OWC Pharmaceutical Research Corp (OTCMKTS: OWCP), through its wholly owned Israeli subsidiary, One Word Cannabis Ltd., conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD, and migraines. OWCP is also developing unique delivery systems for the effective delivery and dosage of medical cannabis. All research is conducted at leading Israeli hospitals and scientific institutions, and led by internationally renowned investigators.
In fact, the Israeli government is one of the few countries worldwide to approve clinical studies with cannabis.
The company recently announced that it received Institutional Review Board (IRB) approval to conduct safety testing on its proprietary topical cream compound for treatment of psoriasis and related skin conditions.
Psoriasis cream is one of the major/critical business drivers for the company. It is in final round of efficacy testing before it hits shelves. Management confirmed that this approval is a significant milestone for the company & immediately after approval of psoriasis treatment formulation; OWCP began receiving requests for its topical psoriasis cream product from patients suffering from the condition.
OWCP further added, that after several years of extensive research, they now expect to launch psoriasis cream to the market during second quarter of 2017 or soon thereafter. Beyond psoriasis, it is also pushing multiple myeloma candidates through early stage trials, with the goal of getting the assets into clinical studies before the end of 2017. The company is scheduled to make a presentation at the Wall Street Conference on Wednesday, March 1, 2017 to discuss these developments & the future potentials in detail.
OWCP operates in Marijuana industry that has rapidly & recently turned into a multi-billion dollar massive growth market across US and Canada with many new states legalizing it. According to a recent estimates, cannabis market crossed $6.7 billion from the U.S. alone in 2016, and that sale of cannabis are set to rise to $22.8 billion in the U.S. by 2020.
There are only a handful of publicly traded companies focused on meaningful, advanced stage cannabinoid-based, pharmaceutical development. The growing popularity of this industry is seen as major inflection point for current licensed producers & researchers. In particular, existing cannabis players with sizable market cap & advanced stage product pipeline are expected to grow their business with relatively lesser competitive threats.
OWCP is one of the promising entities for cannabis investors. The company has its own IP’s, which commands significant value. Furthermore, as it move towards approval and commercialization process, the intrinsic value of the company is expected to increase significantly. With a seasoned management team, OWCP is at a critical inflection point.
In fact, supported by abovementioned reasons, company’s stock has unsurprisingly found enormous strength in the recent past. It has been powering due to the favorable impact of the company’s recent announcements and growing popularity of the industry.
Description & manufacturing set-up:
OWC Pharmaceutical, through its wholly owned subsidiary, One world Cannabis Ltd, conducts medical research and clinical trials to develop cannabis-based pharmaceuticals and treatments for conditions including multiple myeloma, psoriasis, fibromyalgia, PTSD, and migraines. It is also developing unique delivery systems for effective delivery and dosage of medical cannabis. All its research is conducted at leading Israeli hospitals and scientific institutions, and led by internationally renowned investigators.
One world Cannabis Ltd was set up in 2014 in Israel as a Wholly owned subsidiary of OWC Pharmaceutical Research Corp. (OTCQB:OWCP). One World offers OWCP with international access to the best research facilities and researchers in medicinal cannabis.
The state of Israel has been supportive of cannabis study and scientific research since 1960s’ in renown academic and research hospitals. The Medical Cannabis Unit under the Health Minister Office is operating in Israel since 2003.
Major Divisions of the Company:
R&D Division: All OWCP studies are following approved clinical procedures by IRB protocols conducted in Israeli hospitals facilities. Each new product targets a specific disease or medical conditions, with a particular emphasis on identifying unique formulation and efficient delivery systems to optimize the bioavailability of dosage.
Consulting Division: This division focuses on supporting and aiding organizations and states which are on the way to implement MMJ program and are looking to adopt the Israeli MMJ Methodology which includes patients’ treatments, recommended daily dosage, manufacturing standards, education programs, knowledge transfer to physicians and more.
Key Cannabis Based Products (IP owned by OWCP) – Likely to be commercialized:
Topical cream: Treatment for different skin diseases starting with tested psoriasis. Estimated market size ~8 Million Psoriasis patients US & Canada (2.5% of population).
Sublingual Soluble tablet: For conditions like, replacement of smoking & pain treatment. Estimated market size – more than 10 million potential patients in the approved MMJ states.
Strategic manufacturing, distribution & marketing Alliances:
Medmar – Based in Maryland, certain rights to manufacture, produce, publicize, promote and market OWCP’s licensed products in the United States.
Michepro – A European distribution company which signed a Joint Venture agreement, 75% (OWCP) 25% (MICHEPRO Ltd), to set up a European entity to promote, manufacture and sell OWCP products in that region.
