OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) Is In For A Big Month

OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) is up more than 260% year to date but the company has had a pretty tough second quarter. Subsequent to highs in and around $3 back at the end of February, OWC has dipped to current levels at $0.65.This decline, however, has come against a backdrop of consistent, and considerable, operational advance. This is a cannabis company, sure, and some of the run to highs may have been rooted in the speculative attention that flooded the sector as a whole towards the end of last year. It's far from a fly by night entity, however, and while the decline in valuation that many companies have seen throughout early to mid-2017 has been perfectly justifiable, for this one, it's not.We think current prices could be a real inflection point for OWC based on some just announced activity and a very near-term catalyst that should serve to compound the impact of the former.Our thesis is rooted in the company's psoriasis asset – a topical administration cream type product that's based on an active compound of cannabidiol and that's designed to treat patients with the currently incurable skin condition.At the start of this month, management announced that OWC had entered into a strategic relationship with a company called mediq Innovation Experts (mediq). The partnership will facilitate the entrance of the company's psoriasis cream into the German market initially (mediq's domestic market) and, once established in Germany, the German market will serve as a platform from which OWC and mediq can launch into other European countries.mediq is a strong partner is this market with a track record of success in getting these sorts of assets established both domestically and internationally throughout Europe. The European market is strongly accommodative of this sort of medical cannabis asset (as spearheaded by legal frameworks in Germany, which is why we think OWC chose to use this market as the hub of its European efforts) and in a market in which there's a considerable unmet need (the psoriasis market) for effective, and alternative therapies, this is a smart move.So that's the recent news, but it's the upcoming catalyst that we are expecting will really get this one moving.OWC kicked off a safety study for the psoriasis asset we’ve been talking about back in March. The study will be used as the basis of applications for commercialization in various markets (Europe and the US) and will also be used (we're assuming here, but it's a reasonable assumption) to underpin the sales pitch for the teams tasked with pushing the product to both physicians, dispensaries and/or direct to patients. That the data comes out as strongly indicative of the product being safe, then, is imperative to success in this space. If it comes out in line with this implication, OWC is going to really start to run. We'd love to see some efficacy data hit press alongside the safety data (as is often the case in an equivalent phase I study in the wider healthcare space) but it doesn't look like we're going to. While it's set up to investigate, and we're quoting here, the safety of the formulation in treating psoriasis on human skin tissue, the study is a healthy volunteer study, so we're probably not going to get any indication as to impact on dermatological conditions.That said, it's still a strong catalyst and one that can combine with the recent German market announcement and really serve to push the product's potential in Europe.Data is set to hit press end second, early third quarter. We're looking for a late June release.Bottom line: This one's down but far from out. Expect a strong recovery on the back of a data release showing a clean safety profile and a subsequent push into the German, wider European and other major global markets.Keep in mind that we'll probably see a near term raise, necessitated by the commercial push for the psoriasis asset. That, or a partnership with a bigger name on a distribution deal in the US that would bring with it a capital injection and – in doing so – negate the necessity for equity issue.We will be updating our subscribers as soon as we know more. For the latest updates on OWCP, sign up below!Disclosure: We have no position in OWCP and have not been compensated for this article.