India Globalization Capital Inc. (NYSE: IGC) develops intellectual property for the treatment of life altering or life threatening conditions, through its research on phytocannabinoid therapies, in the United States. The Firm also manufactures farming facilities for leasing. In Malaysia, the Company develops and manages residential and commercial real estate.
Presently IGC is focusing more on development of cannabis-based therapies to treat cachexia, nausea, vomiting, Parkinson’s disease, Alzheimer’s disease, epilepsy, PTSD and other life altering conditions in humans and animals. In support of this mission, IGC has assembled a portfolio of patent filings for its phytocannabinoid-based treatments.
During June 2017, IGC announced that it has entered into a definitive license agreement with the University of South Florida making it an exclusive licensee of the U.S. patent filing entitled “THC as a Potential Therapeutic Agent for Alzheimer’s Disease.” By acquiring this patent filing, IGC is protecting a potential cannabis-based blockbuster treatment for America’s most expensive disease.
In 2017 Medicare and Medicaid alone are expected to spend $175 billion on patients diagnosed with Alzheimer’s. There are currently over 5.3 million Americans with Alzheimer’s (AD). The cost of Alzheimer’s has increased significantly and is expected to continue to surge higher. The number of patients is expected to double over the next 20 years and the direct costs are expected to exceed $450 billion per year in the next 12 years. There is still no accepted cure for Alzheimer’s disease.
As per management, securing this licensing agreement represents a major inflection point for IGC as it now look to prepare several key products for clinical trials. Furthermore, the company is putting the finishing touches on its products, which may include filing additional patents, pursuing clinical trials for its Alzheimer’s product and others this year. IGC also expects in the near future to share some data that supports its formulation, the patent application, and the transition to clinical trials as well as details of commercialization initiatives.
India Globalization Capital Inc. announced financial results for the third quarter ended December 31, 2016 on Feb 21st. Revenue for Q3 was $250,000 compared to $1,085,000 for same period in 2016. Revenue was primarily generated by renting heavy equipment and managing construction of the hotel in Genting, Malaysia. IGC, reported a net loss of $111,000 and EPS loss of $0.00, compared to $403,000 and $0.02 for Q3 2016. The improved profitability is attributable to Management’s efforts to focus on developing cannabis-based therapies, and by realization of cumulative previously deferred foreign exchange gains. IGC is scheduled to release next quarter earnings on July, 13 2017.
About the Company: India Globalization Capital, Inc. (“IGC”), a Maryland corporation, was organized on April 29, 2005 formed for the purpose of acquiring one or more businesses with operations primarily in India, Hong Kong, China and now Malaysia, through a merger, capital stock exchange, asset acquisition or other similar business combination or acquisition.
On March 8, 2006, the Company completed an initial public offering. IGC is headquartered in the United States. The operations of IGC are based in the USA, India, and Malaysia. In the United States, throughout its research on phytocannabinoid-based therapies, IGC develop intellectual property for the treatment of life altering or life threatening conditions; for the purpose of leasing, it also build state-of-the art farming facilities. In India, it leases heavy equipment and in Malaysia, develops manages and sells residential and commercial real estate.
Major clinical pipeline that is Readying for Medical Trials:
- Natrinol is a natural substitute for Marinol, or synthetic THC. This product is for relieving nausea, vomiting and appetite stimulation in patients with AIDS and Cancer.
- Caesafinuses combination therapy to alleviate seizures in dogs and cats.
- Serosapse addresses several end points in Parkinson’s disease including Rapid Eye Movement (REM) sleep disorder, anxiety, and dyskinesia.
- Hyalolex is aimed at reducing the buildup of beta-amyloid in Alzheimer’s disease.
The Company’s development pipeline:
Recent Highlights: The Company recently acquired exclusive rights to THC-based treatment for Alzheimer’s disease.
THC has several known molecular pathways by which it interacts with the human body, including binding to the CB1 receptor, anti-oxidative effects, and others. The patent filing claims discovery of a new pathway: low doses of THC bind to amyloid beta plaques and prevent those plaques from aggregating on neurons, which is what occurs in Alzheimer’s disease and causes cognitive decline.
If the patent is granted and proven, IGC will own a significant therapeutic pathway by which THC interacts with the human body.