Team & Facility:
OWCP is led by a team of experienced professionals, having substantial experience in areas of medical cannabis, clinical research, healthcare management, international business and financial markets. This knowledge, alongside their commercial experience, is likely to help OWCP’s business risk profile.
In fact, Dr. Yehuda Baruch, who is leading OWCP’s overall operations as “chief scientist officer” and regulatory affairs, is a world renowned Psychiatrist, who founded, implemented and Headed the Israeli Medical Cannabis Unit under the Minister of Health for over 10 years.
Recent operational break-through:
It recently announced that it has received Institutional Review Board (IRB) approval to conduct safety testing on its proprietary topical cream compound for the treatment of psoriasis and related skin conditions.
Also, In October’16, OWCP completed development of a proprietary, cannabinoid-enriched sublingual tablet for administration of medical cannabis.
OWCP continues to make significant progress in R&D of cannabis-centric medical treatments, specifically with psoriasis cream, which is being readied for the U.S. and European markets. The company is focused on having products on the shelves in the MMJ states this year.
OWCP is scheduled to make a presentation in the upcoming Wall Street Conference to be held on March 1, 2017. OWCP is likely to provide an update about the Company’s progress, specifically focused on its research and products in development, and most importantly the Company’s plans for the future, sales and marketing in the US, Canada and Europe this year (2017).
The legal cannabis market has expanded considerably over the past two years, generating significant and growing investor interest.
Source: Investor presentation
Key Stock Influences
Some key influences that might govern future stock price performance include:
- Timely initiation of U.S marketing program for Psoriasis Topical Cream during second quarter of 2017.
- Meaningful and commercially viable outcomes for its ongoing research about advancement of cannabis-based treatment for multiple myeloma.
- OWCP’s business risk profile is impacted by significant product concentration. There is just one thing that the company is presently relying upon i.e. “Psoriasis cream”. Therefore, OWCP’s ability to evaluate the launch of one or more studies to determine applicability of cannabinoid-based pharmaceuticals for other medical conditions and disorders, such as fibromyalgia and migraines – is critical for them.
- OWCP is still a pre-commercial stage company and has not yet generated meaningful revenue and will likely operate at a loss as it grows its market position and seeks ways to monetize it. Therefore, any time or cost overrun in its ongoing R&D activities and its impact on business & financial profile will remain a key business sensitivity factor.
- Also, given the fact that OWCP is burning through cash as it continues to spend in research development, it will need to access additional funding to continue operating. This is likely to lead to dilution in its present equity capital. Moreover, any sort of inability to raise fund in a timely and prudent manner, could materially & adversely affect its operations and liquidity.
For quarter ended September 2016, OWCP have not generated any revenue. The company has operating expenses related to general and administrative expenses and research and development.
During three months ended September 30, 2016, it incurred a net loss of $140,794 due to general and administrative expenses of $74,898, research and development expenses of $30,363, a loss of $4,521 related to a debt settlement, interest expense of $2,055, a valuation loss on derivatives of $2,426 and expenses due to amortization of debt discount of $26,531 as compared to a net loss of $408,225 due to general and administrative expenses of $311,391 and research and development expenses of $96,834.
Its general and administrative expenses decreased by $236,493 during September 30, 2016 as compared to the same period in the prior year. This decrease of 76% is primarily the result of decreased stock-based compensation. The charge relating to stock-based compensation expense was $0 for September 30, 2016, compared to $119,199 for September 30, 2015.
Research and development expenses also decreased to $30,363 during September 30, 2016, compared to $96,834 during the same period in the prior year. The decrease by $66,471 or 69% was primarily due to decreased payments related to our collaboration agreements.
Cash Flow & Balance Sheet
OWCP has an authorized capital of 500,000,000, out of which, total outstanding shares are 139,255,474 (30 Dec 2016) & the float is 86,515,750 (31 Oct 2016)
Based upon its cash position of $90,327 as at September 30, 2016, OWCP need to raise additional capital, either through equity or debt, in order to fund its ongoing operations including research and development initiatives for the next twelve months. T
The total accumulated deficit as of September 30, 2016 and December 31, 2015 were $8,177,778 and $7,548,866, respectively.
The company recently filed form 8-K for Unregistered Sales of Equity Securities, informing that during January 9, 2017 through February 22, 2017, OWCP issued and sold equities to accredited investors.
On Friday, February 24, 17, OWCP shares surged by 18.01% to $2.19 on an average volume of 4.88M shares exchanging hands. Market capitalization is $321.17 million. The current RSI is 78.82.
In the past 52 weeks, shares of OWCP have traded as low as $0.01 and as high as $3.23.
At $2.19, shares of Zeno are trading significantly above their 50-day moving average (MA) at $0.56 and above their 200-day MA at $0.18.
The present support and resistance levels for the stock are at $1.73 & $2.43 respectively.
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