Zachs Small-Cap Research has initiated coverage on FSD Pharma (CSE:HUGE) (OTCMKTS:FSDDF) with a comparable analysis valuation price target of $0.23 on the expectation that the stock will attain a second quartile P/B (price/book) ratio of 4.1.
FSD Pharma shares were trading at C$0.095 in early Toronto trade on Tuesday, and at $0.0769 on the OTC in New York.
In a note to clients, Zachs’ analysts Steven Ralston pointed out that FSD Pharma is a cannabis-platform company focused on the cultivation, processing and distribution of pharmaceutical-grade cannabis as well as the development of pharmaceutical and synthetic cannabinoid-based treatments for a variety of clinical indications.
He noted that the firm’s first commercial crop of pharmaceutical-grade cannabis has been harvested at its Cobourg facility and is being offered for direct sale through the company’s website via the fulfillment of prescriptions.
The analyst said: “Through strategic alliances, collaborative agreements and acquisitions, FSD is pursuing the development of FDA-approved medications for pain management, fibromyalgia, IBS and coronary artery disease.”
He sees near term catalysts for the stock as coming from general news flow on the management internal initiatives and external partnerships and is watching for:
- Operating results of the online initiative at FVPharma.com;
- Completion of capacity expansion at Cobourg facility;
- Solarvest development of a proof of concept that that algae can express pharmaceutical-grade cannabinoids through biosynthesis;
- Canntab Therapeutics start of manufacturing commercial batches of oil-filled gel capsules at FSD’s Cobourg facility;
- Canntab Therapeutics’s XR tablet awaiting approval by Health Canada
- The analysts also noted that the company is waiting results of clinical trials at:
- SciCann Therapeutics for IBS
- Prismic Pharmaceuticals for pain management and fibromyalgia
The company will also build awareness of the company and management’s strategy, Ralston added, by attending analyst conferences and industry forums, including the 11th Annual Biotech Showcase in San Francisco (January 7, 2019); Arcview Cannabis Investor Forum in Vancouver (April 25, 2019); 2019 BIO International Convention in Philadelphia ((June 4, 2019); and MJ Link Micro Investor Conference in NYC (June 25, 2019)
The Zachs’ analyst concluded that FSD Pharma is well positioned to benefit from the legalization of cannabis in Canada, Germany, the rest of the Eurozone and the United States.
Contact the author at [email protected]