I recently wrote this article at Motley Fool on Tetra Bio Pharma, which is a close partner of licensed producer Aphria in Canada. Anyone interested in learning about the cannabis market in Canada or the states is encouraged to read my articles here on steemit and if you have questions about anything, I will certainly try to get you some answers.
APHRIA PARTNER TETRA BIO-PHARMA LAUNCHES CANNABIS OIL:On October 26, 2017, Canadian Licensed Producer Aphria's partner, Tetra Bio Pharma, announced "the LAUNCH of a medical CANNABIS OIL program as it 1) TARGETS penetrating the lucrative cannabis oil MARKET and 2) STRENGTHENS its plans to generate revenues from the medical cannabis market." This signals that both companies are readying and prepared for the coming new regulations that will affect no only recreational but medical cannabis in its many forms. I looked into this further to discover what advantages Aphria may have through its partnership with Tetra BP since the strength of a partnership is founded on the strength of each partner and their abilities to make things happen in a complementary, synergistic way. I can easily prove these are my articles by commenting to them at Motley Fool and saying something like, steemit up, link from there to here, though I'll need to check TOS to see if I can link to here from there. I put a lot of time into these articles, and write as if I am researching each article for myself, which is usually the case that I want to have quick access to what I think is important about a stock or stocks. I hope you guys enjoy this. Cannabis stocks can make you rich if you pick wisely and be patient. Again, I've been investing for decades successfully. So ask questions. You will note on my there at Motley Foo that it shows my worst stock pick as Globalscape. That's because it wouldn't let me pick it at 20 cents and one day it was moving up from $5 and I picked it because it finally allowed me to, and then when hit a lot higher, I didn't think to post or close it out there, so when it retraced it showed up as a loss. But I bought a ton a 20 cents and sold a ton at $4.00 to $5.50. Some 180,000 shares. I'm holding a lot of cannabis stocks that Motley Fool doesn't allow me to pick for my Caps rating,, but I am ahead and up this year over last year 500% and the amounts in dollars is now 7 figures, so what I'm doing is having substantial results. Good luck. I put a link to my MightMaven article, this one, so you can verify it's there plus I will try to schedule so I get over there and mention steemit somehow. All right. That's it. I'm going to tag XRP digital currency because I want that group to know I am a large investor in XRP as well, and for you to know it as well. That's another investment I will be writing on. FYI. It's in my top five investments.
CANNABIS OIL REVENUE GENERATOR:
The October cannabis oil news story tells us the revenue plan Aphria's partner mentioned before, that would bring an expected $1.5 million for Rx Princeps and its specialized pipe to Tetra alone, not counting partner revenue to Aphria (which is providing the cannabis in the special formula), is now adding a new revenue generator and it's from a very lucrative part of the medical cannabis market. That is, the medical cannabis oil market from where they both will add to their 2018 revenue generation.
APHRIA IS THE LIKELY MAIN LP FOR TETRA'S CANNABIS OIL:
It is the author's suspicion that the partner for this is Aphria, and this is because Tetra has no partner listed for the clinical trial of their new cannabis oil PPP005, and the only other product they don't show a partner for is the Aphria-partnered product, PPP001, a dried blend created from three cannabis strains. So it is likely you are looking at the dried cannabis and its oil in these two clinical studies. The reader can view the Tetra clinical trials on their website home page where they have newly listed PPP005 on their pipeline chart, so it could indeed be the same formula as PPP001/Rx Princeps blend of cannabis that is soon to enter Phase III trials as the first smokable cannabis to be clinically tested. In pre-marketing stages, Aphria's partner announced that Rx Princeps is meeting with strong demand which called for them to bring in some extra licensed producers to have necessary supply. Aphria already has started its own cannabis oil line, including Champlain Indica $120/100ml, Champlain Sativa $120/100ml, Rideau $99/45ml, and Capilano $99/45ml.
