Synbiotic
German cannabis group Synbiotic published an update on its eclectic portfolio of businesses this week, seeing sales rise across the board following the passage of CanG.
Ahead of the company’s Annual General Meeting (AGM) on September 20, Synbiotic suggested that its most recent acquisition, Weeco Pharma, was ‘developing fantastically’.
In May, Synbiotic acquired the German importer and wholesaler in a deal worth around €12.25m, marking its second acquisition in less than a month and its third since the start of the year.
At the time, the company said Weeco was forecast to achieve sales of €5m this year, bringing expected sales for the wider group to €20m.
Weeco has now reportedly seen a 300% increase in sales compared to the same period last year, largely attributed to the removal of cannabis from the German Narcotics Act, enabling broader market access for its medical cannabis products.
“We were more than positively surprised by the significant increase in demand,” Weeco’s Managing Director Börge Diessel said, noting that the second quarter of 2024 was the company’s strongest ever.
These figures were reportedly ‘ahead of its own planning’, and the company says it is ‘confident’ that it will exceed its targets.
In the coming months, Weeco plans to expand its product offering to include more of its own developed strains, bringing the share of sales based on genetics developed in-house to around 70%.
Meanwhile, Hempro International, a company created by Synbiotic’s recently instated CEO Daniel Kruse before it was brought into the group, has also ‘risen significantly’ by around 50%, alongside MH Medical Hemp.
In its CBD arm, Synbiotic said it is finalising the process of acquiring a 69% stake in CannaCare Health GmbH. Before completing this acquisition, they are conducting a fairness opinion and an audit to ensure the deal is fair and that the value of the acquired stake is accurate.
Furthermore, in relation to the controversial ‘intoxication clause’ a provision within German cannabis legislation, particularly affecting the industrial hemp industry, Synbiotic says it is hopeful this will soon be removed.
As such, it suggested that its potential romoval could see a 1000% increase in growth potential, both for the wider hemp sector and its own investments.
Stenocare
Danish medical cannabis oil manufacturer Stenocare has seen its stock drop by around 20% this week after significantly altering its revenue expectations for the year.
According to an update published earlier this week, Stenocare, a relatively strong performer compared to its stablemates in 2024, said that its gross sales projection has now more than halved from initial estimates of 12-18m DKK to 6-8m DKK.
Based on ‘actual market performance’ from Q1 and Q2 2024, alongside the expectations for Q3 and Q4 2024, the company still expects to see gross sales increase by 7% year-on-year and total sales in units is expected to grow by 36%.
However, assertions made in November last year that the company was on track to break even this year have now been rescinded, as they are no longer ‘realistic with the new sales forecasts.
Stenocare’s initial guidance from November 2023 had been optimistic, hinging on strong performance in Denmark and five other international markets. However, fluctuating market dynamics, including price competition and regulatory challenges, have impeded expected growth, the company explained.
The Danish market, a crucial area for Stenocare, has faced unexpected challenges, particularly with the pricing and reimbursement structure for medical cannabis. The Danish pricing model for pharmaceuticals is highly dynamic, and increased competition has led to price reductions, which in turn has slowed revenue growth.
Although Stenocare expects to deliver 20% more product units in Denmark, the revenue impact of lower prices and stricter reimbursement policies has been more significant than initially anticipated.
This was reflected in Stenocare’s latest interim report, published yesterday, which showed that gross sales for the first six months were 2.1m DKK, down from 2.8m DKK in the same period last year.
Net sales followed a similar trend, dropping to 1.9m DKK from 2.5m DKK. The company also reported a negative EBITDA of 5.2m DKK for the first half of 2024, slightly better than the 5.8m DKK loss recorded in the first half of 2023.
It also cited its inability to market its products in many of its key markets, including Denmark and Germany, given the restrictions around prescribing practices, though these restrictions would have been clear when the initial predictions were made.
On a more positive note, Stenocare says it still expects to complete the review, inspection and approval process of its indoor cultivation facility by year-end, enabling it to begin exporting bulk medical cannabis in 2025, brining an additional revenue stream.
Argent Biopharma
Argent Biopharma (formerly MGC Pharmaceuticals), announced last week that it plans to formally delist from the Australian Securities Exchange (ASX), and has received approval from the exchange.
The company, which has previously stated its intention to focus on the UK as its main operating market, cited a number of reasons for its departure from the ASX.
Primarily, there has been a significant lack of liquidity in the trading of its shares on the ASX, making it difficult for shareholders to trade their investments effectively. Additionally, the company has faced persistent fundraising challenges in Australia, with recent capital-raising efforts primarily supported by investors from the UK and the US, highlighting limited local investor interest.
Moreover, the company considers its London Stock Exchange (LSE) listing as its primary and more advantageous listing, given the stronger interest and investor base there.
Lastly, the costs associated with maintaining the ASX listing, both in terms of direct expenses and the management time required, outweigh the benefits, prompting the board to focus resources on furthering its operations rather than maintaining a secondary listing.
While no specific date was given, it suggested that the removal from the ASX official list will not occur any earlier than one month after the company has sent out the formal communication to its shareholders regarding the delisting.
Meanwhile, the company also announced a new partnership, which will see it explore new treatments for ‘chronic wound management’.
Its new strategic collaboration with SINTEF, one of Europe’s leading independent research organisations, will focus on developing innovative nano-formulations to enhance treatment efficacy for chronic wounds, which affect a significant number of patients globally.
The collaboration will explore the identification and selection of novel antimicrobial agents with multiple therapeutic benefits. SINTEF will test these agents for their ability to combat biofilms, improve local tissue health, and provide symptomatic relief.
Argent BioPharma will bear the costs of the project, which are not expected to materially impact the company’s finances, and will retain ownership of all resulting intellectual property.
The company anticipates that this collaboration will lead to significant advancements in chronic wound treatment, potentially transforming the quality of life for patients with this challenging condition.
The post Synbiotic Hails Sales Growth Post-CanG, Stenocare Halves Sales Forecast for 2024, & Argent Bio. Delists From ASX appeared first on Business of Cannabis.
Continue reading...