We need to congratulate the readers who checked our article on TETRA BIO PHARMA Inc (OTCMKTS:TBPMF), the medical marijuana company. It was published in June 2017 and noted very good points about this microcap runner. We stressed the FDA approval of the drug candidate PPP001, the hiring of new personnel, and its good financial shape. We concluded remarking that good announcements could make the share price run.
We were not wrong.
The share price has more than doubled since our article was released. From trading around $0.6, it increased to cross the one-year highs of $1.25. Also, it seems that the momentum in the share price accelerated in December and January, and many in the market wanted to join the party. We made this impression after remarking the incredible amount of shares that changed hands recently.
Check the following stock chart, assess the most recent share price action, and form your own opinion:
For those who don’t know TBPMF, let us revisit the business model. The company was established on May 17, 2007, in Canada after the merger between GrowPros MMP Inc. and 9048073 Canada Inc. It is headquartered in Orleans, Ontario, and focuses on the research and development of cannabinoid-based drugs and treatments for the patients and their healthcare providers.
Most Significant Agreements and Transactions
As mentioned in our previous article, one useful feature of TBPMF is that it collaborates with many third parties. They bring new know-how to the company. Thus we need to revise their names closely. Please note some of the most remarkable agreements signed in 2017:
– On July 19, 2017, TBPMF released a letter of intent with Constance Therapeutics, Inc. of San Francisco, California. The DNA was signed on December 13, 2017, which made the share price spike from $0.55 to close to $0.7.
– On August 31, 2017, the company released information about its collaboration with the University of New Brunswick.
– On September 20, 2017, a letter of intent with a major player in the healthcare specialty industry was released. It seems to be large, and was said to own a pan-Canadian distribution network with up to 7000 specialized healthcare professionals, and has access to over 3000 specialized healthcare businesses in Canada. Please note that the share price increased from $0.54 to $0.59 as a result of this news.
– On September 28, 2017, AES Environment Group signed an agreement with TBPMF for the commercialization of PPP001.
– On October 18, 2017, the company signed a deal with Partner Aphria. Under Access to Cannabis for Medical Purposes Regulations, TBPMF will help in the promotion of Rx Princeps(TM), and its medical cannabis blend.
– On September 28, 2017, it released a non-binding letter of intent with a private Canadian corporation. Under the agreement, the company will receive $350,000 to fund its clinical trials. The company may also monetize GrowPros MMP Inc., Tetra’s wholly-owned subsidiary.
– On December 21, 2017, it was released that Tetra will acquire all the remaining issued and outstanding common shares of Tetra’s subsidiary, Phytopain Pharma Inc., for an aggregate purchase price of $12,425,089. The share price was $0.66 when this press release was put out. Just a few days later, it touched the $1.25 share price level.
We wanted to list almost all the agreements signed in the last seven months to show the outstanding work done by TBPMF. Regarding the transactions, there are three points to be made. First of all, the company seems to be becoming a big and known player in the industry, as many competitors are interested in collaborating with TBPMF. Also, the company is acquiring business interests in other projects, which means that TBPMF is expanding at a high pace. Finally, it is essential to note that the letters of intent represent a significant catalyst for the stock price. If a definitive agreement is reached and the deal is significant, the stock price could spike up. We believe that this is an opportunity.
Research and Development
Regarding the R&D activities of the company, we need to mention the following developments.
It was noted on June 28, 2017, that TBPMF would be commercializing novel cannabinoid-based formulations for the treatment of pet conditions. In our opinion, the company was smart and fast in deciding to do so. We have identified other marijuana operators doing the same thing, but some months later. Also, it was also noted that Tetra is well suited for operation in the veterinary drug market because the “ACMPR was created to allow human patient’s access to medical marijuana and does not provide any measures to allow testing of cannabis or cannabis-derived products in pets.”
Regarding the new commercialization, it was noted in November that Tetra was partnering with a major manufacturer of controlled active pharmaceutical ingredients in the US for the manufacturing of Dronabinol XL AdVersa®. Also, the company was said to be accelerating its plans to submit a 505(b)(2) New Drug Application for the treatment of chemotherapy-induced nausea, vomiting, and anorexia associated with weight loss in patients with AIDS. The market being targeted is huge; it will reach a valuation of $1.88 billion by 2020. The company noted that it could obtain as much as $30 million by the end of the third year of sales of the new product.
Finally, another very significant development was released on January 16, 2018. The company released that it had received a No Objection Letter from the Therapeutic Products Directorate, Health Canada, to evaluate the safety, pharmacokinetics, and pharmacodynamics of its cannabis oil PPP005. It is excellent news, as this new trial represents the first step in Tetra’s plans to commercialize natural health products. Revenues from this product could be given to the shareholders soon.
For starters, the company owns drug candidates under development. The most important is PPP001, which we assessed in our previous article. It is currently in phase 2 of development. The new information about this candidate is that the company has accepted the suggestion of Health Canada to change the order of its clinical trial application review process. This is what you need to know:
“The quality certification for the manufacturing of PPP001 will take place prior to the approval of its clinical trial protocol as Health Canada assesses its partner Aphria’s operations for Good Manufacturing Practices (GMP) for pharmaceutical products. Tetra agrees to this change from Health Canada because it is in the best interest of patients.” Source
For those who will be monitoring the announcements, in the press release, it was remarked that “the phase 3 trial should begin in early 2018.”
Check the following table from the website, which includes other candidates and the company’s R&D plan:
Currently trading with a market cap of $162 million, TBPMF is an exciting story among small caps. Still not reporting revenues, but with a right amount of cash on the balance sheet, $1.6 million, $2.6 million in total assets and almost zero liabilities, the company is very well equipped to keep the innovations running.
To sum up, this is a stock to be monitored continuously!
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Disclosure: We have no position in TBPMF and have not been compensated for this article.
Image courtesy of Jurassic Blueberries via Flickr