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MightyMaven (< 20)

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Cannabis Enters Pharmaceutical Phase III Trials



July 10, 2017 – Comments (0) | RELATED TICKERS: PFE , NVS , APHQF

Cannabis Investing 101:
Investing in Cannabis stocks is to invest in a relatively new and thriving field, literally, and with every industry there are things you want to look for to guide where you want to invest and not invest. The requirement for good investing is to do both broad-based and specific due diligence, which is to say, do your own research looking at specific investments within the overall contexts of industry and stock markets. And by all means, judge what you read about a stock or industry using balance, not focusing on one element but many, and using care to reflect on what writers are saying, but not accepting what they say in a passive 'spoon-feed-me' manner, but get active in your thoughts and play some point and counterpoint, as is done when a team provides brainstorming feedback intended to stimulate creativity as well as highlight positive and negative potentialities.

Critiquing All Articles, Authors, Research You Review:
One recent example of critiquing a writer objectively:
This June 2017 one writer pointed out that US Senators Booker (D), Gillibrnad (D) and Paul (R) introduced the CARE/RS ACT of 2017, which stands for Compassionate Access & Research Expansion (for patients) and Respecting States (rights). The writer reported correctly the bill seeks to change the Controlled Substances Act so marijuana and THC would be reclassified as legal drugs that have medical value and uses, such as for PTSD, muscle spasms from numerous diseases and conditions, epilepsy, glaucoma and chronic pain such as from end-stage cancer, and traumatic brain injury (TBI), among many other conditions. But if you read passively, you missed that he confused the term Schedule 1 with Schedule 2. The bill would actually move cannabis from its current Schedule 1 status to Schedule 2 status, not the other way around as the writer stated. Current scheduling states that cannabis has zero medical value, and we know it indeed does have value... straight from the United States National Institute of Health (NIH) website showing tens of thousands of independent research studies confirming the value of cannabis and its cannabinoids for several decades; and clearly the preponderence of scientific evidence is in on that point. So watch for simple errors by writers because sometimes they end up saying exactly the opposite of what they were trying to say. Errors can also take on a life on their own, and, in fact, this article also appeared in another cannabis news website compounding the mistake.

Due Diligence is Constantly Necessary and Takes Time:
Now if you were doing your due diligence, you would have looked up DEA drug scheduling and discovered the error by the writer. You might have also known the NIH as well as the Mayo Clinic should have great information on the facts about the usefulness and R&D developments & clinical trials on cannabinoids, which favors, even necessitates either rescheduling or complete removal from scheduling. It's about taking an active role in critiquing what you are reading. You might have checked the website information from reputable pharmaceutical cannabis companies in Canada (looking at their partners, management and board leadership to determine reputability) and see what they had to say about the need for rescheduling cannabis and about any clinical trials being done on cannabis. Your research could have found out how Tetra Bio Pharma in Canada is the first pharmaceutical company in the world to be holding clinical trials on dried smoked or vaporized cannabis through Health Canada and the U.S. FDA. Successful Phase III trials will allow patients to get reimbursement from insurance companies and approval from medical doctors who want specific, exacting, clinical testing under HC and FDA done before they will prescribe or even just advise patients to try cannabis for their conditions.

Quality Research is Indispensable:
According to a comprehensive research report by Azoth Analytics, which analyzes the fascinating Tetra Bio Pharma ($60M) along with nine major pharmaceutical enterprises: Endo Pharmaceuticals ($2.5B), AstraZeneca ($82.86B), Novartis ($185.475B), Purdue Pharma (Private, Top 20), GSK ($101.269B), Allergan ($81.0B), Boehringer-Ingelheim (Private, Top 20), Sanofi ($112.045B), and Pfizer ($199.45B), and created through extensive primary research (inputs from industry experts, companies, stakeholders) and secondary research, and the report being titled “Global Pain Management Drugs Market: Analysis By Type (Opioids, NSAIDs, Anti-Migraine, Anticonvulsants), By Application, By Region, By Country: Opportunities and Forecast (2011-2021)”, the global market is projected to display a ROBUST GROWTH represented by a CAGR of 4.96% during 2016– 2021, CHIEFLY DRIVEN BY large number of drugs in pipeline, rising number of chronically ill patients, NEW REFORMS AND REGULATIONS IN THE CONSUMPTION OF MEDICAL CANNABIS...." According to the report and answering why it is in the report, Tetra is the only company developing dried marijuana as a drug. You can't buy your way into a report like this. Each of these companies in the report obviously has copies of the report and are well-read on all their compeititors and partners in the report, and thus are fully aware of what makes Tetra Bio Pharma worthy of entry into the report. Add to this that on the heels of this report, Tetra Bio Pharma was invited to participate in the world's leading pharmaceutical conference, this year in San Diego, called Bio International. There, the company stated they met with no less than thirty pharmaceutical comnpanies, including three of the majors. This report would be one reason why they were invited.

