Bod Australia implements LOI with Tilman S.A; stock up on ASX

Bod Australia Limited (ASX:BDA), based in Double Bay, develops, produces and commercialises plant-based extracts including medicinal cannabis, health and supplement products, as well as skin-care solutions across the Australian market. The company has a research collaboration agreement with Cannabis Access Clinics.

On March 11, the company announced to have executed a letter of intent (LOI) with its long-term partner Tilman S.A., a Belgian-based natural medicine manufacturer, which possesses more than 60 years of experience in quality management, research, development as well as a great global business acumen evident from its delivery of yearly sales in excess of EUR 35 million.

As per the agreement, Tilman will distribute Bod’s cannabis products namely MediCabilis and NutraCabilis, to its established clients (pharmacies and retailers) in Belgium and Luxembourg.

Besides the LOI, Bod Australia has also widened its exclusive distribution rights of Tilman’s products in New Zealand, Australia, and China (e-commerce) to incorporate five new ranges comprising Nasafytol, Antemetil, SediStress, Enterofytol and Tensifytol, with an aim to drive its product uptake and grow its sales profile in the short term.

In Belgium, the approximate annual expenditure on healthcare and skincare amounts to EUR 43.9 billion and EUR 1.72 billion respectively. Thus, it is a highly advantageous market for Bod’s products, with a favourable pharmaceutical and medicinal cannabis regulatory framework in order. With the new initiative, the company is set to expand its footprint in Europe following the approvals from local authorities. Further, Bod is also developing plans to implement similar agreements with significant counterparties across the European continent to accelerate its global expansion drive.

Previously in the same month, Bod secured its first order of a pharmaceutical grade GMP produced cannabis extract containing THC and CBD from the Lambert Initiative, to be delivered immediately. The extract will be used in conducting a clinical trial, in collaboration with Wesley Medical Research, relating to Tourette Syndrome. The Lambert Initiative along with some external parties are financing the trial.

As per the half-yearly financial results for the six months to December 31st, 2018, the company reported positive growth in the revenue from ordinary activities to $ 1.08 million, including the sales of $ 588,825 and up by 48.3% on the prior corresponding period (pcp). The revenue generated includes an R&D grant of $ 453,170, that recoups costs associated with Bod’s Phase I Clinical trial of the proprietary sublingual cannabis wafer. Moreover, the improvement in sales was stimulated by the product suite expansion, signing of new distribution agreements with Priceline, positive product uptake and further expanding distribution through independents.

However, the company also posted the loss for the half year attributable to the owners of BOD at $ 2.79 million, indicating a staggering rise of 108.9% on pcp.

On the corporate front, Bod remains well positioned and finically stable with $ 6.86 million cash at bank as of December 31st, 2018, following the completion of a strategic placement in September 2018 and receipt of $ 450,500 additional funds from Directors. The net cash outflows generated from operating ($ 2.55 million) and investing ($ 99.8k) activities were more than balanced by cash inflows of $ 6.4 million from financing activities.

Bod has a market cap AUD 30.18 million with ~ 69.39 million outstanding shares. At the time of trading on Monday, 11 March 2019, at 03:47 PM AEST, the BDA stock price was trending at AUD 0.445, up 2.3%, indicating an intra-day gain of AUD 0.010.

Going forward, Bod is determined to grow its revenue profile across the remainder of FY2019 via pending distribution agreements, international sales opportunities and a range of potential new products targeting new sectors.

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