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Aphria Strengthens Its Ties With Pharmaceuticals ByTetra Bio-Pharma Alliances

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November 09, 2017 – Comments (0) | RELATED TICKERS: APHQF , ACBFF , TWMJF

Aphria Ties Itself To Multiple Tetra Bio-Pharma Clinical Trials:
Aphria has entered strongly into the cannabis oil market this year, as has their largest competitors, Aurora, Organigram and Tweed. Aphria has chosen to distinguish itself by aligning itself with biopharmaceutical company Tetra Bio-Pharma, which is the first company in the world to do and complete an FDA and Health Canada Phase I trial on dried cannabis. That product is now entering Phase III clinical trials, another first in all the world. In particular, Aphria worked together with Tetra BP to create the special blend for the clinical trials. That Phase I trial was highly successful and they not only tested that blend, PPP001 or Phyto Pain Pharma 001, named after that subsidiary of Tetra BP, to study its effects on the cancer pain patients by itself, but they also went much further by studying the effects that might occur with those patients who were also taking opiods for their pain at the same time. All aspects of the study were highly successful and including that area of the PPP001 dosing combined with dosings of opiods were very fruitful, and the trial provided a great deal of new, heretofore unknown, data for doctors and pharmacists. In fact it was so successsful they announced recently they were launching Phase III trials for PPP001 shortly.

Aphria - Tetra Alliance Marches Onward Building On Successes:
As good as this success is for the pair, this has not stopped the Aphria - Tetra BP partnership from pursuing more agreements together. They recently signed a joint distribution agreement where Tetra will be selling Aphria products in the maritime provinces and Quebec, and they have noted strong demand coming from the retailers for the Tetra product they are preparing for these sales. This agreement features "Aphria supplying dried medical cannabis under its ACMPR license, and Tetra packaging the product using the manufacturing process developed for its in-progress clinical drug trial for PPP001. The formulation and packaging will be completed by Tetra, under its CDSA dealer’s licence, at its New Brunswick facility."

High Demand For Distribution Venture's Product Calls For Enlisting More Licensed Producers:
In an update Tetra BP stated that due to the high demand early on the partners had to bring in more producers to be able to fill the orders. So far the market has overlooked that fact because the price of the stock you would think would have been sizzling like a steak on a hot southern grill in the middle of July but instead has gone into a consolidation pattern testing the 200 day moving average. Yet consider what the CEO of Aphria had to say about the demand being shown: “The commercial venture between Tetra and Aphria will enhance Aphria’s brand visibility and distribution of our high-quality medical grade cannabis into the maritime provinces and Quebec, as we look to meet the commercial demand for PPP001,” said Vic Neufeld, CEO of Aphria Inc.: He also openly discussed it, saying,  "as we look to meet the commercial demand for PPP001".That's what he was talking about; the fact that they didn't have enough to meet the demand to the point that they brought in more growers to produce the product.

What Demand Tells Us At The Preliminary Stage Of Prepping The Launch:
The demand by retailers for the partnership product suggests sales will be good and Tetra should be very successful. Another portion of that agreement calls for an expansion of Tetra's sales efforts to expand into all four corners of the Canadian landscape upon the success in the maritimes and Quebec. After hearing that they are experiencing very high demand for that product in the pre-sale marketing stage, the odds are very good for investors and shareholders that Tetra will be expanding sales in order to sell the partnership product across Canada. And man, that's excellent if true. But hold up. It's not only Canada they are expanding throughout! The same news release reveals the partnership fully intends to enter the US market: Here's that quote: "Tetra and Aphria have invested in the development of its PPP001 drug and will continue to invest to bring PPP001 to market in both Canada and USA as the first prescription drug using dried cannabis." Now that's a strategic plan worth knowing about. They are going to enter just about the largest market there is. Yes, tell me more like that! Aphria already has commenced sales through its operations in the state of Florida with a number of its products, so is obviously one of the first places in the USA to keep an eye on about this.

Yet Another Aphria Agreement With Bio-Pharmaceutical Company Tetra Bio-Pharma:
Furthermore, as if all that wasn't enough to wet your whistle, Aphria and Tetra implemented yet another agreement for Aphria to start promoting and selling Tetra's Rx Princeps under their ACMPR license. Announced this past mid-October 2017, the partnership stated, "Tetra has signed a distribution agreement with its trusted partner Aphria to sell Rx Princeps, its unique blend of dried medical cannabis used in its PPP0001 clinical trials. Production of Rx Princeps has been initiated and will be available to patients in the coming weeks. In fact, today, we got even more news on it, that Aphria's partner announced the first batch order sale of the Tetra Rx Princeps inhalation device as the first step towards the sale of Rx Princeps, which they announced today "will soon be launched under ACMPR through Aphria". They further state today that "we are expecting to generate around $1.5 millions in sales (of Rx Princeps) in fiscal 2018 and from survey analysis from their marketing efforts in the maritime provinces and Quebec are expecting about 8,000 patients for it in fiscal 2018.

