Tiny Biotech Advances Its Pipeline

PreveCeutical Medical (PRVCF:  OTC; PREV:  CN) is an early stage life sciences company with a focus on compounds using natural substances for health and wellness products.  The Company has licensed a clutch of natural health products for sleep, pain and anxiety treatment, including a commercially-proven blue scorpion venom solution.  PreveCeutical intends to bring these unregulated products to market to generate revenue in the near-term that could be used to financial corporate activities as well as research and development work on additional compounds.  Despite a thin purse, PreveCeutical’s management team has managed to take one step after another, doggedly pursuing an ambitious pipeline of projects.

The company is working through a research partner UniQuest Pty., Ltd., the commercial arm of the University of Queensland in Australia.  Dr. Harry Parekh, PreveCeutical’s Chief Research Officer, is leading a team of scientists at the university’s Pharmacy Australia Centre of Excellence and coordinating work with additional research affiliate such as Murdoch University in Australia.  The arrangement gives the Company exclusive license of resulting technologies and provides for royalties to UniQuest from future revenue streams when the projects reach commercial stage. 

The most advanced project in the development program is the Sol-Gel drug delivery system originated at UniQuest.  The Sol-Gel nose-to-brain approach is potentially helpful in reducing side effects and increasing drug effectiveness.  Cannabinoids are the first compounds under testing.

In our view, PreveCeutical with its partner UniQuest is at the forefront of work on intranasal drug delivery. The innovative Sol-Gel nose-to-brain system is expected to help reduce side effects and increase effectiveness of therapeutic compounds.  The Sol-Gel system loaded with a cannabinoid-based compound has been tested in a nasal cast, successfully demonstrating delivery to and retention of the therapeutic compound at target nasal tissue.  UniQuest has recently applied for the use of human tissue to confirm the gel performance.

Additional projects in the pipeline are similarly aimed at using naturally derived compounds to treat diseases with large patient populations.

Smart RNA Dual Gene Therapy for the treatment of obesity and early stage diabetes  -  The UniQuest team is developing a gene therapy using smart-siRNAs to target a single gene implicated in both Type 2 diabetes and obesity. As many as 200 gene carrier-and-release constructs have been designed and are being screened for effectiveness in target gene silencing.

Peptide and protein identification in the venom of Caribbean blue scorpion venom for the purposes of engineering ‘nature identical’ compounds  -  · In early 2019, two new patent applications have made in Australia for cyclic peptides and their use in pain management.  The applications seek to protect recently work completed in the Company’s analgesics research program for the development of non-addictive alternatives to opioid pain therapies.

Peptide library using the University of Queensland proprietary ‘disulfide linker’ technology licensed by PreveCeutical Medical  -  In early 2019, two new patent applications have made in Australia for cyclic peptides and their use in pain management.  The applications seek to protect recently work completed in the Company’s analgesics research program for the development of non-addictive alternatives to opioid pain therapies.

 PreveCeutical Medical has been capitalized with a mix of common stock and debt.  Although successful in raising capital, in our view, the Company continues to be capital constrained.  The Company’s auditors included a note related to the ability of the Company to continue as a going concern.

Since the close of the fiscal year 2018, the company has taken steps to raise additional capital or otherwise improve its balance sheet.  In February 2019, PreveCeutical sold 6.1 million shares of common stock and warrants at CN$0.05 for a total of CN$305,000 (US$226,310). 

Management is also managing the timing of future cash payments. In December 2018, there was CN$607,978 (US$451,120) in convertible debt included in current obligations and CN$3.0 million (US$2.2 million) in long-term liabilities.   The lenders, current and former employees of the Company, have agreed not to forego payment until January 2020. 

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 featured in the Focus Report series published by CrystalEquity Research.  Please not all disclosures and disclaimers at the end of all Crystal Equity Research publications.