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A Bright Future Holds for Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX)

A Bright Future Holds for Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX)
Written by
Jim Bloom
Published on
November 8, 2017
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The American pharmaceutical industry is founded on the research and development (R&D) of players within the industry. Major players within the sector have been the reason behind some of the most significant successes at treating some of the most dangerous and deadly diseases in the world, alleviating suffering worldwide.Currently, cancer has been a headache for the medical research community with the disease causing the deaths of over 500,000 people annually in the US alone and having led to 1.6 million new cases in 2016.It is upon this backdrop that Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX) has ventured into this field and is about to make a statement.The company which has invested top-dollar on its quest to come up with a solution to the current cancer crisis through cannabis has finally made a breakthrough. This breakthrough which is currently being vetted and patented is bound to elevate them to levels beyond which they only imagined possible.However, despite such great news, they still have had no significant positive impact on their share rice with the price showing no bullish signal as yet.Well, this move is bound to impact them in the long run and we remain bullish about their upside potential into the future after some of the conditions we will discuss below have been met. However, for the short term, the company’s share price increases will only entail upticks rather than surges as would be expected.A view of the company’s price action can be seen below: CNBX Daily ChartWith the above in mind, let us have a look at the company and assess who they are and their operating environment.Cannabics Pharmaceutical IncCNBX is a U.S based public company, is dedicated to the development of Personalized Anti-Cancer treatments. The Company's scientific focus is on harnessing the proven therapeutic properties of natural Cannabinoids.Their research is devoted to the discovery of cannabinoid compounds targeted to specific cancers based on the confluence of cutting edge technologies and personalized bioinformatic markers.The above information will set the stage for one of their most important announcements yet as is to be seen below.Major AnnouncementsThe company began the series of announcements with the creation of a Human-Cannabis-Cancer genetics lab back in July.The lab was meant to serve as a development center for cannabis tools based on human genome, tumor genetics and cannabinoids. They also hired Dr. Moran Grinberg as the new Vice President of research and development with his main job being ensuring the progress of research within the institution.Well, this paid off.Towards the end of August, their research bore fruit with one of their novel technologies, the Cannabinoid Personalized Screening of Cancer Cells, receiving the go-ahead for a patent from PCT, a board that screens innovations before they are patented. They later, in early September, filed for a patent with the US Patent & Trademark Office.The news which has got the medical community jubilating has been welcomed in different quarters. The company’s CTO, Dr. Eyal Ballan

"As we progress in the field of cannabinoids and cancer we find the unmet need of personalizing cannabis medicine and fortunate to carry out this mission."

Source:FinancialsThe company’s financial position has been growing steadily over time despite the numbers not being as large as we would expect.This is easily seen in their revenue position which currently stands at $1,571 rising from $1,243 in the previous quarter, a 26% jump. Management attributed this to more effective marketing methods for their products during their period.They also had lower costs over this period as compared to the same period last year with the costs standing at $139,000 and $337,000 in research and development and sales, general and administrative expenses (SGA) respectively in February 2017 as compared to $223,000 and $427,000 in February 2016. Management has adopted a cost reduction strategy as they aim at netting a profit in the current year and moving onwards.However, this was not the case when it came to quarterly financials with SGA expenses rising to $406,275 over the period ending May 2017 from $147,257 for the quarter ended February 2017. This was attributed to the legal and professional fees incurred during this period in a bid to acquire patents for their products.Their net loss fell from $438,229 to $245,429 over 1Q2017 and 2Q2017 respectively courtesy of significant interest income earned during this period. Moreover, their cash position was also boosted to $3.1 million from $567,217 over the same period.The above speak to strong financial management over this period. Given that management expect this to continue over coming periods, we expect that their financial performance will continue to improve and while revenues may not increase significantly before they obtain FDA approval, their revenues and profits, upon obtaining it, will be unrivaled.Our take on this topic is as follows:CNBX is making headway in the cannabis research space, a good thing for all shareholders and other stakeholders. This goes a long way to show their veracity and ability to actually implement their mission. It also sends a strong message to the industry and the market on the strength of their value proposition.Despite this, in the short run, the company’s value addition is limited and they will have limited headway as long as their product is not FDA approved. All the research only goes to ensure that they get this approval which, if the trend continues, is not far from being achieved. Once this is done and they can commercialize this research by producing a product, their upside will be limitless.However, before this is done, CNBX has a limited upside in the short run, as is seen in the chart above. For long term investors, however, growth in their share price upon FDA approval and onwards will be the one thing that will create wealth for them. CNBX is therefore a buy for the long term.ConclusionCNBX has made great strides in their bid to provide solutions to cancer patients while harnessing the power of cannabis in doing so. With the near acceptance of the patent and future development of a drug that is FDA approved, the company will have made significant headway both in the medical field and financially. Therefore, the company serves as a good investment for long term investors with potential upsides due over this term.We will be updating our subscribers as soon as we know more. For the latest updates on CNBX, sign up below!Disclosure: We have no position in CNBX and have not been compensated for this article.

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