Little Biotech that Can

PreveCeutical Medical (PRVCF:  OTC or 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 selection 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 in order to finance an ambitious research and development program.

Through its research partner at the University of Queensland in Australia, the Company is pursuing a wide-ranging drug research platform.  When the therapeutic candidates reach commercial stage, the arrangement gives PreveCeutical exclusive license of resulting technologies and provides for royalties to the University’s commercial arm, UniQuest, from future revenue streams. 

Recent advances demonstrate the team’s dedication and tenacity in moving forward with PreveCeutical’s research and development agenda despite lean capital resources.  The following list of accomplishments helps distinguish the company as the ‘little biotech that can.’

Nasal Drug Delivery System.  The most advanced project in the development program is the Sol-Gel drug delivery system originated at the University of Queensland.  Cannabinoids are the first compounds under testing.  The team has moved on to the third and final stage in which a cannabinoid release from the extract-infused Sol-gel will be evaluated in human nasal mucosal tissue.

Diabetes and Obesity.  The research team is developing a gene therapy using smart-siRNAs to target genes implicated in both Type 2 diabetes and obesity.  A gene carrier will deliver and release the smart-siRNA at target cells.  A small group of siRNAs have  been identified as important in down-regulating a single target gene thought to be involved in Type 2 diabetes and obesity.

Non-addictive Analgesic.  PreveCeutical Medical and its research partner at the University of Queensland are pursuing work on a protein-based analgesic compound.  The compound is expected to be commercialized as a non-addictive pain drug.  The research team has successfully designed and synthesized lead peptide constructs that were screened for potency.  The peptides were found to be on par with available pain killers such as morphine. 

Glioma.  PreveCeutical research team continues work on ‘nature identical’ versions of peptides identified as providing the therapeutic properties of blue scorpion venom.  The objective is to achieve stable version of the peptides that can be consistently and economically produced in volume.  Thirteen peptides have been synthesized and tested.   Four out of the thirteen peptides have been found to be as active as chlorotoxin in inhibiting the activity of a target protein implicated in brain cancer.  Two lead peptides also showed modest suppression of a cancer cell markers that is known to have a role in promoting cancer spread.  Both of these are much less complex than Chlorotoxin.  Management is exploring partnering to expedite pre-clinical evaluation that could lead to proof of concept for the peptides.

Outlook

Despite continued progress with an ambitious research and development project portfolio, shares of PreveCeutical Medical have been under continued pressure.  The shares set a new 52-week low in early October 2019.  Worries over capital adequacy are mostly like on the minds of many investors, who observe the struggles and set backs in private placements of common stock.  A dust up with a Canadian financial group that is currently the focus of a regulatory investigation has also cast a shadow on management’s ability to bring in needed capital.  On the flip side, senior officers have been quick to demonstrate their continued confidence in the Company’s strategy and projects by extending credit to the company.  Investors can take note when insiders open their checkbooks to make follow-on investments.

At least temporary relief has come from two sources:  sale of an option on certain promising intellectual property and a tax refund from Australia’s tax authority.  The extra coins in PreveCeutical’s pocket could help the scrappy biotech find success even with a thin purse.

Shares of PreveCeutical Medical should be regarded as speculative and appropriate only for those investors with a high tolerance for risk and price volatility.

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.  Crystal Equity Research publishes research coverage of PreveCeutical Medical through its Focus Report series sponsored by issuers and their agents.