Creso Pharma, one of the first companies to bring medicinal cannabis into Australia, has secured almost USD$6 million in funding
The money was raised through an issue of Convertible Securities to raise US$3.45 million and the completion of a share placement through the issue of shares at a price of US$0.191 to raise approximately US$1.58 million.
Creso Pharm chief executive and co-founder Dr Miri Halperin Wernli says the company has plans to further accelerate its global operations, having also secured an additional drawdown facility for a further US$2.7 million through the issue of convertible securities.
“Creso Pharma has firm and broad foundations for growth and a highly qualified and experienced team in place to execute our strategy for global expansion,” says Dr Wernli.
“We are encouraged by our recent operational milestones, refined strategy, secure funding and continued interest in our operations.”
The medicinal cannabis market
Creso Pharma established itself as an early mover in the medicinal cannabis industry, making significant inroads in 2017. It distinguishes itself from other ASX listed medicinal cannabis companies by focusing on a much bigger play – pharmaceutical grade cannabis products that generate higher margins.
The company has a diverse product portfolio of cannabis and hemp derived products that is focused on four key areas: therapeutics, nutraceuticals, animal health and cosmetics.
Since 2017, it has been committed to build a business rather than ride a trend, albeit a lucrative one.
“We are pleased to announce the first delivery of cannaQIX®50 in Australia. Burleigh Heads Cannabis and CDA Clinics Australia continue to rapidly expand their patient reach with their extensive distribution network,”Wernli says.
“This close partnership enables us to fulfil our mission of bringing life-improving products to patients in Australia. We’re delighted to announce this progress and look forward to further new product introductions in the near future.”
The legal cannabis market is forecast to reach US$148 billion by 2026, with Barclays European Consumer Staples Report predicting the global cannabis market will reach US$272 billion by 2028.
Within this environment, Creso is aggressively pursuing further commercialisation of nine pharmaceutical-grade products in its current portfolio, along with key certifications and strategic partnerships that will accelerate revenue growth.
Creso has already commercialised four sales generating products across the cosmetics, animal health, nutraceuticals and therapeutics verticals and expects its growth plans will be supported by secure funding, increasing revenue, prudent cost management and experienced leadership as it strives to unlock the full value of its operations on behalf of its shareholders.
This comes on the back of a tumultuous six months where Canadian cannabis giant PharmaCielo Limited (TSX-V:PCLO) targeted Creso for the breadth and strength of its current portfolio and widespread cannabis operations and valued it at A$122 million.
The deal fell over in November, however it highlighted the potential investment opportunity in the Australian company. The proposed takeover, valued Creso at 63 cents per share representing a 50% premium to the company’s closing price on June 6, 2019.
Its strengths are emphasized by its year-on-year revenue growth, providing a sound base as new products are brought to market.
Creso Pharma believes the value of its fundamental operations continues to grow, supported by the company’s portfolio of products, established operations, corporate interest and market opportunities.
Creso Pharma’s products are made with standardised dosing and formulations through the application of pharmaceutical rigour, Good Manufacturing Practices (GMP) standards and proprietary, innovative delivery technologies.
In addition, they carry the well-known “Swiss Made” label that is synonymous with premium-quality products.
In human health, Creso Pharma anticipates signing with more commercial partners to expand the commercial reach of its two existing products cannaQIX® 10 and cannaQIX® 50 and to introduce the newly developed products in additional European countries.
The company is prioritising Spain, Portugal, the Scandinavian countries, Poland and Israel.
The launch of cannaQIX® 10 into South Africa is planned for the March quarter of 2020 as the first CBD based product to be commercialised as CAM (Complementary Alternative Medicine), followed by a phased entry into other African countries, as well as expanding to additional CBD based products with the same partner pharmaceutical company.
In animal health, Creso Pharma’s partner Virbac is introducing the two initial anibidiol® products into further countries in Europe and will be launching Creso Pharma’s new animal health products in the near future.
For both human and animal health, Creso Pharma has initiated its reach into North America, where it is in discussions with a number of potential partners to introduce all 13 products, human and animal, into selected US states.
In South America, Creso Pharma has filed its animal health products in Argentina and Uruguay together with PharmaCielo and is at the last stage of approval.
Commercial partners have been identified, terms negotiated, and a plan outlined for a long term collaboration on the existing range of products as well as on the new products that Creso Pharma has developed which are ready for launch.
Creso Pharma applies pharmaceutical expertise to develop, produce and market a range of cannabis derived products to improve people's lives and animal welfare.
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