Australia and one of only a few in the world to successfully adopt electronic data capture technology. Under Michael’s leadership, Linear’s revenues grew over 300% in just over three years (to over $23 million per year). Michael retains a Directorship at Linear. Prior to Linear, Michael was Health Lead at Palantir Technologies – a Big Data company based in Silicon Valley California. Stewart has held several board positions in successful companies, including Chairman of Hatchtech Pty Ltd, which was sold in 2015 for A$279m and was a director of iCeutica, that was sold to a US Pharma. He has also contributed to the industry as a Senator with Murdoch University and a Director of AusBiotech Ltd. Other current directorships of a public listed company Other current directorships of a public listed company Orthocell Limited (ASX: OCC) Appointed as Chairman on 7 April 2014 None Botanix Pharmaceuticals Limited (ASX: BOT) Appointed as Director on 21 February 2019 Former directorships in last three years of a public listed company Cynata Therapeutics Limited (ASX: CYP) – appointed as Director on 1 August 2013, resigned 1 July 2023 Interest in shares and options Shares 49,658,932 29,950,599 shares are in the control of Dr Stewart Washer and Dr Patrizia Washer. Options 1,666,667 Options held are in the