PPP005 CANNABIS OIL BY TETRA LIKELY PPP001 IN OIL FORM:
The reasoning for that is that if you take PPP001, which is a dried cannabis blend of three strains produced by Aphria for Tetra, and put it into an oil form, the Phase clinical trials for PPP001 and PPP005 would layer together due to being created from the same three cannabis blends in the same amounts of those ingredients. That would tie them together along with the research on them so that doctors studying the trial results can draw contrasts and comparisons from both the oil and the dried cannabis. So you really are getting that 1 + 1 = 3 effect because each study applies to itself but in this case also applies to the other clinical study.
LUCRATIVE CANNABIS OIL SALES COMING:
So they are in effect advising us that they now are expecting a lucrative addition to the Rx Princeps related sales they announced not long ago. Furthermore, if it's the cannabis oil from PPP001, which it looks like it is, then they have to and want to test it clinically the same way they did PPP001, while at the same time they are able to sell it right away just as well as any other cannabis oil is sold. Aphria now has Rx Princeps for sale via their patient order line for $90.00 CAD for 8.4 gram bottle. That's about $11.25 a gram, which is priced according to the demand, reflected in the higher price versus most other brands, I understand.
APHRIA-TETRA CO-ORDINATED R&D RAISES THE QUALITY BAR:
I would expect their Rx Princeps (?) cannabis oil to be priced similarly higher than average products on the market. This is due to all the research and clinical trials going into these two products. The advantage of clinical trials is that on completion of them, the company has all the data for doctors and pharmacists to learn about it, and the FDA, Health Canada and the European Medicines Agency allow for a more descriptive labeling of the contents that others can't have, distinguishing the product further. Then upon receiving a Drug ID Number (DIN) the whole ball game changes like Bera, Mantle and Maris coming to the plate with bases loaded in the bottom of the 9th with no outs.
APHRIA'S PARTNER POSITIVE ON THEIR CANNABIS OIL OPPORTUNITIES:
Tetra's Chief Executive Officer (CEO), Bernard Fortier," Tetra is in a good position to penetrate this market. We have been preparing for months how to differentiate ourselves within this market while maintaining our corporate vision of an evidence-based approach. The cannabis oil market will be no different for Tetra. The corporation is dedicated to providing evidence and supporting physicians and other healthcare professionals WHILE making cannabis accessible to their patients." I emphasize 'while' because I'd like to point out that clearly that while this oil is being clinically trialed, it will be available on the market.
As I said, They are able to sell both products they are testing, the dried and oil version cannabis, while they are testing them. That is seen by the current sales of Rx Princeps and the following statement on their cannabis oil. "We are on target to initiate our sales strategy by March 2018 to carve out a solid position within the Canadian market. We expect to generate revenues in the cannabis oil market in 2018 and we will grow these revenues as physicians become aware of our scientific approach and patient care programs.
CONSERVATIVE 2018 ESTIMATE OF $1 MM REVENUE FROM OILS:
Based on a conservative market penetration estimate, we are targeting to grow our share of the cannabis oil business to over 1 million in revenues by 2019." (That is, $1 million in revenues for cannabis oil sales by the end of 2018, if you will.) This is not something they jumped into without any forethought, but gave it a lot of careful consideration at the deepest levels to answer the question "How do we differentiate ourselves in this market and also maintain our evidence-based corporate vision?" They said they studied the issue for months now.
NEW CEO LIGHTING THE RIGHT FIRES:
I would say as soon as the CEO was on board this summer he quickly assembled the Tetra teams to analyze how to enter the cannabis oil space because they weren't yet taking advantage of their CDSA dealer's license and not exporting or producing anything to export. And it makes perfect sense to go after this part of the market. I admit I was caught by surprise by the Aphria news release November 23rd, 2017, because I didn't realize all that the CDSA license meant for Aphria or Tetra.
