OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) Is Primed For A Turnaround

OWC Pharmaceutical Research Corp (OTCMKTS:OWCP) has been one of our biggest winners to date. When we first highlighted the company as being one to watch, back in October 2016, OWC was trading for $0.03 a share. By February 27, 2017, this had risen to $2.7 a piece – that's a circa 9,000% run in less than six months.In the interest of full disclosure, the February highs turned out to be a short lived peak, and OWC has since declined to current levels in and around $1.1, but that's still a 3,600% premium to our first highlighted price point.That's all well and good, but for those that got in at or close to highs, and are currently holding a red exposure, historic potential gains aren’t going to offer much in the way of consolation.The question these shareholders are asking, or that potential new holders are trying to figure out, is what's next? Where does the company go from here, and when?Our answer is this: that current levels are almost certainly a floor to the decline, and this decline is a short to medium term correction on the incredible run we saw throughout the final quarter of 2016, and the first quarter of 2017. In turn, that price is only go to stay at current levels for a short period, before turning back to the upside and resuming its overarching bullish trend.What's this theory based on?Well, before we get into that, a bit of detail to bring newer readers up to speed. This is a cannabis company that picked up an initial run on the back of the recreational legalization hype towards the end of last year. It's more than just a hype play, however. The company has created two types of cannabis administration – one sub lingual (under the tongue) and one topical (a cream) – and it's trying to get both methods approved in some potentially blockbuster indications in the US. It's an Israel based company, which has its pros and cons – Israel is incredibly open to cannabis and cannabis research (at least when compared to the US) and this helps to streamline research progress. On the other hand, it makes getting things going in the US that little bit more difficult.So, our suggestion that this one is set for near term strength is rooted in two things – one near term, one slightly farther down the line. The first is the topical administration mentioned above. It's being trialed for safety right now, and management expects it to hit shelves as a psoriasis cream in both the US and Europe during the second quarter of this year. Well, a recent interview stated second quarter, while the latest company presentation says third quarter. Whichever of these proves correct, it's still a near term catalyst, and one that could open the doors for considerable revenues for the company. Pre clinical efficacy data demonstrated an up to 70% improvement in the condition based on certain inflammation markers, and while there are treatments available in the space right now, a huge number of patients don't find them effective, or aren’t happy to put up with the ide effects they bring about. The company estimates 8 million patients could benefit from its cream.One of the drivers behind the recent devaluing is that this launch has delayed a little – it was initially intended for the first quarter. We don't see this as a major issue, if an issue at all. These things happen, and the decline in price on the back of the delay is an opportunity to pick up an exposure to the drug's (eventual) launch at a discount.The slightly farther down the line catalyst is the bringing of the sub lingual administration to market in its own target indications – initially, pain, as a replacement to the current smoking administration method.We're looking at this as a 2018 catalyst (likely), and by then, we expect OWC to already have started collecting revenues on its psoriasis asset.As of this month, the company is debt free, and has cash on hand to carry it through end 2017, mitigating any near term dilution risk.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.