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In the past few years, research around cannabis has grown. Clinical trials have begun to reflect that side effects of THC and other cannabis products are tolerable to patients and reduce with time. There is trial data highlighting that, at proper doses, cannabinoids have positive side effects for Alzheimer’s patients, such as a reductions in delusions and mood disorders.
The research on the effect of THC for Alzheimer’s patients’ cognitive function is also validated in two papers. One, published by the Salk Institute in 2016, validated the University of South Florida’s finding that low doses of THC break up amyloid-beta plaques on neurons. Another, published this year in Nature, confirmed the therapeutic promise, showing that cognitive function was restored in aged mice, which were provided low doses of THC.
Therefore, the pathway has incredible potential in treating Alzheimer’s disease and is now a burgeoning research area. Acquiring these patent further supports IGC in protecting its proprietary formulation IGC-AD1, which includes low-doses of THC and is intended to disrupt the buildup of amyloid beta plaques and alleviate some of the worst symptoms of Alzheimer’s disease.
The company is aggressively focusing on assembling a strong development team and a primary pipeline of four major products addressing large markets and possible blockbuster indications utilizing cannabis-based therapies.
Outlook over the near to medium term: In 2017 company’s key goal is to accelerate the development of cannabis-based therapy portfolio to support key indications such as Pain, Seizures, Cachexia, PTSD and Depression. In tandem, it expects to initiate pre-clinical trials on IGC-501-Pain, IGC-502-Seizures and IGC-504-Cachexia.
Q3 2017 Financial Results:
Revenue for fiscal Q3 2017 was $250,000 compared to $1,085,000 for fiscal Q3 2016. Q3 2017 revenue was primarily generated by renting heavy equipment and managing the construction of the hotel in Genting, Malaysia. Revenue decreased because the company curtailed trading activity so Management can focus on developing cannabis-based therapies.
In Q3 2017, the Company reported a net loss of $111,000 and an EPS loss of $0.00, compared to a $403,000 and $0.02 for Q3 2016. The improved quarterly performance is attributable to Management’s efforts to focus on developing cannabis-based therapies, and by realization of cumulative previously deferred foreign exchange gains related to Ironman.
For the period ended December 31, 2016, IGC’s cash and cash equivalents along with restricted cash was approximately $744,000 and stockholders’ equity was approximately $7,540,000 compared with approximately $13,948,000 for the period ended March 31, 2016.
In Q3 2017 the reduction in stockholders’ equity was attributable to giving up control over Ironman assets. This was previously reported by IGC on Form 8-K on January 6, 2017. On a proforma basis IGC’s stockholders’ equity as of March 31, 2016, was approximately $6,203,000 versus actual as of December 31, 2016 of approximately $7,540,000, an increase of $1,337,000.
As per management, IGC currently has sufficient cash to continue business operations with limited expansion. The amount and timing of incremental cash requirements will depend on the progress and success of the company’s clinical development programs, regulatory and market acceptance, and the resources it devotes to research and commercialization activities.
Key risk factors and potential stock drivers:
As IGC proposes to test various aspects of THC and Alzheimer’s, with a strategy to take a cannabis-based Alzheimer’s drug to market, it might need additional funding.
Therefore, it is exposed to risk of the potential for dilution. The company is going to need incremental capital.
The favorable outcome of clinical testing and its path to FDA approvals could be a medium term trigger for IGC stock.
The company’s business risk profile is subject to significant regulatory risk. Medical marijuana/cannabis is a highly regulated and uncertain market and therefore IGC has to know how to navigate & abide by the regulations.
The company’s ability to ramp-up profitability, while sustaining its revenue growth, would be one of the key stock driver over the near to medium term. The company must regulate its development costs.
Stock Chart:
On Friday, July 7, 2017, IGC was trading at $0.41 (up 1.22%) on an average volume of 222,568 shares exchanging hands. Market capitalization is $10.96M. The current RSI is 46.02
In the past 52 weeks, shares of IGC have traded as low as $0.19 and as high as $0.80.
At $0.407, shares of IGC are trading below its 50-day moving average (MA) at $0.42 and above its 200-day MA at $0.37
The present support and resistance levels for the stock are at $0.39 & $0.43 respectively.
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