Vitality Biopharma Inc (OTCMKSTS:VBIO) is a stock that should be followed closely.
The stock price has been somewhat static between March 2017 and September 2017, after a fall in price from $4 to $1.5 between December 2016 and January 2017.
The stock’s price movement is shown in the graph below:
Between March 2015 and March 2016, revenues dropped by over 32%. The quarterly financial results showed plummeting revenues, further inducing the drop in stock price although at an unsteady pace.
Recently however, Vitality Biopharma has been credited with discovering technology that can modify cannabinoids in order to create pharmaceutical prodrugs that have no psychoactivity and are able to provide targeted disease treatment. Simply put, the company has been able to develop a cannabinoid drop that has a much reduced effect on the central nervous system.
According to the CEO Robert Brooke, “With our cannabinoid pharmaceutical program, we are quickly moving from ‘bench to bedside’, so it’s important to recognize technical milestones like this one that have enabled and sped our progress, our team first pioneered enzymatic biosynthesis methods for cannabosides and now has made their production far more efficient and scalable.
For readers who would require some information on Vitality Biopharma, here is a brief profile of the company.
Vitality Biopharma Inc was previously known as Stevia First Corp, an agricultural business which cultivated stevia (an alternative product for sugar). Over time, the firm’s research team has made a number of innovative discoveries which could advance the pharmaceutical industry, causing the firm to expand its operations to include the development of pharmaceutical drugs and change its name to “Vitality Biopharma”. Vitality Biopharma has filed for key intellectual property related to the technologies they have developed and is seeking to commercialize them through joint ventures.
Vitality Biopharma announced that it closed a $1 million private placement on July 28, 2017. The company entered into a securities purchase agreement in a private placement of an aggregate of 666,667 shares of the company’s common stock and warrants to purchase up to an aggregate of 333,334 shares of the company’s common stock, at a price of $1.50 per share. Each warrant could be exercised immediately, and expires after three years on the three year anniversary of the date of issuance, and has an exercise price of $2.00. The company announced that it plans to use the capital raised from the rights issue to fund further cannabinoid pharmaceutical research and development projects and for similar general corporate purposes.
Earlier in July, the firm announced a new class of cannabinoid prodrugs it had developed, known as cannabosides, which upon ingestion could be targeted and limited to the gastrointestinal tract, thereby avoiding drug psychoactivity and unforeseen side effects. During tests, these cannabosides were able to reduce weight loss, decrease damage to the colon, and improve gastrointestinal health compared to the placebo controls. Vitality’s cannabosides are also able to treat colitis, which is regarded as quite an achievement in healthcare.
Independent clinical trial results also indicated that the cannabinoids could be used in inducing remission of drug-resistant IBD (Inflammatory bowel disease) with only eight weeks of treatment while it is also especially useful for pediatric applications. According to the Crohn’s & Colitis Foundation of America, approximately 1.6 million Americans currently have IBD and including as many as 80,000 children.
Vitality Biopharmarecently filed intellectual property applications including strong composition of matter claims for more than 20 cannabinoid prodrugs, including versions of THC (Tetrahydrocannabinol), CBD (Cannabidiol), and CBDV (Cannabidivarin), demonstrating its medical ability to create a proprietary prodrug of every significant cannabinoid pharmaceutical available today.
After a few years of using debt as its main source of financing, VBIO has taken steps to restructure its capital. Interest expenses between 2013 and 2016 have been reduced by 99.99% and total liabilities are less than assets for the first time in five years. This positive equity reduces any likelihood of bankruptcy.
Retained Earnings declined by 41% between 2016 and 2017, much higher than the 1.3% decline in the previous year. Although retained losses are often a sign of aggressive growth, the firm has taken steps to control its losses by reducing its liabilities and interest expenses. With the expectation of increased revenues due to its recent innovation, VBIO could begin to produce more positive results from the next quarter.
VBIO’s lack of profitability has not affected its liquidity position as it currently has cash and short term investments worth $1.15 million. At the end of June 2017, its current ratio was as 1.48. This level of liquidity puts the firm in a position to fund its research and invest in viable opportunities for expansion or diversification.
CNA Finance Chief Research Analyst, Kenny Soulstring was quoted saying “Vitality Biopharma is a unique and emerging opportunity for investors searching for viable companies within the medical marijuana space, unlike many of the small cap marijuana stocks that serve up overly optimistic forecasts and hype-filled press, Vitality is already positioned to benefit from case study analysis, unique prodrug delivery methods, and proven potential best-in-class treatment in addressing the debilitating symptoms of both IBD and NBS.”
The quarterly financial statements released by the company in March 2017 and June 30 2017, revealed declining revenues compared to the last two quarters. However, expectation is high that results will improve considering recent developments by the company. This is shown by the continuous rise in the stock price from $1.3 to $1.6 in the last few days. It is expected that the stock’s value will remain on the rise as the market becomes more aware of its potential.
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Disclosure: We have no position in VBIO and have not been compensated for this article.