‘Psychennex’ – new psychedelic-assisted clinic business

Derek Rose | May 16, 2023

A new subsidiary of an ASX-listed health care company plans to open what will be one of Australia’s first psychedelic-assisted clinics in Melbourne, with a rapid expansion across the country to follow.

Incannex Healthcare on Tuesday announced it was launching a company called Psychennex that will hold its psychedelic business assets as Australia prepares to legislate MDMA and psilocybin to treat post-traumatic stress disorder and treatment-resistant depression from July.

“Mental unwellness is the defining health crisis of our time,” a presentation released to the ASX says. 

While traditional treatments work for some, many are left behind, it adds.

Psychennex’s Clarion Clinics Group has leased a riverfront premise in Abbotsford, Melbourne that is undergoing fit-out in preparation for opening as a prototype clinic, capable of treating 600 patients per year, about September.

“We then plan to roll out much bigger clinics as quickly as we can in the major metropolitan centres,” Clarion Clinics director Peter Widdows told AAP in an email. 

“These bigger clinics (would be) capable of treating around 1500 to 3500 patients per year.”

The presentation calls for opening another clinic in Melbourne and one in Sydney next year, a fourth in Brisbane in 2025 and others in Perth, Adelaide, Canberra and the Gold Coast in 2026.

“If we can expand more quickly, we will,” Mr Widdows said.

More clinics could also be opened as part of a franchise or licensing model.

Clarion says the potential patient pool is very large, with about 390,000 Australians suffering from PTSD and another 280,000 with treatment-resistant depression. 

While Clarion estimates fewer than 20 per cent would initially be interested in psychedelic-assisted psychotherapy, that’s still a pool of 120,000 seeking treatment, with industry capacity falling well short of that number.

A course of psychedelic-assisted treatment might last up to nine months and involve both psychotherapy and psychiatry, so it could be quite expensive.

Mr Widdows said pricing was still being determined but could be between $15,000 and $20,000.

“While, on a health economics scale, a once-only treatment course for $20,000 is much better than a lifetime of daily drugs, monthly psychotherapy sessions and other treatments and offers much-improved lifestyle prospects for the patients, some patients will still require external funding to receive treatment,” he said.

Incannex said it would continually evaluate its options for Psychennex regarding a possible sale or spin-off in an initial public offering.