TORONTO - Avicanna Inc. (TSX: AVCN) (OTCQX: AVCNF) (FSE: 0NN), a biopharmaceutical company specializing in cannabinoid-based products, has entered into an exclusive supply agreement with an unnamed multinational pharmaceutical company to distribute two of its proprietary topical products in the European market. The agreement also includes a right of first refusal for Avicanna’s Self-Emulsifying Drug Delivery System (SEDDS) technology capsules in the region.
The partnership will introduce Avicanna's Ultra-CBD cream and CBG Transdermal Gel, both of which are enrolled in observational real-world evidence clinical trials for dermatological and musculoskeletal conditions, respectively. The initial launch of these products is expected to take place in six European countries within 2024, with plans to expand further in the region.
Under the terms of the agreement, the multinational pharmaceutical company, which operates across four continents, will leverage its established commercial infrastructure in Europe for the product launch. In return, Avicanna will receive licensing fees tied to specific milestones and has set minimum order quantities for the pharmaceutical company to maintain exclusivity.
The products, already commercialized in Canada under the RHO Phyto brand, will be manufactured using Avicanna’s Colombian operations. The company's majority-owned subsidiary, Santa Marta Golden Hemp S.A.S., will supply the cannabinoids. The products are slated to be registered and commercialized under the applicable cosmetics legislation, with an anticipated market entry in the first half of 2024.
Avicanna’s CEO, Aras Azadian, expressed confidence in the strategic relationship, emphasizing the potential to facilitate the expansion of their products into several international markets.
This agreement signifies Avicanna's ongoing efforts to advance and commercialize evidence-based cannabinoid products. The company's scientific platform supports a wide range of formulations and has a pharmaceutical pipeline addressing dermatology, chronic pain, and neurological disorders.
Information regarding this announcement is based on a press release statement by Avicanna Inc. The company has cautioned that forward-looking statements are subject to various risks and uncertainties and actual results could differ materially from those projected.
InvestingPro Insights
As Avicanna Inc. gears up to penetrate the European market with its cannabinoid-based topical products, investors and stakeholders may be intrigued by the company's financial health and market performance. According to real-time data from InvestingPro, Avicanna's market capitalization stands at a modest $21.56M, reflecting the size and scale of the company within the biopharmaceutical industry. Notably, the company has witnessed a remarkable revenue growth of 187.54% in the last twelve months as of Q3 2023, an indicator of its expanding operational reach. However, despite this growth, Avicanna operates at a negative operating income margin of -88.37%, underscoring the challenges it faces in achieving profitability.
InvestingPro Tips reveal that analysts expect sales to grow in the current year, which aligns with Avicanna's strategic move into the European market. Yet, they do not anticipate the company to be profitable this year, and with short-term obligations exceeding liquid assets, there are financial hurdles to navigate. The company also trades at a high Price / Book multiple of 28.3, which may suggest a premium valuation relative to its book value.
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