Healthcare shares Althea (ASX:AGH) and Alterity (ASX:ATH) in the spotlight, here’s why

Summary

  • While the benchmark index S&P/ASX200 ended a modest 1.23% higher, a few ASX-listed players reported significant gains during the day’s trade.
  • Althea Group announced the signing of two significant agreements expected to uplift the Company’s revenue by ~CAD$4.65 million over the next year. Althea’s shared closed over 9% higher.
  • Biotech company Alterity Therapeutics share price surged ~27% following the approval of its patent by the US Patent and Trademark Office.
  • The US patent gives 20 years of exclusivity to Alterity and provides a solid foundation for continued drug development.

Two healthcare stocks, Althea Group Holdings Limited (ASX:AGH) and Alterity Therapeutics (ASX:ATH) were in the spotlight today and traded considerably higher, buoyed up by some significant announcements. While the benchmark index was up by a modest 1.23%, the share price of Althea and Alterity Therapeutics rose by 9.195% and 26.923%, respectively.

The respective announcements that drove the surge were:

  • Althea’s wholly-owned Canada-based subsidiary Peak Processing Solutions recently signed two deals: a license agreement and a manufacturing and distribution services agreement.
  • Alterity announced that the USPTO approved its patent for next-generation compounds to treat neurodegenerative diseases.

Let us go through the announcements in detail-

Althea Group’s two new agreements anticipated to uplift revenue

An Australian cannabis player, Althea Group Holdings Limited, is a licensed producer, supplier as well as exporter of medicinal cannabis of pharmaceutical grade. The Company offers a broad range of products and services to provide support to eligible patients and HCPs in navigating treatment pathways of medicinal cannabis.

On 16 November 2020, Althea Group announced that its wholly-owned Canadian subsidiary Peak Processing Solutions had signed two substantial agreement:

  • A license agreement with Earth Kisses Sky to manufacture two topical products (customer branded)
  • A manufacturing and distribution services agreement with Canadian cannabis player Electric Brands to manufacture two canned beverage stock-keeping units or SKUs.

The Company notified that the license agreement with Canada’s Earth Kisses Sky aims to produce two customer branded topical products, with 150,000 units (75,000 of each) anticipated to be purchased in the first year.

The second agreement is manufacturing and distribution services agreement with Electric Brands, a Canadian high growth start-up, for manufacturing two canned beverage SKUs with an initial anticipated order of 50k units.

Peak Processing has now signed contracts with total projected revenue of up to almost CAD$4.65 million for the next one year and keeps a solid sales pipeline moving into 2021.

Lately, during mid-September 2020, Peak obtained its Standard Processing Licence from Health Canada.

On the Peak update, Althea CEO Joshua Fegan commented-

Last month, the Company announced its quarterly results (period ended 30 September 2020) on an upbeat note. Althea set a new patient record with 943 new ones (+27%) added during the period. The Company’s revenue jumped 32% and expects a break-even by the end of March 2021 quarter.

Stock Information: On 16 November 2020, the share price of AGH was last noted at A$0.475, up by 9.195%. The Company has a market capitalisation of A$104.36 million.

ALSO READ: Lens On 3 ASX-Listed Cannabis Stocks: Althea, MGC Pharmaceuticals and AusCann

Alterity Therapeutics Receives US Patent Approval

ASX-listed biotechnology player Alterity Therapeutics Limited is engaged in R&D of therapeutic drugs used to treat age-related disorders including Alzheimer's disease. The lead candidate of Alterity, ATH434, inhibits the aggregation of pathological proteins implicated in degeneration of neurons.

On 16 November 2020, Alterity Therapeutics stated that the USPTO (United States Patent and Trademark Office) had approved the Company’s new composition of matter patent.

The new patent comes from Alterity’s in-house research and is pivotal to the next-gen drug development portfolio, primarily for neurodegenerative indications.

The US patent covers over 150 novel pharmaceutical compositions that are designed for redistribution of the labile iron implicated in Alzheimer’s disease, Parkinson’s disease, and other neurodegenerative disorders. The patent was filed in March-2020 and underwent prioritised examination by the USPTO.

Alterity highlighted that the new patent would support the expansion of its drug development portfolio. ATH434 is the Company’s most advanced compound and is currently under clinical development. The compound has shown a favourable safety and pharmacokinetic profile.

The new patent gives 20 years of exclusivity to Alterity and offers a strong base for continued drug development and commercialisation. Besides, it also provides a basis to identify new compound within Alterity’s extensive drug discovery library to target important neurodegenerative indications.

Alterity’s Chairman and CEO, Mr Geoffrey Kempler commented-

Alterity Therapeutics is also pursuing patent protection in other jurisdictions.

Stock Information: On 16 November 2020, the share price of ATH closed the day’s trade at A$0.033, skyrocketing by 26.923%. The Company has a market capitalisation of almost A$35.26 million.

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