Vitality Biopharma, Inc. (OTCQB: VBIO) is a cure development company, dedicated to unlocking the power of cannabinoid “prodrugs” as a means to treat serious neurological and inflammatory disorders. They are interested in drug approvals first and foremost, but the company’ overarching mission is to improve the lives of patients afflicted with devastating neurological and inflammatory conditions, such as inflammatory bowel disease, narcotic bowel syndrome, and multiple sclerosis.
The Company’ business risk profile is supported by multiple breakthroughs on the research and development side. Analyst tracking the stock believes that the company is in a critical inflection point and is having an extremely favorable risk-reward position. Thus, value investors should consider exposure in this sector as the backdrop remains favorable.
Company highlights:
- Received DEA site approval and now seeking FDA approval of VBX- prodrug strategy
- Intellectual property covering more than 20 cannabinoid prodrugs including modifications of nonpsychotropic THC (VBX-100), CBD, and CBDV, a new class of cannabosides
- Proprietary glycosylation platform enables cannabinoids to be modified to enable therapeutic effects without @ psychoactivity
Recent announcements:
Neural Repair Treatment Patent Filings: On October 3rd, the company announced the filing of national patent applications in the United States and Canada that describe compounds discovered to be effective in a drug screening model for neural repair.
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The discoveries included a compound that is known to have a positive track record of safety in clinical trials and to provide pain relief through modulation of the vanilloid TRPV1 receptor. Cannabidiol (CBD), a non-intoxicating cannabinoid independently FDA-approved in pharmaceutical form for the treatment of epilepsy, is also known to relieve pain through modulation of the TRPV1 receptor. As a result, Vitality has made broad patent claims covering the use of CBD and other TRPV1 agonists for myelin repair and for treatment of demyelinating disorders.
“We’re excited to pursue this intellectual property in the U.S. and Canada, and to perform additional work characterizing the regenerative potential of these compounds,” said Robert Brooke, Chief Executive Officer of Vitality Biopharma. “By targeting fundamental mechanisms of neural repair, we believe the result could be more powerful therapeutics and treatment regimens that benefit patients across a variety of important disease states.
THC Prodrug VBX-100 Demonstrates Positive Safety Results: Before this on August 21st, the company announced that during a recent in the vitro safety pharmacological screening study its lead drug candidate VBX-100 demonstrated no signs of adverse pharmacological effects, affirming its potential for widespread clinical use as a GI-targeted prodrug of THC. With the positive safety profile seen in this study, VBIO’ glycosylation platform clearly has succeeded in creating THC prodrugs with reduced potential for adverse or off-target effects.
As the company rapidly advances VBX-100 through the final stages required for first-in-human clinical studies in the U.S., these results are quite important and an early indicator that the company’ THC prodrugs may be very well tolerated in future clinical trials.
Clinical Development Pipeline:
About the Company:
Vitality Biopharma, Inc. engages in the development of cannabinoid pharmaceuticals for the treatment of neurological and inflammatory disorders in the United States. The company’s products in the pipeline include VBX-100, an oral cannabinoid formulation for inflammatory bowel disease, C.difficile-associated diarrhea and colitis, and narcotic bowel syndrome; and VBX-210, a cannabinoid formulation, which is in preclinical studies for the treatment of gastrointestinal conditions. It develops additional cannabinoid product formulations for refractory pain and autism spectrum disorder. The company was formerly known as Stevia First Corp. and changed its name to Vitality Biopharma, Inc. in July 2016. The company was founded in 2007 and is based in Los Angeles, California.
Pipeline:
Financial Results –
- Revenues and Profitability: The company’ net loss during the three months ended June 30, 2018, was $1,135,219 compared to a net loss of $1,106,353 for the three months ended June 30, 2017. During the three months ended June 30, 2018, VBIO generated $26,328 in revenue and $580 in gross profit, compared to $27,043 in revenue and $6,557 in gross profit for the 2017 period. VBIO’ revenue in each of the periods presented was earned from the sale of research diagnostic testing kits and chemicals. The company expects such sales to continue at approximately the rate during the 2018 period.
- Liquidity and financial flexibility: As of June 30, 2018, VBIO had total current assets of $182,706, which was comprised mainly of cash of $173,037. The Company’ total current liabilities as of June 30, 2018, were $518,225 and consisted of accounts payable and accrued liabilities of $347,790 and derivative liability of $170,435. As a result, on June 30, 2018, VBIO had a working capital deficit of $335,519.
Key risk factors and potential stock drivers:
- The Company have not yet received significant revenues from sales of products or services and have recurring losses from operations. Therefore, its ability to maintain liquidity and financial flexibility to fund its incremental capital requirements will remain a critical challenge for the company.
- The company’ business is exposed to risk related to competitive pressure, and its revenues may suffer from competitive pressure.
- Marijuana remains illegal under federal law. It is a Schedule I controlled substance. Even in those jurisdictions in which the use of medical marijuana has been legalized at the state level, its prescription is a violation of federal law.
- The company’s business is exposed to regulatory risk and its adverse impact on the overall business risk profile.
Stock Performance
Comments:
- On Monday, October 15th, 2018, VBIO was at $1.72, on volume of 71K shares exchanging hands. Market capitalization is $38.369 million. The current RSI is 43.62
- At $1.72, shares of VBIO are trading below its 50-day moving average (MA) at $1.86 & below its 200-day moving average (MA) at $1.76
- The present support and resistance levels for the stock are at $1.4933 & $1.9533 respectively.
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