2 small-cap healthcare stocks on the uptrend – ZLD and CPH

Stocks’ Details

Zelda Therapeutics Limited

Clinical Study results expected in late 2018: Zelda Therapeutics Limited (ASX: ZLD) has completed patient recruitment for Australia’s first clinical study of medical cannabis to treat insomnia. With this release, the stock surged up 4.545 percent on April 23, 2018. As a result of this, the next phase of the study will commence shortly with patients undergoing baseline sleep measurements before commencing pharmaceutical dosing. The Group has a number of clients across the globe and it is well placed in the market and has potentiality to move into commercialization phase based on the successful conclusion of this trial. Further, the management expects that the preliminary results from this clinical trial will be available in late 2018.


Research Focus (Source: Company Reports)

On the other hand, the Group has recently broadened its research focus and existing collaboration with Curtin University to target diabetes-related cognitive decline. This research will focus on studying the effect of a cannabinoid-based therapeutic moderating the effects of cerebral capillary damage associated with diabetes. Zelda’s research study will occur in well validated animal models of diabetic cognitive decline over the next 12-18 months. Moreover, positive results will allow Zelda to consider commercialisation opportunities of cannabinoid-based medicines in jurisdictions where it has a clear pathway to market and access to distribution partners. Meanwhile, the stock was up 4.76 per cent in past one week on the back of aforesaid development, as at April 20, 2018. We give a “Hold” recommendation on the stock at the current market price of $ 0.115.
 

Creso Pharma Limited

Creso to Launch Global Beer and Tonic Products with its Joint Venture: Creso Pharma Limited (ASX: CPH) has recently announced that CLV Frontier Brands Pty Ltd is planning to launch beer and tonic products in Europe and Canada market during the summer, with global sales to follow thereafter.  According to the release, the management expects that CLV partnership is an exciting business opportunity and it will support to provide high quality medical cannabis products across the globe over the coming period.  However, full details of the beer and tonic ranges will be released when CLV debuts its products and branding at a world-wide product launch.  As of now, Europe will be the initial focus for sales, due to Europe being the home market for the Baltic Beer Company, while the group is also pushing the launch of the products in Canada this summer. CLV will have vast commercialisation reach spanning various continents leveraging the networks of all three companies i.e., Creso Pharma Limited, Baltic Beer Company Ltd, and Canadian TSX Venture incorporated LGC Capital.


Corporate Structure (Source: Company Reports)

Further, Creso has a staged strategy for early access for patients – import Cannabis oils from Canada and transition own-sourced materials from Creso’s own production facilities (Mernova, Kunna). This will bring significant advancement to delivering medicinal cannabis through sophisticated products like CannaQIX. Moreover, Cannabinoid-based nutraceutical products could generate over $1 billion annually before 2019. The rise of this trend has seen an emergence of multinational pharmaceutical and food entity enter the market, using Europe as a hub for commercial operations. Hence, we expect that new product developments, product launches and further commercialization of product will support overall growth of the company in years to come. Meanwhile, the stock prices were up by 11.4 per cent in the past six months but declined by 19.11 per cent in past one month as on April 20, 2018. The stock was up 1.57% on April 23, 2018. We give a “Hold” recommendation on the stock at the current market price of $ 0.645.

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