That is a tremendous first mover advantage for Tetra and major analysts are beginning to take notice, such as those who created this expensive, extensive report. Indeed, Tetra Bio-Pharma is the one and only company in the world conducting clinical trials on dried cannabis as a prescription drug and they are now entering into their Phase III trials in Q4 2017, prepping with all the right parties in government, medicine, pharmacies and research in order to initiate this major trial using both a titanium pipe and also a vaporizer along with a standardized amount of cannabis made exactly with the same cannabinoid ingredients and their levels in each and every dosage by Aphria, the Canadian licensed producer considered the lowest-cost and most profitable producer in Canada. Tetra Bio Pharma and Aphria have been working closely together on the development of Tetra's PPP001 dried cannabis product used in the trials, plus this is the cannabis strain that they are working to eventually be approved for prescription use by patients. A really big deal about it I would point out today is it will make medicinal cannabis prescribed by medical doctors an insurable medicine for their cancer pain patients, and that will lower the cost for patients all across the United States and Canada, who are now paying out of pocket for their medicinal needs. The market potential in the USA alone is 4 million patients for the cancer patient pain market estimated at $5 billion annually. The product will be expanded to other conditions like chronic pain as well. But they are focusing first on those with the greatest need for pain relief. I would add here another wonderful thing about the Tetra Bio Pharma vision can be found in their recent press release on entering the veterinary pharmaceutical industry.

Maneuvering Clinical Trials Through Health Canada and the U.S. FDA:
Led by Tetra Bio Pharma's Master Herbalist and Chief Medical Officer, Dr. Guy Chamberland, with some twenty years of success in bringing drugs through clinical trials and to the marketplace, with deep experience and relationships with Health Canada and the US FDA, working step in step with them on this in preparing the right clinical trial roadmap, they've had very strong success in their prior clinical work and continued success is expected in Tetra's Phase III clinical trials. So if I wasn't somehow clear before, this means the likelihood is high for successful Phase III trials, especially when you add to Tetra's accumulated scientific results all the confirming, positive anecdotal evidence from medical cannabis patients worldwide. Therefore, they expect Phase III trials will continue to confirm the positive benefits and rewards noted, doing so in scientific terms under strict clinical control procedures under continual guidance of the health regulatory authorities in Canada and the US. They have an excellent roadmap with specific and clear guidelines, and on successful completion, Tetra Bio Pharma's product will receive a drug identification number (DIN) from Health Canada and the U.S. FDA, and doctors will be able to write prescriptions for PPP001 (under the name for it not yet publicly released) and patients will have insurance coverage paying for it. Medicinal cannabis is already a disruptive product when considered especially among opiod drugs like Oxycontin that have proven to have dire consequences for patients as well as the strains placed upon cities and states dealing with that crisis through greatly increased expenitures for policing, health care, drug rehabilitation, criminal justice expenses including costs of housing offenders, and not to mention the loss of lives.

Due Diligence Requires Good Technical Analysis & Statistics Skill :
Technical analysis on Tetra Bio Pharma (CSE:TBP, OTCQB:TBPMF) looks good. The RSI is around the 50 level, the stock price is basing around the 20, 50 & 100 day simple moving averages at $0.60 USD. The Coppock Curve continues to show the stock in an overall uptrend: use weekly settings of 60,48,44. The stock really started capturing attention during the US Presidential elections in September and October 2016, when the company realized its first real trading volume, which was theretofore non-existent. In calculating percentage increasing over the last year, as a statistician, I would throw out the outlier data preceding mid-September as you need volume to validate a price, and typically when a company is unknown with no volume, with the risk of being an unknown stock, the price is going to be be undervalued. As soon as some regular volume came in, though, the price immediately moved up. Also in conjunction with this using Price by Volume, you see the same thing that the number of shares sold prior to mid-September was very insignificant statistically. This same thing can be seen when you notice a stock spike way up for the day on a few shares in after-hours trading or maybe an odd lot of 50 shares got purchased way over the market; these are both considered outliers and not the norm, then. So, in making a more educated calculation of percentage price increase, I would use the October 2016 price area of about $0.20 USD, which shows you the increase to today's $0.60 USD is right at 200%. There's much more validity and soundness to that assessment that incorpating the low, insignificant outlier prices and coming up with something like a 2000% increase, which is not realistic at all. But had they had very strong volume during those days they first traded, then you would want to use them. So that period is not germane to the equation. This is one reason why Aphria took about a 10% stake at $0.15 and $0.20 per share late last year, and Aphria's CFO, in charge of such investments, is one who knows how to value an enterprise, especially one in their industry, having served as a past Chair of both the Canadian Institute of Chartered Business Valuators (of which he holds a Fellowship) and the International Association of Professional Business Valuators, all which reinforce what I am saying on Tetra's price.

