MGC Pharmaceuticals announces 2019 commercialisation strategy

MXC

MGC Pharmaceuticals Ltd (ASX: MXC) is an EU bio-pharma company which develops and commercialises a cost-effective portfolio of medicinal cannabis products across Europe, North America and Australasia. On April 2nd, 2019, MGC released an update on its pharmaceutical operations and seed-to-pharmacy business plan. The company’s commercialisation strategy is exclusively centred around its two core divisions, Seed-to-Pharmacy Manufacturing and Research & Development.

The R&D division’s key function is to ensure that MGC Pharmaceuticals remains at the forefront of the sector by collaborating with leading internationally renowned research institutions and delivering affordable medicines. Some of its ongoing development activities include the development of CannaHub, in partnership with the Royal Melbourne Institute of Technology and the Hebrew University of Jerusalem; the CogniCann™ clinical trial taking place with the University of Notre Dame in Western Australia; the CannEpilTM™ clinical trial taking place with the University of Ljubljana, Slovenia; the C4E education platform in collaboration with Epilepsy Action Australia and others. It is primarily focussed on three sectors comprising neurological disorders, oncology and treatment side effects and inflammatory and autoimmune.

Meanwhile, the second division seed-to-pharmacy manufacturing capitalises on the intellectual property generated by the R&D division. Its operations encompass supply chain management and end-to-end cannabis production including cultivation, extraction, isolation and compounding the finished medicinal product to bring phytocannabinoid-based medicines to the global markets.

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Of late, MGC Pharmaceuticals has a strong existing pipeline of products targeting conditions with no effective treatment as of now such as Alzheimer’s, cancer, epilepsy and irritable bowel disease. Moreover, these products are poised for release into the European and Australian markets as the ongoing testing and clinical trials come to an end.

In support of its seed-to-pharmacy strategy, the company plans to shortly commence construction of a facility in Malta on the land awarded by Malta Enterprise. The geological survey on the property has been completed while the architectural plans have been submitted to the relevant authorities for approval.

Moreover, the priorities for 2019 are going as planned with patient recruitment for the Phase IIB CogniCann™ clinical trial underway.

As per the financial results for the half-year ended December 31st, 2018, the company recorded a staggering 864% rise in the revenue from ordinary activities to $ 286,224 from $ 29,681 in the prior corresponding period (PCP) ended December 31st, 2017. The consolidated profit after providing for income tax from continuing operations amounted to $ 952,346 (December 31st, 2017: losses of $ 7,194,527), which includes exceptional one-off items like gain on re-measurement of performance shares of $ 6,270,000 and provision for impairment on the intangible asset of $ 2,031,133.

As of December 31st, 2018, the net cash and cash equivalents stood at $ 6,277,860. The operating activities led to net cash outflows of around $ 2,684,565 primarily on account of payments to suppliers, employees and for research expenses. Further, the investing and financing activities further added $ 848,380 and $ 4,917 to the net cash outflows.

MGC Pharmaceuticals’ current market valuation is around AUD 43.66 million with ~ 1.21 billion outstanding shares. On April 2nd, 2019, the MXC stock price closed the market trading at AUD 0.036, edging up by 5.88%. Today, the stock is trading flat at AUD 0.036 (as at 1:05 PM AEST, 3 April 2019).


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