While Cannabinoids are their specialty, CNBX Pharmaceuticals Inc.’s Value lies in Drug Discovery
CNBX Pharmaceuticals (OTCQB:CNBX)
Hence, the global market for cannabinoids and alternative therapeutics has been expanding into cancer treatment.
The total cannabinoids market in the U.S. alone was valued at $14.6 billion in 2021 and is expected to expand at a CAGR of 16.2%, according to Grand View Research. Since it is still a relatively novel industry, producers are still having trouble with the regulations in the cannabinoid industry. As the regulatory process for these products opens up and smooths out, more and more drug producers will be looking to wet their beak in this subsector.
When it comes to drug production, research and development (R&D) is the largest cost to drug manufacturers. Last year, Incyte Corporation (Nasdaq: INCY) spent over 83% of their revenue on R&D. Drug companies are seeking ways to accelerate the drug discovery process to save them time and money. The advancement of drug discovery is the future of the pharmaceutical industry and drug producers are competing to develop products more efficiently. To that point, the global drug discovery market generated revenues of over $58 billion in 2021. As we can see, there is already a large appetite in the market for companies with these capabilities.
CNBX Pharmaceuticals Inc. (OTCMKTS: CNBX) services that need for drug manufacturers. While they are focused primarily on the development of cannabinoid-based products to treat cancer, they have a coveted approach to discovery and development. Specifically, they have high throughput screening and preclinical research done in-house, proprietary artificial intelligence to develop formulations, a growing biobank of cancer cell lines and biopsies, as well as a database of biological response data. Incorporating all these aspects together effectively streamlines the pharmaceutical development process to minimize guesswork when it comes to the efficacy and safety of a drug being produced.
If we look at larger firm like Fate Therapeutics, Inc. (Nasdaq: FATE), which is currently a billion-dollar enterprise that recorded a net loss of about $300 million and 80% on its share value, investors are noticing inflated value and pulling back. Additionally, if we include another major player Prometheus Biosciences, Inc. (Nasdaq: RXDX), which also noted over $100 million in losses this year, exhibited a massive price to earnings ratio of 38. Moreover, the enterprise values of both of these drug manufacturers are significantly lower than their market capitalizations.
Contrarily, CNBX, possess a more favorable price to earnings and enterprise value to market capitalization ratios. As we can see, there is significant value available not only to consumers but to drug companies the need to bolster their pipeline.
Ultimately, it will not just be the Johnson & Johnsons and the Pfizers that pursue the technology that CNBX possesses.
Even companies with small market capitalizations like Sorrento Therapeutics, Inc. (Nasdaq: SRNE) will be pushed to acquire this technology. Sure, they can try to build it themselves, but it would simply be more worthwhile to utilize CNBX’s product. To explain, the databanks and software required for this technology are extremely difficult to develop.
Therefore, pharmaceutical manufacturers will recognize the value it will add to their bottom line.
Safe Harbor Statement
This release does not constitute an offer to sell or a solicitation of offers to buy any securities of any entity. Landon Capital received no direct compensation related to this release, although Landon Capital does hold a position in the company covered above. This release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. Forward-looking statements in this release are based on information available to us as of the date hereof. Actual results may differ materially from those stated or implied in such forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions or strategies regarding the future and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” and “would” or similar words. We assume no obligation to update the information included in this press release, whether because of new information, future events or otherwise.