I did assume they were waiting for something or doing something in the background about that, perhaps waiting to use PPP001 in oil form at some point and approach international sales at some point, but I did not then realize the power of the CDSA license. It is tremendously powerful and one look at Aphria's stock price, on Monday, November 27th, 2017, shows it at $12.06 CAD and $9.44 USD, increased by 50% in three days on their CDSA Dealer's License news. I have since corrected my assumptions on the meaning of it for Aphria and Tetra.
TETRA CEO STEPS ON THE GAS AND MOVES ON CANNABIS OIL:
It looks like the new Tetra CEO stepped on the gas about it right away, and I am glad he did, if that's what happened. Because now we can see they have made that giant step forward into cannabis oil and it looks to me like he got them pointed in that direction. It has the feel that he said, "Okay, we need to be doing everything we can with cannabis oil; we've got the PPP001/Rx Princeps and that blend can certainly be made into oil, so we need to see what our marketing plans are available for it and what clinical trials we need to get going for the oil version and how to prepare those; because a Phase I trial on PPP005 as we will call it will add to the literature we already have gained through PPP001's clinical trial, and that gives doctors twice as much to read on the same blend from two different angles. And I think we can be relatively certainly of the same outcome for PPP005 as PPP001 if we do the dosing the same level that gets into the bloodstream. Because they are two different intake methods, we will have to see about the right dosage for it, and we should have a strong headstart on this cannabis oil clinical trial research because we already know all the bloodwork data from PPP001 to use as an aid and a guide."
PHASE IV CLINICAL TRIAL IS TARGETING HUGE CHRONIC PAIN MARKET:
This is very smart of them. What we now have is that at the same time as the Phase I clinical trial of the probable Aphria-co-produced cannabis oil of PPP005, (again, why would you go for a different blend or strain of cannabis oil when an oil form of PPP001 would give you such a headstart advantage?), Tetra is announcing that it is supporting a post-marketing study (Phase IV clinical trial) of the use of this same PPP005 cannabis oil in the treatment of chronic pain. So they are doing two studies, Phase I and Phase IV, at the same time! This trial is led by the medical expert teams of of another partner, Sante Cannabis, and is going to provide much safety and efficacy data that is needful for this patient population and their doctors and pharmacists. Tetra, and by extension, Aphria, (who also has their CFO Mr. Merton sitting on the Tetra board), will be working very closely with Sante Cannabis in this important endeavor with its internal regulatory and scientific team.
TETRA'S CLINICAL DATA GIVES WIDE OPEN DOORS TO DOCTORS:
With this data in hand, generated by this study, it will help Tetra's medical team to educate patient healthcare providers on the potentials that cannabis oils bring into the treatment of patients suffering from chronic pain, which includes just about every household in North America. (I would assume they would wisely use their CDSA dealer's license to distribute Rx Princeps and their cannabis oil to not only North America but throughout Europe, and the CEO is quotes as saying they are working with the European Medicines Agency, the counterpart of Health Canada and the FDA. Kudos for that. That hasn't really been in the news, you know. Take notice, my friends.
MARKETING WILL RAMP TO NEW LEVEL VIA CLINICAL TRIALS:
Once completed, this trial will allow Tetra to take PPP005 marketing to a new level and penetrate even further into the progress it makes in the cannabis oil market, which they announced as starting March 2018. That $1 million they expect to bring in revenues represents about 3% of the current Canadian market for cannabis oil. I would factor in any revenue that would go to their partners in it, and boost that to around 5%, as a guesstimate based on their personal estimates. I would certainly think their sales velocity for this product will be very one of the best as they go forward with the intial marketing in March and then as they bring out the data from the clinical trials.
