Chicago-based mental health care provider Stella has acquired the majority of ketamine-assisted therapy provider Field Trip Health & Wellness Ltd’s U.S. assets.
The deal gives Stella a new line of business which its CEO says complements its existing offerings. Plus, the combined Stella-Field Trip assets will generate higher revenue and lower overhead than Field Trip achieved, leaders of the company told Behavioral Health Business.
On March 22, a Canadian court granted Field Trip protections while it sought to restructure its obligations. That process has resulted in multiple buyers dismantling and taking parts of the business. Earlier, the court approved the sale of Field Trip’s Jamaica psilocybin research and production facility to William Mahfood, chairman of a beverage company called Wisynco Group Limited, for $350,000.
On June 6, the courts approved Stella’s acquisition of Field Trip’s offices in New York City and Washington D.C. It has also cleared Stella’s acquisition of Field Trip’s intellectual property, such as the company’s brand, technology and research.
Stella is still in negotiations with the landlord of Field Trip’s San Carlos, California, location. Stella CEO Philippe Sanchez says that the deal may still work out and allow the company to establish a location at that office in the San Francisco Bay Area.
Before the Field Trip deal, Stella focused on providing therapy combined with stellate ganglion block (SGB) treatments.
An SGB involves a provider injecting an anesthetic near a bundle of nerves near the neck bones. It is thought to “reset” the dual sympathetic nervous system. The combined treatment is sometimes referred to as a dual sympathetic reset (DSR). SGBs are a common procedure for pain-related treatments.
“It was clear from early on that incorporating ketamine as another treatment protocol, particularly when you combine it with DSR and you add therapy, is a very powerful and very effective treatment for people that suffer from the most acute symptoms,” Sanchez told BHB. “When we were made aware of Field Trip facing their own financial trouble, it became a bit of a no-brainer opportunity for us to at least speak with management and see whether we could bring forces together.”
Field Trip also struck a deal with the Canadian Centre for Psychedelic Healing Sault Ste. Marie (CCFPH). CCFPH acquired Field Trips Canadian assets in a deal approved by the court on May 20, according to public documents.
The acquisition of Field Trip’s assets accelerates the scale of Stella in the U.S. Earlier in the year, it opened its flagship office in Chicago and recently secured $7 million in a funding round led by Sterling Partners.
The company operates over 35 locations in the U.S., Israel and Australia.
Making ketamine-assisted therapy work
Field Trip and several other ketamine-assisted therapy providers — including the previously largest such provider Ketamine Wellness Centers — have collapsed in recent months.
Fundamentally, expensive ketamine treatments that aren’t covered by insurance and a general lack of acceptance by mainstream consumers make ketamine a promising but not-quite viable service to offer on its own.
“When Field Trip was doing this, we had just one offering,” Mujeeb Jafferi, a co-founder of Field Trip and ex-company president, told BHB. “Field Trip did ketamine-assisted psychotherapy that started at $5,000 and went all the way to $7,500.”
Jafferi pointed to greater opportunities for treatment and operational synergies with the combined Stella and Field Trip U.S. locations. He now works as Stella’s president and clinical operations officer. Field Trip’s former chief technology officer, Amardeep Manhas, has taken a similarly titled role at Stella.
Stella is also not taking on the overhead of all of the Field Trip locations, Sanchez said, limiting the burden that Stella adds with this deal.
The company also hopes to make a more effective pitch to the payers and employers in the major markets that it operates in within the U.S.: Chicago, New York, Washington D.C. and Los Angeles.
A little less than half of Stella’s revenue comes from payers and employers. About 60% of patients are coming to Stella and paying out of pocket, Sanchez said.
“Part of our core development plan is to work with organizations that will make the treatment more affordable,” Sanchez said.
Stella will make that case to payers and employers more compelling by prioritizing outcome tracking. Stella tracks the progress and impact of its treatments by assessing patients before, during and after treatment, Sanchez said.
Jafferi identified this data-based approach as a differentiator as well.
“I want to bring people’s attention to the data,” Jafferi said. “A lot of times we have a population base that’s considered treatment resistant. But have they truly exhausted all possible and potential treatments?”
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