Proper Perspective is Critical in Making Statistical Judgments:
Another point I'd like to make on trends relates to Tetra as well. One writer speaking on certain stocks, including Tetra, mentioned Tetra and another MMJ stock had risen significantly above the percentage of the others in the group he was watching over the last last few months when that article came out. On the face of it, that can seem to make one's point that it was overpriced; however, that's not necessarily true. There's something called the Dogs of the Dow. You may have heard of it. Typically when there is a move up in the DOW, not every stock in the DOW will move up. Buyers of the DOW who got in on the first move often take profits at their usual percentage or price gain, and will look at the laggards in the DOW that haven't yet made their moves up, and then invest profits in those. In particular, followers of Dogs of the Dow theory will readjust their portfolio annually reinvesting in the highest dividend-yielding stocks. This can also be done with a group of stocks in any industry, to ride the big movers, take profits and look through the remainder stocks for where you might want to find a pick that should have gone up, that was maybe even a better buy than some of the other movers, and plant your profits in there. Industry momentum trading is similar to this. Now when you see that, the first movers are going to have some retracement going on because of the profit-taking and the ones dogging it are going to be going up at that same time, give or take a few days or weeks. So it would be unfair to compare the two groups of DOW (or other groups) as if they were all apples instead of apples and oranges. Obviously, as the Dogs catch up on the gains they missed out on, if you do a short term timeframe, it's going to look like the Dogs outperformed and are leading the first movers, and that's not the case. They are not leading; they are playing catch up. You can think of the pistons of an automobile, that when one is going up, the other is going down, so in an 8-cylinder you will have 4 moving up and 4 moving down, yet they are all part of the same cam shaft moving each one. So one must watch when someone throws percentage gains of the last three months at you, because that is statistics, and as they say, you can say anything with statistics; but ... not all things said with statistics are sound, valid, or reasonable, and therefore, can be misleading you out of or into an investment the opposite direction you might want to go.

Research & Develpment Stage Companies: Should You Judge Them by Sales & Earnings?
Others will point out some of the pharmaceutical cannabis stocks have no earnings, have no sales, and are generating no cash flow. To ask this of a new pharmaceutical R&D company is simply not fair. The fact is, there are many pharmaceutical companies in R&D stage that trade over $10 and $20 a share or more, and are priced in the billions, and yet they too have no sales, no earnings, even negative earnings. How do they do achieve such a price without sales and earnings? To properly invest in a new public company or a startup, you must be able to ascertain the opportunity and the likelihood of success, and approach them as a startup investor, as a venture capitalist, would do when they take a position in a company that maybe hasn't even decided on what name they will use yet, but they have a great technology. With Tetra, not only do they have great technology, they have great partnerships in government that cut their costs of research, they have the right research & development partners, they are affiliated with the right universties to accomplish their goals, again in a very cost-effective, synergistical way that is producing the fruit they intended them to produce. Add to that, first of all, a very wise move by Aphria to partner up, to take a stake in them, to place their own CFO on the board of Tetra Bio Pharma, and then Tetra adds the head  of Panag Pharma to the board. At that level, these positions are not taken without all the necessary and proper due diligence and only after determining the likelihood of success is greater than probability would dictate is by chance, that is, not due to random chance luck, but is probable. It takes the right people in the right places to produce the right things necessary to success and this is why Aphria has made a further arrangement, their partnership expanding with Tetra, to have Tetra market and sell their products in the Maritime Provinces, and then, on success of that, the rest of Canada. Aphria, the first cannabis company in Canada to achieve profitability in a quarter, and in all the last five quarters too, is assisting Tetra to achieve profitability, and they are a great mentor for that, having proved their capability every quarter we have seen of them, and that's who you want in your corner, a winner like that. The distribution contract is a bigger deal that the market has made out of it. It advances them into an immediate producer of Sales & Earnings of a great product at a great price compared to other licensed producers. You can believe that Tetra is doing all to ensure the success of that distributorship and all indications I see are it is going to be very profitable for Tetra and Aphria... and for all the other TBP shareholders. I will venture a guess as to who the partner is Tetra was speaking about when they said one of them was interested in their Licensed Producer application, now in Stage Three ... Aphria. They have not revealed who it is, but I would guess that's a good extra reason for their CFO coming onto the Tetra board. Always follow the smart money. In this industry, Aphria is proving to be the smart money. And they are in the corner of Tetra Bio Pharma.

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