The recent stock performance of Propanc Biopharma Inc (OTCMKTS:PPCB) has not fulfilled the expectations of the market. Over the past year, the price has dramatically plummeted and management has been at a loss as to how to stop the fall.
Recent news regarding repayment of debt and new patents has improved the firm’s outlook, and it is anticipated that its performance might just be on the way back up. Take a look at the price action below:
Business Profile and Catalysts
Propanc Biopharma was founded in 2007 and is headquartered in Camberwell, Australia. The company has developed a formulation of anti-cancer compounds designed to control or prevent tumors from recurring and spreading throughout the body using proenzymes, which are inactive precursors of enzymes.
Take a look at the following video, wherein the CEO explains what they have achieved and what they are expecting in the new year 2018. Be sure to note that they are trying to uplist to major stock exchange in the near future:
The most important preclinical drug candidate is called PRP, which “is an enhanced pro-enzyme formulation designed to enhance the anti-cancer effects of multiple enzymes acting synergistically.” So far, the filing of patents has been quite successful. It has been granted and is currently in force in the United States, Australia, China, Japan, Indonesia, Israel, New Zealand, Singapore, and South Africa. In addition, the Europe patent application has recently been accepted.
What’s about to be released?
As usual, what’s important for us is what’s about to come. According to documents provided by PPCB, in 2016 and 2017, the company filed other applications under the Patent Cooperation Treaty, which could lead to patents for an invention in over 150 countries. In our opinion, this is quite a good catalyst for the stock price. Think about it. Given that many countries have already granted patents to PPCB, it should easily receive the Patent Cooperation Treaty soon, which could multiply the potential revenue source in the future. Check the following table for further information:
As said, while the stock performance of PPCB has not exceeded expectations, the company has been working in the right direction lately. First of all, PPCB began the year 2018 repaying $4.2 million of the $4.7 million in senior secured debt originally borrowed from Magna Invests. In our opinion, the repayment of debt is quite positive and will help the company raise capital for the First-In-Human study in 2018. We fully agree with the words of the CEO:
“I am pleased with the opportunity to repay all of our most onerous debt, including all outstanding secured debt, in full, as it helps us gather some momentum in our efforts towards attracting long term investors to support our plans to progress our lead product, PRP, into clinical trials,” said James Nathanielsz, Propanc Biopharma’s Chief Executive Officer.
With that in mind, we need to remind that according to GBI Research, the company is targeting a market segment of $14 billion in 2020. If PPCB is able to grab a small amount of that market, we will be expecting the share price to rebound seriously. In our opinion, seeing the first revenues will take time, as the company will need to work with the FDA and the process is long. However, in 2018, we will receive the data from the First-In-Human study, and it could make the share price run.
There is another interesting fact that we appreciate. More executives are interested to work for PPCB. The last person was Mr. Alan Morell, who is now the Senior Strategic Advisor and will focus on branding, growth strategy, and market positioning. He was presented to the market with the following words:
“Alan is highly respected on Wall Street within the Microcap sector and has excellent contacts across all Media. We look forward to maximizing the exciting growth potential of the Company with Alan’s involvement, as we advance our lead product, PRP, towards a First-In-Human study in 2018.” Source
What’s our take? We appreciate his past experience, and we need to mention the following. The fact that PPCB is hiring a Wall Street professional means that the company wants to strengthen its relationship with investors. It is very positive. In our opinion, he knows very well how to please the market and better stock performance can be expected.
There is more.
On February 20, 2018, the European Patent Office granted a patent application covering a pharmaceutical composition for treating cancer comprising of trypsinogen and chymotrypsinogen. We don’t really understand why the market did not react to the announcement. We believe that it is quite beneficial for PPCB, which is seeing how potential revenues are increasing every month.
On March 14, 2018, the company also released the successful reproduction run of the manufacturing process for the Company’s two drug substances namely trypsinogen and chymotrypsinogen:
“The successful reproduction run demonstrates scalability of Propanc’s proprietary manufacturing process to enable routine production of the two active substances for the Company’s lead product candidate, PRP. The process was developed in collaboration with a European Contract Manufacturing Organization (CMO) experienced in the production of biopharmaceuticals.” Source
As a result, the company requested scientific advice during a meeting with the MHRA to update the agency about its progress. We will need to stay tuned in the next months, as new developments could be released after these meetings take place. We continue to see that the moment is now for PPCB, thus we will stay tuned.
In the following months, we will be expecting information from the following events. Firstly, the company will have the meeting with the MHRA in order to prepare an Investigational Medicinal Dossier for PRP, which will contribute to the preparation of a Clinical Trial Application (CTA) for a First-In-Human study. Additionally, we will be waiting for information about the GMP manufacturing process of PRP for human studies. Finally, the company will have to inform the market about the analysis of the two proenzymes (trypsinogen and chymotrypsinogen) and their activated enzyme forms (trypsin and chymotrypsin) from the PRP formulation by Liquid Chromatography-Mass Spectrometry. This new information will determine the following steps towards the future Phase II clinical studies in pancreatic and ovarian cancer patients.
Currently trading with a market cap of $2.7 million, PPCB is an exciting story among small caps. With a total amount of shares outstanding equal to 29 million and a float of 6.4 million, a lot of volatility can be expected. That’s the only caveat that we see in the name. Big market orders could move the share price quite a bit, thus be ready for large price swings.
To sum up, there are a lot of catalysts on this name, so it should be on your radar.
Disclosure: We have no position in PPCB and have not been compensated for this article.
Image courtesy of HCC Public Information via Flickr.