Success Upon Success. Yes, Yet Another Major Announcement ... On Aphria's Cannabis Oil!
This is a growing, budding relationship. That's quite a lot of actions being taken by the pair. But wait, there's more. You say, There is? Why, yes, indeed! Tetra BP just announced on October 26th, 2017, a week after their Rx Princeps deal with Aphria, a new Phase IV clinical trial being done on cannabis oil. You won't believe it. I asked the company if the oils in the study were derived from their own Rx Princeps or from one of their partners. According to Tetra Bio Pharma's Anne-Sophie Courtois, DVM and Vice President Marketing & Communication, "the cannabis oils in the study involve a comparison of 3 different cannabis oils to a placebo in both neuropathic and non-neuropathic pain. The products being tested are not part of the pharmaceutical pipeline at Tetra but are part of the cannabis oils Tetra is selling through its partnership with Aphria Inc....", which is just one more layer of partnership together by two of the leading Canadian medical cannabis companies. Wow! Another Aphria deal with their biopharma partner Tetra BP.

A Key Goal Investors Will Love: Garnering Market Share:
Ms. Courtois went further in her reply and explained the main purpose of the cannabis oil clinical trial is to collect safety and efficacy data for physicians and other health professionals."  Keep in mind that less than 5% of physicians in Canada currently prescribe medical cannabis for that reason of needing the kind of data in these clinical trials. The Aphria-Tetra partnership is delivering that data to the health community from multiple trials. So Tetra is selling this cannabis oil that is mentioned in their Phase IV cannabis oil clinical study news and they are saying that it is their trusted partner Aphria's cannabis oil they are doing clinical trials on. So add to the list that now Tetra BP will be selling Aphria's cannabis oils and doing a Phase IV clinical trial on them as well.

The Market Has Not Awakened To All This News of Strategic & Tactical Importance:
This is really big news that the market hasn't really grasped; what you have is a major cannabis licensed producer that is highly successful at growing and selling their product, working with Tetra BP in multiple ways that will enhance both of their revenues significantly. It has the look of Aphria grooming Tetra in many ways to become a stronger than ever partner as sales begin to blossom. Clearly all these deals for the pair in partnership are meant to build out and build up Tetra's product sales as well as Aphria's. Aphria actually owns close to 10% of the Tetra stock, which means they benefit that way as well when Tetra benefits, too. They have many synergies that each is using to benefit the other, so you get a multiplier effect like 1 + 1 = 3 happening. Tetra is benefitting Aphria in many ways from clinical trials on dried product and extracts (or cannabis oils) plus doing the major packaging they way it's done at the pharmaceutical-grade level of packaging. Aphria is providing their guidance from their side of the business, plus the funding they invested in, plus they are seated on teh board of Tetra, plus they are marketing each other's products together. Very smart how it is being done. You have to commend them both.

As Tetra Conducts Phase IV Clinical Trial On Aphria Cannabis Oils, The Oils Also Will Be Sold:
Ms. Courtois went on to explain that "The use of the term Phase 4 is to communicate that the product is 'approved' for sale in Canada and that it is not a trial being performed to support a marketing application.  Phase 1, 2 or 3 trials describe the various stages of clinical drug development used to bring a new product to the market as a drug. Cannabis oil is 'approved' for sale in Canada under a law that makes the products exempt from all of the premarketing requirements required for a drug to be approved.  This is what the Canadian medical cannabis regulations are based on.  Tetra is not seeking a drug approval (DIN) for the cannabis oil so the trial is being performed to collect clinical evidence of the safety and efficacy of the products in order to address the medical community’s concerns over the lack of evidence to support its use in patients."

Yes, Yet Another News Item I Believe From This Aphria Tetra Partnership:
Unbelievably, there's even more. Asked was there any other clinical trial being conducted or prepped with partners or their own products, Ms. Courtois replied this week, "Tetra is also running a Phase 1 trial with cannabis oils in healthy volunteers to collect safety, pharmacokinetic and pharmacodynamic data.  It is a Phase 1 since the study involves healthy volunteers and offers no potential therapeutic benefit to the participants." Now I will venture a guess based on the timing of this information that this clinical trial once again is being done with Aphria, and that the oils are Aphria cannabis oils. Together these all add up to the buildout of an extremely strong relationship by the partnership that has many strong layers to it. This is a lot to digest, guys. It brings a new context and perspective to your analysis of Aphria and how it works with its partners, especially with close partners it owns shares in.  It should awaken readers to the opportunity the venture is going after and help you to consider an investment therein.

Conclusion:
They expect just from sales of Rx Princeps to have $1.5 million in 2018. This does not include all the other sales and distribution efforts with dried cannabis and cannabis oils mentioned above. We will have a lot of surprises to the upside of that figure in 2018 due to all the new streams of revenue that are beginning now. They expect 8,000 patients by the end of the fiscal year. . If we say $50 a month average usage to be conservative, then that's $400,000 from 8,000 patients. If we say $100 a month on average usage, that's $800,000 a month in revenue thry would be bringing by the end of the 2018 fiscal year just for Rx Princeps. If it is covered by insurance, a patient might average 1 gram per day, and divide that out into two or three smaller portions to take morning, afternoon and night. Thirty grams at $8 a gram would cost $240.00 a month. Half that amount used would be about $120 a month. Saying just $50 a month on average would mean 8,000 patients times $50 a month for a total of $400,000 a month, as might be the conservative estimate. And remember, if they do gain 8,000 patients for Rx Princeps this year, then they should have no problem adding another 8,000 the next year to bring that number up to 16,000 patients. At $50 a patient on average, that would give a reasonable expectation of $800,000 a month in revenue. If their marketing and partnership efforts are very good and well received, they could leave these numbers in the dust. And don't forget, this is just for Rx Princeps. They all also doing sales for all kinds of other things including their own things and the cannabis oils of Aphria. So this has all the makings of a very, very, VERY successful partnership for Aphria.

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