Argent BioPharma
Argent BioPharma has managed to overcome the wider chaos on the stock markets this week, seeing its stock jump over 40% in the wake of two major announcements.
On April 03, the ASX-listed medical cannabis company announced that its proprietary CBD-based refractory epilepsy treatment, CannEpil, has gained approval for prescription in the thriving German market.
The drug, which has been approved under a special access scheme, can now be prescribed to eligible patients throughout Germany, positioning CannEpil as a viable alternative for drug-resistant epilepsy in a market where options remain limited.
According to the company, around 816,000 people are affected by epilepsy in the country, ‘many of which’ are drug-resistant.
Aside from marking a major vote of confidence in the treatment, this is also a significant expansion into the European market for Argent, paving the way for further expansion into similarly regulated markets in future.
Argent says it plans to launch programmes to educate physicians throughout the German market, while expanding its distribution network in the country.
Meanwhile, on April 09, Argent revealed that its exclusive agreement with SK-Pharma’s CEO Dr Schlomo Sadoun to ‘facilitate a commercial transaction’ for its manufacturing facility in Malta has already borne fruit.
In March, Business of Cannabis reported that Sadoun, who has served as a financial advisor to the company for some time, was granted three months exclusivity to secure a potential investment, contract manufacturing deal, or a supply and distribution agreement of no less than $1m, payable from profits generated by the counterparty.
This week, it informed investors that its has now signed a collaboration agreement with David Trading, granting it exclusive operational rights to its EU-GMP-certified manufacturing facility for a period of 49 years.
The deal will transfer full managerial and financial responsibility for the facility to David Trading, which will now oversee all aspects of operation from staffing and maintenance to regulatory compliance and debt obligations.
Under the agreement, David Trading Ltd. will continue producing CimetrA, Argent’s flagship therapeutic, at a cost plus 25%, ensuring uninterrupted supply. The facility will also expand its output to include new pharmaceutical products pending regulatory approvals.
The move is expected to cut Argent’s annual operating expenses by up to US$1m, and further collaboration is under consideration, with both parties evaluating the addition of contract manufacturing services for third-party clients.
Additionally, David Trading has secured a 49-year irrevocable option to acquire 100% of the facility’s equity. Valued at USD $1 million, the share-swap transaction is subject to regulatory approval from Maltese and ASX authorities.
Kanabo
Conversely, LSE-listed digital health services operator Kanabo announced that its full-year 2024 results will now be delayed ‘in light of uncertainty regarding its financial position’.
Despite issuing a relatively positive financial update in early March, Kanabo said this week that ‘its financial position has become more uncertain over the past month’.
As it continues to ‘review its strategic direction’, including an ambitious but resource-heavy commercial AI strategy, Kanabo says it is now engaged in ‘ongoing discussions regarding potential restructuring of its business’.
This, it cautioned, may involve the disposal of assets, mergers or a restructuring of its core business lines.
“The company is also continuing to assess its capital needs and funding requirements, including potential fundraising alternatives,” it continued.
In an update published last month, Kanabo reported a 44% increase in revenue for the full year to £1.3m, up from £0.9m in 2023.
This increase in revenue appeared to be balanced across the whole year, with the company reporting a 55% increase for H1 of 2024 in September to £694k.
The double-digit growth was attributed to numerous ‘strategic initiatives’ including a raft of AI integration across its operations, alongside its ongoing cultivation project in Spain.
At its flagship digital ‘GP Service’, Kanabo has integrated an AI-driven ‘DocNow’ system which automates and analyses patient information ahead of a consultation, reportedly increasing doctor’s consultation capacity from three to 20 sessions per hour.
It is also in ‘ongoing discussions’ regarding the integration of an ‘AI-powered triage system’, which it says generates 33% gross profit per consultation, and sees less than 10% of AI-triaged cases rejected by clinical professionals.
Despite these financial gains, the company is still a loss maker, posting an EBITDA loss of £1.9m in 2024.
Jazz Pharmaceuticals
The producer of the world’s most widely accessible pharmaceutical cannabis drug, Epidyolex, has seen its stock drop by nearly 20% this week, hitting a near 52 week low.
Usually a reliable stock performer, the multi-billion dollar pharmaceutical company has been caught in the panic surrounding Trump’s tariff barrage.
While overnight the White House has announced a 90-day pause on every country other than China, sending stock markets into a frenzy, the uncertainty has hit the international company and the sector as a whole.
UBS analysts on Tuesday adjusted their target price for Jazz down from $179 to $166, but kept its buy rating for the stock.
This is due to its exposure to tariffs given the size of its footprint in the US market, and its international supply chain.
Epidyolex, which achieved nearly $1bn in sales last year, is produced in the UK, then exported around the world, meaning any US sales will be hit with a 10% price increase.
According to UBS, while Jazz has some excess manufacturing capacity in the US, transferring its operations in-country would be cumbersome and costly.
Elsewhere Jazz’s oxybates are manufactured in Ireland, and its oncology products are produced in Italy.
Jazz was far from the only international pharmaceutical company to take a hit on the stock exchange.
The UK drug sector took a £14 hit, with AstraZeneca and GSK stock dropping sharply on Wednesday after Trump said the US would soon issue a ‘major tariff on pharmaceuticals’, which he believes will see the big players ‘come rushing back into our country because we are the big market’.
