What does DanCann Pharma do?
DanCann Pharma is a Danish biopharmaceutical company, established in 2018, licensed for production and distribution of products based on cannabinoids. The company conducts its business through work with both cannabis and cannabinoids as handling of the cannabis plant is part of the process in producing cannabinoids, the component used for therapeutic and medical purposes.
DanCann Pharma is an early-stage company with the intention to establish itself on the European medicinal cannabis market. The company is overall focused on discovering, developing, manufacturing, and commercializing novel cannabinoid therapeutics in a broad range of disease areas, dedicated to the commercialization of innovative prescription products targeting the European market. The company already has market activities in Denmark and has also set its focus on Germany and other European markets such as Poland, Israel, Sweden, and the UK.
What patient groups do you focus on?
DanCann Pharma is built from a foundation of care, and with a passion to improve health and the quality of life for patients with challenges and has its primary focus on patient groups with unmet needs. As a company, DanCann Pharma wants to offer an alternative to the many patients who have not achieved the required quality of life with known medicine as of today.
The company works according to a formula based on an equation between evidence and relative number of patients who are prescribed the product for the disease. This is the superior mechanism for the company’s entire portfolio and its future construction, built on data and evidence. There is a huge amount of R&D going on in the area, and especially the area around pain relief is super interesting, as an alternative to the classic opioid preparations we know as of today.
In Denmark alone, approx. 1,300,000 people (over 18 year) suffer from chronic pain constantly or episodically, which is more than 20% of the total population. Examples of conditions are osteoarthritis and osteoporosis, but patients with MS (multiple sclerosis) and pain and nausea from chemotherapy can also count in this category.
Among the 1,300,000 patients in Denmark suffering from chronic pain, there are at present approx. +500,000 patients being treated with strong opioids (i.e., fentanyl, morphine, and oxycodone). Medicinal cannabis can be used as a supplement – to reduce the use of strong opioids – to give patients a better quality of life as these strong opioids are very addictive and have strong negative side effects.
Cannabis and cannabinoids can potentially disrupt many diseases, and on a global level, where DanCann Pharma mainly has its focus on pain patients, which today is mainly treated with opioids, that counts a market value of USD 25.4 billion in 2018.
What is DanCann Pharma´s business model?
DanCann Pharma’s business model is based on different pillars. The first pillar is to import and distribute medical cannabis products in the Nordics and in Europe. The second pillar is to cultivate, process, and export cannabis ingredients (APIs) and bulk goods. Lastly, the company is licensing and acquiring exclusive rights to innovative products and clinically de-risked, commercial stage proprietary drugs and pharmaceuticals.
DanCann Pharma is intending to capitalize on opportunities in the growing market for medicinal cannabis products in Europe. Eased regulatory environment, launch of new products, awareness as well as clinical evidence, and an in general favorable stance to medicinal cannabis has been key for the company’s progress.
DanCann Pharma is already well positioned when considering access to the market. The company has several distributions agreements and LOI’s signed, giving DanCann Pharma a very interesting product portfolio for the Nordic as well as the European market. As mentioned above, DanCann Pharma’s business plan stands on different pillars spreading risks, and the company already has interesting collaborations that opens the potential for revenue streams in near future.
You are currently doing a rights issue, what will the capital be used for?
DanCann Pharma expects to achieve its commercial breakthrough during the upcoming year, partly through the newly signed binding supply agreement with the German wholesaler WEECO Pharma with a commitment of approx. DKK 40 million. The company also expects to introduce new products under the Danish Pilot Programme and to achieve sales for in-house produced products from 2023 going forward. DanCann Pharma furthermore aims to accelerate and extend its product portfolio of imported medical cannabis and cannabinoid-based drugs and pharmaceuticals.
This by licensing and acquiring exclusive rights to innovative medical cannabis products and clinically de-risked, commercial stage, proprietary drugs, and pharmaceuticals, and hereby building future rapidly and growing revenue stream based on the commercialized product portfolio and pipeline.
Through the rights issue the company will receive a minimum of DKK 21.9 million, before costs. The company expects that, together with fully subscribed warrants, the transaction will finance the business until the company reaches break-even.
The company intends to mainly use the net proceed from the rights issue in the manner presented below:
- Operation cost: approx. 55%
– Finalizing the EU-GMP approval process
– Finalizing the development of the inhouse product portfolio - Further development of the product portfolio: approx. 20%
- Repayment of loan: approx. 25%
During that time, the company will primarily be focusing on getting the EU-GMP approval of Biotech Pharm1 from the Danish Medicines Agency (expected in Q4 2022), achieving approval of oil product for the Danish market, signing additional LOI’s and making binding agreements, completing the first sales of cannabis bulk, and entering into new partnerships.
Lastly, what would you like to say to investors that are interested in DanCann Pharma?
I will give you three good reasons to invest:
- Medical cannabis continues to impress in several key areas: strong growth rate, increasing popularity and widespread acceptance – an extremely powerful combination for industry-related companies among the first movers in Europe.
- We expect our commercial breakthrough for our first plant, Biotech Pharm1. With a certification from the Danish Medicines Agency regarding the production of medical cannabis, produced under recognized EU GMP standards.
- The investment case is historically cheap despite the two points above. You now can buy into DanCann Pharma, which has raised growth capital for more than DKK 80 million DKK (approx. 4 DKK per share) as well as the commercial breakthrough, which will come in the near future and result in break-even in 2024. At a price of DKK 17 million in pre-money valuation, equivalent to DKK 0.60 per share.
So, if you believe in the future of treatment with cannabinoids and medical cannabis, you should definitely consider investing in DanCann Pharma.
I hope that you will join our transaction, and ultimately our company, and help us change the world for the better.