After spiking to record highs of $2.46 a share, Pivot Pharmaceuticals Inc (OTCMKTS:PVOTF) immediately felt the wrath of short sellers who triggered a 50% pullback. The bearish run is, however, starting to show signs of weakness, presenting a unique buying opportunity for investors who missed out on the initial run.
The management team has already taken a swipe at the market decline, which it states has come at the back of no material change in Pivot’s business plan. According to the team, the company continues to successfully execute on its business strategy, with focus on product development.
Discussions are also underway on potential acquisitions and joint ventures that the company believes will help accelerate the next phase of growth.
Pivot Pharmaceuticals is still trading in an uptrend, despite a steep decline from record highs. The pullback could be a minor correction from which buyers would join and push the stock higher from current levels.
In our view, the stock needs to close above the $1.50 mark to affirm the long-term uptrend. A close above the key resistance level could see the stock making a push for its 52-week high. On the downside, the stock faces immediate support at the $1 a share handle, below which it faces the risk of plunging to its 52-week lows of $0.05 a share.
What Does Pivot Pharmaceuticals Do.?
Formerly Neurokine Pharmaceuticals, Pivot Pharmaceuticals is a development stage biopharmaceutical company. The company specializes in the development and commercialization of therapeutic pharmaceutical products.
The company also engages in research and development activities, focused on advancing drug candidates for the treatment of women cancers. In addition, the company has sought to diversify and expand its business portfolio, by pursuing opportunities in the marijuana sector.
The spike in share price experienced early this year was as a result of investors taking note of the company’s push for growth opportunities in the legal cannabis space.
Pivot Pharmaceuticals has been aggressive on the merger and acquisition front, as it seeks to be a key player in the legal cannabis space. The developments stage company has already completed the acquisition of ERS Holdings LLC.
The acquisition paves way for the company to gain access to patented technology, ‘RTIC’ Ready to Infuse Cannabis that enables the transformation of cannabis oil into powder for infusion into a variety of food and beverage products.
ERS Holdings has also filed a number of patents that detail a way of combining cannabis powder with other health and wellness products such as sleep aids and cold medications.
According to Pivot Pharmaceuticals CEO, Dr. Patrick Frankham, the acquisition of ERS holdings is of great importance as it comes at a time when the food and beverage industry is experiencing a lot of transformation. Cannabis infused drinks look set to substitute a number of drinks, Molson Coors having acknowledged that legal cannabis is a big risk.
“With this acquisition, we have positioned Pivot to be at the forefront of this enormous new market. Closing this transaction will enable us to further engage interested parties to work with us on developing the full potential of these Patents. Pivot intends to monetize the Patents as quickly as possible,” said Mr. Frankham.
In addition, Pivot Pharmaceuticals has entered into an arms-length non-binding letter of intent as it seeks to acquire Agro-Biotech Inc. The acquisition target is a Health Canada ACMPR licensed producer, which would further enhance the company’s footprint in the cultivation and production of cannabis.
Upon completion of the transaction, Pivot Pharmaceuticals is to invest $15 million for the development of Agro-Biotech business. The acquisition will allow the company to become vertically integrated, with the ability to control the entire manufacturing process from seed to derivatives.
Agro-Biotech is currently eyeing a Dealer’s License, which if issued will allow it to extract and sell oils and isolates. The company will slow be able to supply patients with dried cannabis, a move expected to strengthen Pivot Pharmaceuticals revenue stream.
“With this acquisition, we are well positioned to enter the Québec cannabis market and attract experienced scientists to our organization. Pivot will seek to expand its footprint in the province beginning immediately following financing activities which are underway,” said Mr. Frankham.
In addition to being active on the acquisition front, Pivot Pharmaceuticals is also aggressively strengthening its Intellectual property portfolio. The company has already filed three provisional patents related to the delivery of cannabinoid-based products.
What Does the Future Hold for Pivot Pharmaceuticals?
There is no doubt that Pivot Pharmaceuticals has been unfairly judged in recent weeks, given the milestones achieved in pursuit of growth opportunities in the cannabis space.
Unlike other companies in the space, Pivot Pharmaceuticals boasts of a world-class patent portfolio and industry-leading pipeline supplemented by experienced scientists and developers.
That said, the company remains well positioned to flourish as it moves to produce effective and stable products for health-conscious consumers.
Disclosure: We have no position in PVOTF and have not been compensated for this article.