Nemus Bioscience Inc (OTCMKTS:NMUS) Is Capitalized And Poised To Run

Development stage biotechnology company Nemus Bioscience Inc (OTCMKTS:NMUS) just announced that it raised $20 million by way of series E preferred stock financing, and the company has taken a bit of a hit on the back of the news. From its May 4 highs of $0.33 a share, Nemus has dipped to a current price of $0.30 a share – a close to 10% decline, and representative of the terms associated with the issued equity.This is one we covered late last year, at which point we highlighted it as being young but very much one to watch in the space. With the announcement of the latest financing, the company has completed a capitalization strategy that it first got under way mid last year, and we think it is now in a position to start growing long-term.Here is what we are thinking.The company is a cannabis-type biotech play, which is trying to develop drugs based on cannabinoids across a host of potentially blockbuster indications. A look at its pipeline reveals assets targeting glaucoma, chemotherapy-induced nausea and vomiting, chemotherapy-induced pain, macular degeneration and – right at the bottom of the pipeline – a cannabinoid platform designed to target antibiotic resistant bacteria. These are all multibillion-dollar indications, and the company will only have to score on one of its multiple shots on goal to bring about a dramatic reevaluation on its current capitalization.Getting a little more specific, the two assets we are looking at as being near-term catalyst drivers are called NB 1111 and NB 1222. Not particularly creative names, but nonetheless, as they move through their respective development pathways, each has the potential to bring about a number of value-driving catalysts. Both are preclinical right now, but (and this is what the latest financing has enabled) will move forward into the clinic this year. Those reading that are already familiar with the biotech space will know that this stage is when the catalysts really start to stack up, and as we've said, it's not going to take much in the way of operational development to get this one moving.Nemus is working with the University of Minnesota in the advance of its pipeline, and for us, this collaboration is crucial to a buy thesis on the stock. UoM is one of the only entities authorized by the federal government in the US to cultivate cannabis for research purposes, and Nemus is the only company working with UoM to develop cannabinoid-based therapies. This gives it an edge over many of the other players in the space and also provides an ideal platform from which to build (and this is something that is already underway) a solid intellectual property portfolio that should form the basis of big name partnerships going forward.Looking at the latest raise specifically, it is rooted in a private placement with an affiliate of Schneider Brothers Ltd, which is a global closed investment fund with over $500 million in assets. The latter will pick up 1 million shares of series E preferred stock in return for a $20 million investment, with the preferred stock convertible into common stock at $0.30 a share (as noted, this is why the company is trading at its current price). Sure, this sort of issue is never ideal for shareholders of any company, but the important thing here (for us, at least) is the securing of funds that will drive Nemus towards a number of major near-term catalysts. These catalysts have the potential to inject upside into the company that outweighs any value lost through dilution, and – especially at this end of the biotechnology space – that's what it's all about.Looking specifically at the catalysts on the bill, we want to see the above-mentioned glaucoma asset hit the clinic as soon as possible so as it can get some safety (and ideally, clinical benefit) data under its belt. Once that's in place, markets should start to pay attention to the asset as both a standalone value driver and as potentially forming the basis of a partnership with a bigger name going forward.We will be updating our subscribers as soon as we know more. For the latest updates on NMUS, sign up below!Disclosure: We have no position in NMUS and have not been compensated for this article.