Main menu button

Mrkt BUZZ DanCann Pharma: Important deal with Tetra finalized

5 maj 2021

Read the commentary here:

Mrkt BUZZ Dancann Pharma, 5 maj 2021


Important deal with Tetra finalized

On March 2 2021, DanCann Pharma A/S (DanCann or the company) signed a letter of intent with Tetra Bio-Pharma for the distribution of three cannabis based medical products. Today, DanCann released the information that the letter of intent has been converted to a formal agreement. DanCann receives distribution rights in the Nordic countries and Germany for Reduvo Adversa® and Qixleef™.

This deal is important for Dancann Pharma. It is an additional source of revenue in addition to in-house products. This is also a value driver for the company already at this stage as it increases the probability of a future revenue stream from imports.

Quixleef™ consists of dried cannabis and is inhaled. It is being developed as a drug candidate. A phase II-trial, REBORN1, is planned to start soon. It is intended to compete with opioids for pain relief. The same product is sold under the tradename ENJOUCA™ in jurisdictions where clinical trials are not required for it to be sold. In these jurisdictions it is classified as medical cannabis rather than as a drug. Quixleef™ will be a prescription drug.

The third product, Reduvo Adversa®, is an improved version of Dronabinol (a drug used for certain symptoms in HIV and cancer patients). Tetra is planning to file for an approval in the US during 2022.

Dancann Pharma will pay a total consideration of DKK 6.25 million in upfront and milestones. The company estimates peak sales of DKK 340-410 million in 2028 and royalties of up to DKK 62.5 million corresponding to a royalty rate of 15 percent. These are the costs DanCann has to pay for exclusivity on its markets. As a distributor, Dancann Pharma will also have to import the goods which is a cost. The company’s estimated peak sales figures indicate a good potential for the deal.

Carlsquare recently initiated coverage of Dancann Pharma with a fair value per share of DKK 6.5. Read the full report here.


Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyzes. The information has been compiled from sources that Carlsquare considers to be reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or the like. Opinions and conclusions expressed in the analysis are intended only for the recipient.

The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns.

The analysis is not directed to U.S. persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution.

The analysis is a so-called Commissioned Research Report where the analysed Company has signed an agreement with Carlsquare for analysis coverage. The analyses are published on an ongoing basis during the contract period and for a usual fixed remuneration.

Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Jonatan Andersson, Markus Augustsson and Richard Ramanius do not own and are not allowed to own shares in the company analysed.

 

Mrkt BUZZ DanCann Pharma: Important deal with Tetra finalized