Health Check: Little Green Pharma's European success is more than pot luck

News.com.au

2 days ago

Little Green Pharma reports record revenue and a return to profits
Botanix raises $48 million of debt for its anti-sweating drug, Sofdra
The DNA of Genetic Technologies soon will be … financial advice
Little Green Pharma's (ASX:LGP) European foray is paying off, with the Perth-based medical cannabis supplier more than doubling its Continental and UK revenue in the year to March.
Overall, Little Green grew its revenue by 43%, to a record $36.8 million 'against a backdrop of significant regulatory change and intense competition".
Adjusted for a slew of non-cash items, underlying earnings came in at $2.9 million compared with a previous $1.6 million loss.
Aided by $8.1 million of accrued tax losses, Little Green managed a net profit of $3.3 million compared with a previous $8.2 million deficit.
Little Green stamped its European footprint in 2021 by purchasing a Danish facility from Canada's Canopy Growth.
Little Green paid around $20 million for the facility – Europe's biggest – compared with the $100 million Canopy had invested.
In its 2020-21 accounts, Little Green recorded a $25 million "gain on bargain purchase" resulting in a $24.6 million reported net profit.
It's fair enough the company potted a bargain, given we provided the Danes with a valuable Tassie Queen.
Continental drift
Little Green still derives 82% of its revenue from the difficult Australian market, but this has trended from 88% the previous year as the Euro ops kick up a notch.
The company cites partial legalisation in the capacious Germany market, which has 'driven unprecedented growth in medicinal cannabis patient numbers.'
In France, Little Green supplies to an extended government pilot scheme, ahead of planned legalisation.
'Across both Australia and Europe, we are witnessing the shift from niche to mainstream – a dynamic Little Green has long anticipated and is prepared for,' chairman Michael D Lynch-Bell says.
Sadly, Little Green shares wilted 4% this morning and they have lost 15% of their value year to date.
Management highlights net tangible assets of 24 cents per share, more than twice the prevailing market price.
FDA makes a RAD move
The US Food and Drug Administration (FDA) has bestowed fast track designation on Radiopharm Theranostics' (ASX:RAD) imaging tool, RAD101, to image brain metastases.
RAD 101 has been used in a US phase II clinical trial to distinguish between recurrent disease and the treatment effect of brain metastases from other solid tumours.
RAD101 targets fatty acid synthase, a protein overexpressed in many solid tumours, including cerebral metastases.
The company says more than 300,000 patients are diagnosed with brain metastases in the US annually.
The company plans to release top-line results in the December quarter.
Among other things, FDA fast track designation enables more frequent communication with the agency – a valuable asset given the upheaval at the agency.
While Radiopharm enjoys life in the fast lane, the FDA in late April issued a 'complete response' to sector big daddy Telix Pharmaceuticals (ASX:TLX).
This was in relation to the company's marketing approval application for Pixclara, its tool to image the rare brain cancer glioma.
Telix is confident the agency will approve Pixclara after it provides more clinical data.
Cyclopharm's patent extension
In other regulatory news from Trumpian shores, the US Patent and Trademark Office has granted Cyclopharm (ASX:CYC) a five-year patent extension – the maximum allowable – out to 2031.
This pertains to Cyclopharm's FDA-approved lung imaging tool, Techengas.
The agency took a mere 16 years to approve Technegas, which explains why its patent life was running low.
No sweat, Botanix raises debt
Botanix Pharmaceuticals (ASX:BOT) has secured a circa US$30 million ($48 million) debt facility to further the US rollout of Sofdra, its approved drug for excessive sweating.
The facility, with UK venture debt financier Kreos Capital, follows a $40 million institutional placement in April this year.
Investment giant Blackrock owns Kreos.
Botanix chairman Vince Ippolito says the facility will enable the company to make rapid decisions about Sofdra's commercialisation and to avail of "expansion opportunities'.
The $48 million adds to the $28 million of cash in hand, as of the end of March.
The facility provides for circa $30 million to be drawn now, with the remainder to be tapped by October 1.
Under certain conditions, Kreos Capital can convert part of the loan into Botanix shares.
Kreos also pockets just over three million warrants to acquire Botanix shares at 33 cents apiece, within the next five years.
And now for something completely different
In the most extreme pivot since HIV drug developer Avexa went coal mining in Alabama 14 years ago, Genetic Technologies (ASX:GTG) is reinventing itself as a financial advisory firm.
In essence, it's a back-door listing.
Genetic has signed binding term sheets to acquire Ellerfield Wealth Pty Ltd and Walker Capital Private Wealth Pty Ltd.
Genetic chairman Michael Walker owns 51% of Ellerfield Wealth Pty Ltd and all of Walker Capital Private Wealth Pty Ltd.
The payment of $7.84 million will be by way of Genetic shares, after which the company will undergo a share consolidation.
Genetic shares remain suspended.
The transaction depends on due diligence and the ASX agreeing to relist the company in its new guise.
Genetic entered voluntary administration in November last year after a colourful listed life.
Post administration, the company sold its Genetype cancer and disease risk assessment test business to Rhythm Biosciences (ASX:RHY) for $625,000.
Genetic also sold its Easy DNA and Affinity DNA direct-to-consumer businesses to Endeavour DNA Inc, for $525,000.
Last month shareholders approved a deed of arrangement that resulted in Walker Capital acquiring 88% of the company.