SOLID, CREDIBLE POSITION IN MEDICAL CANNABIS & ITS OILS:
Combined with the study in patients suffering from chronic pain, Tetra will have a solid and credible position in the medical cannabis oil market. Dr. Chamberland, Tetra's Chief Scientific Officer (CSO), commented that" physicians are concerned about the potential side effects and well-being of patients using cannabis oil. It is this type of data that continues to allow Tetra to differentiate itself in the medical cannabis market as we become leader in the field. Over and over, physicians and pharmacists welcome the pharmaceutical approach used by Tetra as it is a proven model for bringing safe and efficacious therapies to patients. Patients are expecting their healthcare professionals to treat cannabis like a medicine and help ensure that they safely consume these products. This expectation from patients will soon be fulfilled by Tetra's strategic approach to patient care."
SALES & MARKETING OUTLOOK FROM THE CLINICAL TRIALS:
From a business point of view, these studies are part of the sales and marketing strategy required to effectively penetrate a physician-pharmacist product market. The outcome of these studies will also support Tetra's overall drug development strategy and it is expected that this will allow Tetra to reduce the overall time-to-market for a number of its cannabis-based prescription drugs.
CLINICAL CANNABIS TRIALS TO INCREASE REVENUES:
The company will also use this data to create novel new products that will allow Tetra to further increase its revenues in the cannabis oil market. Remember, Phase I trials of PPP001 were highly successful and highly regarded. What this means is Tetra will both sell their dried cannabis as Rx Princeps while studying it as PPP001 in the Phase III clinical trial set to start by the end of November or December. That's amazing! And it means they will both sell their cannabis oil under an as yet undisclosed name (why not, Rx Princeps Oil Capsules, if I am right it comes from the PPP001 blend) while studying it as PPP005 in the Phase I clinical trial underway and the Phase IV clinical trial they are doing. Yes, they are doing both trials on the cannabis oil at the same time.)
CDSA DEALER'S LICENSE ENABLES APHRIA AND TETRA BIO-PHARMA TO OPERATE IN INTERNATIONAL MARKETS WITH CANNABIS OIL AND RESIN:
Furthermore, Tetra has made it known that they have obtained their Controlled Drugs and Substances Act (CDSA) Dealer's License in various press releases. While many assumed it just meant that's how they are able to operate their business and left it at that, their key partner in all of this, Aphria, just announced on November 23rd, 2017, that they also have acquired the coveted CDSA Dealer's License, and in their press release about it, they really enlightened the public as to what it means for their plans for cannabis oil. It should also tell us what it means for Tetra Bio Pharma, their partner, to hold the same dealer's license. Aphria Achieves Next Milestone in International Expansion Strategy with Receipt of Dealer's License is the title and it states within that it "permits the Company to possess, sell and transport medical cannabis oil and resin to international markets, ... is a significant milestone in our international expansion strategy as it enables greater control over importing and exporting medical cannabis oil globally ... and will accelerate our speed to international markets and broaden our patient base internationaly". This, of course, means greatly expanded revenue for each of these as they enter international markets with through their CDSA license.
THE BIG SECRET IS OUT:
Up to now, Tetra wasn't really elaborating to shareholders or investors through their website or in presentations that this was what the CDSA dealer's license enables, but the cat is now out of the bag. Aphria has "spilled the beans" and investors took to the news each day since it came out like bees to honey. Now smart investors are likely searching out other holders of the CDSA dealer's license and it's a good chance they will probably invest in them because they sure are beating a path to Aphria's door on the CDSA dealer's license news. They understand what it means when Aphria said about it, that it will result "in greater revenue for Aphria", that it will broaden their patient base internationally. One thing to consider very well is that now that the cat is out of the bag and people are going to say, You mean Tetra has one of these licenses, too, what do you think investors will say about that? I think they will realize that's basically a heretofore unrecognized asset held by Tetra, Aphria's partner. I think they're going to love it. Especially so because I don't think they really knew how powerful it is to have this license. But now they do.
This is my blog at Motley Fool
You can find this article there and a number of other articles about investing in cannabis stocks, particularly medical marijuana, MMJ, and biopharmaceutical cannabis stocks.