October 28th, 2021 | 12:04 CEST
Canopy, Tilray, Sativa Wellness, Formycon - Finding the next cannabis rocket!
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"[...] We are a producer and distributor of medicinal products and thus cover a crucial step in the value chain, especially within the cannabis industry. [...]" Philip Schetter, CEO, Cantourage Group SE
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Canopy versus Tilray - Who will win the race?
The public discussions in Germany on the (partial) legalization of cannabis products have been met with approval throughout the industry. The key point: Germany has a lot of weight within the European legislature in Brussels - some believe in faster legalization legislative processes or a significant acceleration of the topic if Germany steps on the gas here.
The German pharmaceutical industry is sitting up and taking notice because they would not be in the right position if it were to happen quickly. Should cannabis be fully legalized and sold in regular stores? While this question is heating tempers in Germany, other countries are already further ahead. For example, in Canada, where cannabis was already released three years ago. Meanwhile, the excitement of the early days has subsided, and the consequences can be assessed quite well. There are already many positive examples that show promising results for medical purposes, especially in the therapy of depression diseases and other mental disorders.
The major Canadian cannabis stocks such as Canopy, Tilray or Aurora are in urgent need of a revival from an investor's point of view, as their shares have been going sideways for 12 months and are between 40% and 70% away from their highs. Only the merger between Tilray and Aphria brought back some momentum. With the possible political turnaround in Germany, Canopy Growth, Tilray and Aurora Cannabis could benefit somewhat. However, the regulatory starting signal has not yet been given, so it is advisable to remain on the sidelines for the time being.
Sativa Wellness Group - A new player in the healthcare market
Albeit a major bone of contention, cannabis has gained its place in areas of healing therapy. Especially with the advent of the COVID-19 pandemic, medicine, in general, is facing the challenge of admitting new ways of thinking and including alternative healing methods in the discussion.
The Sativa Wellness Group is a British provider of various services related to cannabis. From self-therapy to wellness, the focus is on cannabidiol (CBD), laboratory services related to the active ingredients from the hemp plant, and other wellness products. The female cannabis plant contains at least 750 chemicals and 100 other-acting cannabinoids, which historically have already shown their effectiveness in many indications. The global market has already established itself and is growing at over 20% annually.
Like other players in the market, Sativa Wellness naturally hopes for the complete legalization of its products. Currently, the Company is already well on its way with its strategic positioning. The already established trading company, Goodbody Botanicals, has made profits throughout 2021 to date after losses in previous years. Since the last quarter, the entire group has been generating positive cash flow and currently has a healthy cash position to support the formulated acquisition strategy.
Digitalization in the healthcare sector is also taking hold at Sativa. Recently, the wellness division announced its intention to enter the market with telemedical consulting services. That hits the nail on the head because, during the pandemic, people in Germany learned to prioritize the topic of health more strongly as part of their life planning. The chances are, therefore, quite good for Sativa. The Sativa Wellness share is listed in Canada under SWEL as well as in Germany. With the current successes and the new COVID-19 blood tests, the market capitalization of CAD 20 million is not too high. An initial position in the fast-growing Company makes sense.
Formycon - There is news on FBY207
The Munich-based biotech Company is putting its research entirely at the service of people's health. In July, the Company had reported government funding in connection with the promising COVID-19 drug FYB207. The drug is said to completely block cell infection in the human body by the SARS-CoV-2 virus.
Currently, Formycon already reports a license and cooperation agreement with SCG Cell Therapy. It involves the development and marketing of FYB207. Singapore-based SCG will receive an exclusive license from Formycon to develop, manufacture and market FYB207 in the Asia-Pacific region. Japan is excluded; this Asian submarket will remain with Formycon. In addition, SCG will gain access to Formycon's ACE2 fusion protein technology. Within the deal, Formycon is eligible for milestone payments of up to EUR 63.5 million. In addition, royalties on sales will be in the low double-digit percentage range.
In our eyes, this is again good news from Martinsried. Nevertheless, the Formycon share has been somewhat quiet in recent weeks. The EUR 55 mark should be watched closely; a breakout to the upside would be a starting signal for a new rally.
The cannabis industry is now slowly entering its teenage years. The initial problems have been cleared, and the protagonists of the industry know their strengths and weaknesses. Canopy, Tilray and Aurora are well-known standard stocks. Sativa Wellness Group is a therapy and testing company with excellent positioning.
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