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Markets Have Missed This Key Q BioMed Inc (OTCMKTS:QBIO) Update

Markets Have Missed This Key Q BioMed Inc (OTCMKTS:QBIO) Update
Written by
Chris Sandburg
Published on
June 12, 2017
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Q BioMed Inc (OTCMKTS:QBIO) is one of our favorite under the radar biotech plays. The company is a relatively young (formed by way of an early 2015 name change to a company that had previously been founded in 2013) healthcare stock focused on oncology associated pain management and various ocular conditions.Right now, it’s lead asset is something called SR-89, which is a reformulation of an already very well established pain management asset called Strontium Chloride. The latter is mixed with toothpaste and used as a treatment for the pain associated with bone metastases. More than 70% of patients with advanced breast and prostate cancer metastases will develop bone metastases and they can be incredibly painful. Chronic pain management is necessary and – outside of the Strontium Chloride asset – the current standard of care therapies are opioid-based. As the US healthcare system increasingly shifts away from opioids as a pain management tool, companies are trying to bring assets to market to meet this shift, and that’s exactly what Q BioMed is doing with SR-89.For those new to this story, the company picked up the license for the asset last year and has spent the last twelve months or so getting it ready for market. We highlighted the initial commercialization run as potential major catalyst the last time we covered the stock, and as per the company’s most recent announcement, this run is just around the corner.Management noted on June 7 that the company has initiated production of the drug and that it expects to provide more information regarding initial commercialization in the coming weeks. When this information hits press we should get some insight into the size of the initial run and – in turn – its potential impact on the company from a financial perspective.Management hasn’t spoken as to how it intends to price the drug, but we’re not expecting anything particularly premium. Sure, it’s a reformulation, but the active compound is generic and prices out at less than $10 for 100g. With that said, for an asset like this, price doesn’t need to be high for it to command a pretty decent level of revenues. There are around more than 250K new diagnoses of invasive breast cancer annually in the US alone. There are more than 160K new diagnoses of prostate cancer. With 70% or more of these developing the metastases that this drug covers, and with the current standard of care having associated with it some key deficiencies, there’s plenty of patients for the company to go at right out of the gates.A $4 million funding closed out mid-April so there’s cash in place to get the commercialization of the asset kick started, but chances are we’ll see some degree of raise between now and the end of the year. There’s a secondary development asset called Man-01 that is earmarked as a glaucoma drug, and as this moves along its development pathway costs associated with the program are going to contribute to burn.With that said, there are a couple of points in place that mitigate this potential for dilution. First, the glaucoma asset should bring with it numerous development-related catalysts and – as they hit press – these catalysts should translate to some upside action (assuming, of course, that the drug works).Second, and more important from our perspective in terms of de-risking this company as an exposure, is the fact that Q Biotech has a revenue generating asset (the above-discussed cancer drug) that should serve to provide a steady stream of bread and butter type revenues for the company. These revenues should foot the R&D bill and reduce the raise based burden placed on shareholders. In the development stage biotech space, this is a rare thing, and it sets Q Biotech apart from some of its same-size peers.We will be updating our subscribers as soon as we know more. For the latest updates on QBIO, sign up below!Disclosure: We have no position in QBIO and have not been compensated for this article.

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