Animal health industry thrives during COVID-19, Flick Through CannPal (ASX:CP1) and Apiam (ASX:AHX)

  • October 31, 2020 01:13 AM AEDT
  • Team Kalkine
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Animal health industry thrives during COVID-19, Flick Through CannPal (ASX:CP1) and Apiam (ASX:AHX)

Summary

  • The animal health industry has flourished amid the pandemic as people started looking at pets for companionship and to help reduce mental stress.
  • Australia has witnessed a considerable rise in pet ownership during the period. Besides, there was an increased focus on pet care.
  • In the September 2020 quarter, animal health player, CannPal entered an agreement to commence manufacturing activities for the commercialisation of DermaCann® in the US in early 2021.
  • Rural veterinary company Apiam Animal Health’s Q1 FY21 revenue was up 14.1%, driven by changing dynamics in the pet ownership space and its expansion in the animal vaccine industry.

Amongst the few industries that managed to whether the coronavirus storm and come out unscathed was animal health. In fact, the pandemic acted a tailwind for the business.

The pandemic-induced lockdowns were difficult for individuals, and they increasingly looked at pets for company and help reduce stress levels. The market saw a considerable rise in ownership of pets, which benefitted several companies in the animal health business.

The animal health system of Australia includes all government agencies, including commercial companies, universities, organisations, along with individuals engaged in the livestock production chain.

The government of Australia is responsible for global animal health matters, including export certification and trade, quarantine, and disease reporting to the World Organization for Animal Health (OIE). The government also coordinates and offers guidance on national policy on animal health and welfare. 

With this backdrop, let us discuss 2 ASX-listed animal health stocks-

CannPal Animal Therapeutics Limited (ASX:CP1)

CannPal Animal Therapeutics Limited is working with a mission of providing pet owners and veterinarians access of evidence-based, high-quality, plant-derived therapeutic products for better health and well-being for animals.

Currently, the Company is focused on the development of pharmaceutical and nutraceutical products for dogs, for commercialisation in several worldwide markets.

On 29 October 2020, CannPal Animal Therapeutics updated the market with its progress during the September 2020 quarter. Key highlights include:

  • CannPal received the Final Study Report for its Phase 2B Pilot Target Animal Safety Study (TAS) for CPAT-01, the Company’s lead drug candidate in development for pain and inflammation in dogs.
  • The Company also received its Final Bioanalytical Sample Analysis Report on the Quantitation of CBD (Cannabidiol) and THC (Tetrahydrocannabinol) Concentrations in the plasma samples of Dog from the Phase 2A pilot dose determination study.
    • The study was conducted to investigate the safety and clinical efficacy of varying doses of CPAT-01 in dogs diagnosed with osteoarthritis. The test results confirmed the proportionate absorption of the drug with the increasing dose used in the study.
  • During the quarter, CannPal disclosed completion of its randomised, placebo-controlled, double-blind clinical trial for DermaCann®. DermaCann® is the Company’s lead nutraceutical product under development for healthy skin along with immune function in dogs.
  • During the period, CP1 started the application process for the registration of DermaCann® as a herbal supplement with the South African Department of Agriculture, Forestry and Fisheries.
  • The Company signed an agreement to commence manufacturing activities for the commercialisation of DermaCann® in the US in early 2021.
  • CannPal also successfully initiated a small-scale commercial trial for a new Joint Health Supplement produced by using MicroMAX® technology.

Managing Director of CannPal Layton Mills commented-

Stock Information: On 30 October 2020, the shares of CP1 last traded at A$0.110, in line with the previous close. The Company has a market capitalisation of A$10.24 million.

ALSO READ: Lens on ASX-listed animal health players -AHX, CP1, EOF, PAA

Apiam Animal Health Limited (ASX:AHX)

ASX-listed animal health company Apiam Animal Health Limited provides several products and services to production and mixed animals. The services include the provision of ancillary services, genetics, veterinary services, retail, and wholesale of related products, as well as technical services related to food-chain security.

Apiam strong performance during Q1 FY21

The results of the first quarter of FY21 reflected the fact that Apiam has benefited directly from COVID-19.

Highlights from the financial front-

  • The unaudited revenue for Q1 FY2021 was reported at A$29.6 million, 14.1% higher compared to Q1 FY20.
  • Gross profit for Q1 FY21 was A$16.6 million, up 21.2% on pcp.
  • The quarter was supported by a robust performance in the dairy and companion animal segments with growth achieved in pig segment as well.

Pet ownership surged during COVID-19 lockdowns

  • The Company also disclosed that its pet ownership surged during COVID-19 lockdowns and its animal business has had a bumper half-year.
  • Apiam highlighted that the increased pet ownership supported swift momentum in new members signing up to this program, with almost 64% growth during the third quarter of the financial year 2020 and nearly 41% growth during the fourth quarter of FY20 (on pcp).
  • The Company also disclosed that Best Mates continues to grow strongly with 3,778 active members and 20% growth during the first quarter of the financial year 2021.

Dr Chris Richards, Managing Director of Apiam commented-

Way Forward

Stock Information: On 30 October 2020, the share price of AHX was noted at A$0.670, down by 1.471%. The market capitalisation of the Company was reported at A$79.78 million.

 


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