Going Natural

Energy is not the only field where attention to nature can inspire innovation.  Crystal Equity Research recently updated coverage of PreveCeutical Medical (PRVCF:  OTC, PREV:  CN), a biotechnology company focused on preventative health treatments.

Although still at an early stage, PreveCeutical has built up a portfolio of development projects using natural substances for preventative therapies and supplements.  The Company’s first commercial product is CELLB9, an oral solution of essential materials extracted from a novel peptide in the venom of scorpions that has been found helpful with the immune system. 

A wide ranging development program is in place to expand the Company’s product line.  Scientific efforts for each program are being undertaken at the University of Queensland in Australia by teams led by Dr. Harry Parekh, the Company’s Chief Research Officer.  PreveCeutical has a development and licensing agreement in place with UniQuest Pty. Ltd., the commercial arm of the University of Queensland.  The agreement ensures PreveCeutical has licensure rights to all intellectual innovations created through joint research projects.

Research and development pipeline:

·        Sol-Gel drug delivery system based on nose-to-brain process; cannabinoids are among first compounds under testing

·        Smart RNA Gene Therapy for the treatment of obesity and early stage diabetes 

·        Peptide and protein identification in the venom of Caribbean blue scorpion venom for the purposes of engineering ‘nature identical’ compounds

·        Non-addictive analgesics based a new the peptide library using UniQuest’s proprietary ‘disulfide linker’ technology

PreveCeutical’s research and development activities are carried out by employees and affiliates of UniQuest Pty. Ltd., the Company’s primary research partner.  The scientific team is coordinated by Dr.Parekh, who overseas all of PreveCeutical Medical’s research projects.  We note that the Company’s relationship with UniQuest is strengthened by the addition of Dr. Khaled, who was previously affiliated with UniQuest.

In March 2018, PreveCeutical Medical announced the formation of a new corporate presence in Australia.  PreveCeutical Pty. Ltd. has been established as a wholly-owned subsidiary of the parent corporation.  The subsidiary may qualify for government tax incentives or grants extended to research and development companies.  For example, Australia offers a tax offset program on qualifying research projects.  Having a formal corporate presence in Australia may also facilitate the formation of research partnerships and clinical relationships.

The year 2018 may be a significant year for PreveCeutical Medical with numerous value-driving catalysts unfolding. The company’s research and development partner, UniQuest, has commenced work on three of the Company’s R&D projects.  Granted in each case the work at the current stage is painstaking and detailed.  This is not always conducive to flashy press releases.  However, the company’s chief research scientist and newly appointed regional leadership have both proven to be strong communicators, providing visibility into the development pipeline.

The Company appears closer to securing capital through a private placement of common stocks and warrants.  Gross proceeds of CA$4.0 million (US$3.1 million) is expected to support development work at least through the end of 2018.  While dilutive, this infusion of capital is critical to moving the Company forward and could be considered a value-creating step.

Trading volume has increased in recent months and liquidity could improve even more with an increase in the constructive float following a stock split.  PRVCF is speculative and may be suitable for investors with a high tolerance for risk.  For the rest it is well placed on a watch list for the day when early stage hurdles (and the risks) have been cleared.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.   PreveCeutical Medical is the subject of research by Crystal Equity Research under the Focus Report series for issuer sponsored research coverage. Please note the important disclosures and disclaimers at end of all Crystal Equity Research reports.