Cantourage, Amazon, Bayer: Young entrants soaring, old players in reorientation

German hemp startup Cantourage: Traffic light government votes for cannabis legalization

Finally, in Germany as well: the legalization of cannabis has been approved by the federal cabinet. In the future, it will be permitted for adult German citizens to purchase up to 25 g of cannabis and to possess up to 3 plants for self-cultivation. The fact that the active ingredients of the hemp plant are also used medicinally is something that some investors are not even aware of yet. Since 2017, doctors in Germany have been allowed to prescribe cannabidiol, especially to patients suffering from acute and chronic pain. This is the case for rheumatism and also multiple sclerosis (MS).

Some investors may still have painful memories of Juicy Fields. The dubious platform was exposed on a large-scale investment fraud.

But it is a completely different story with the German-founded company Cantourage. The Berlin-based company is dedicated to making cannabis available for the medical market. The team continuously works to reduce therapy costs, develop innovative medicines, and import high-quality cannabis flowers from global sources. Their global collaboration network currently extends to 40 companies in the cultivation and manufacturing sectors. Cantourage's products are sold in German and European pharmacies.

A solid business from the ground up in a growth market, whose team preferred to go public on the Frankfurt Stock Exchange rather than let venture capital investors talk them into their strategy. And success proves them right: In the first half of 2023, the Company recorded revenues of over EUR 11 million from the production and sale of medical cannabis, an increase of about 90% compared to last year. CEO Philip Schetter expects revenue growth in 2023 to be in the higher double-digit percentage range. The goal is for the Company to continue to expand profitably. Currently, Cantourage's share price is EUR 11.34 on the stock exchange.

The Cantourage founding team, Norman Ruchholtz, Florian Holzapfel and Patrick Hoffman, are experienced players in the cannabis industry. Back in 2015, they founded Pedanios, one of the first major cannabis wholesalers in Europe, which they sold two years later to Canadian market leader Aurora. They continued their business under the name Aurora Deutschland GmbH and then in 2019, they founded Cantourage. Since the cannabis market is often volatile, the team decided to go public to raise cash. Thanks to its strong retailer network and in-house brand strategy of offering cannabis in a wide variety of price segments, the Company can look forward to continued growth. And so can investors. Here is the latest covering.

Amazon ventures into the healthcare market again - This time, with generative AI

Retail giant, Amazon has tried its hand at the healthcare market before. Be it with the idea of sending medicines by drone, its own pharmacy division or a call-a-doctor service. But the pioneers were unsuccessful because the healthcare market regulations are particularly tightly knit.

Now there is a silver lining in the cloud segment of the Seattle-based group. AWS announced AWS HealthScribe, a new generative AI-driven service that automatically creates clinical documentation. Specialists such as interventional radiologists need to document their cases. Previously done via dictaphone to be typed up by the assistant, now an AWS AI can do it.

At the AWS Summit in New York, AWS HealthScribe was unveiled, a new HIPAA-approved service that allows healthcare software providers to develop clinical applications with speech recognition and generative AI. This saves physicians time by automatically generating clinical documentation.

Using AWS HealthScribe, healthcare software providers can create comprehensive transcripts, extract key details, and generate summaries of physician-patient conversations through a single API. These can then be entered into an electronic health record (EHR) system. By citing the source of each line of generated text from the original conversation transcript, AWS HealthScribe enables responsible AI system deployment, making it easier for physicians to review clinical notes before entering them into the EHR.

So the group is sneaking into healthcare once again through a small backdoor with big potential. The healthcare AI market size was EUR 5.9 billion in 2021 and is expected to grow to EUR 184 billion by 2030. That represents a compound annual growth rate (CAGR) of 45.5% from 2023 to 2030.

Berenberg Bank upgrades Bayer to "hold"

Berenberg Bank lowered its rating on Bayer AG to "hold" from "buy," citing issues such as legal disputes, corporate bureaucracy and debt levels, according to Reuters. It appears that the new Bayer CEO will first have to do a major housecleaning until the tradition-rich Leverkusen-based company gets back on track.

According to Berenberg, estimated legal liabilities of EUR 9 billion, downgrades caused by agriculture-related earnings declines, and a more than 9-fold 2023 EV/EBITDA (Enterprise Value to EBITDA ratio) have led to the shares being "not cheap." Downgrades in accounting refer to the group's dwindling ability to settle its liabilities with excess cash from revenues after deducting expenses.

Berenberg Bank adds that Bayer is expected to struggle to grow profits over the next two years due to loss of exclusivity and lower commodity prices.

The rationale for the purchase has increasingly become a bet on whether Bayer will be able to successfully settle or defend against the polychlorinated biphenyls (PCB) cases. In this regard, Bayer's track record to date is not inspiring, Berenberg said.

In addition, Berenberg analysts note that the dividend is not expected to be covered in 2023. Prioritizing dividends over net debt reduction would worry the broker given legal risks.

Bayer shares were down 2% to EUR 50.85. The average price target for the next 12 months is EUR 66, based on reports from analyst firms over the past year.

The medical cannabis market is currently being conquered by Berlin-based Cantourage. In H1 2023, the Company generated revenues of over EUR 11 million from the production and sale of medical cannabis - an increase of about 90% YOY. CEO Philip Schetter expects revenue growth in the higher double-digit percentage range for 2023. Cantourage's share price currently stands at EUR 11.34. Berenberg Bank lowered its rating on Bayer AG from "buy" to "hold," citing issues such as legal disputes, corporate bureaucracy and debt levels. The challenges for Bayer's new CEO are apparent. Amazon announces AWS HealthScribe, a new service that automatically creates clinical documentation. This HIPAA-approved service allows healthcare software providers to develop clinical applications with speech recognition and generative AI. It saves physicians time by automatically creating clinical documentation.