Stocks’ Details
 

BARD1 Life Sciences Limited

 
BARD1 Announces Merger with Sienna: BARD1 Life Sciences Limited (ASX: BD1) is a medical technology company that develops non-invasive diagnosic tests for early detection of cancer.
 
Merger Announcement: The company recently updated that it will be merging its business with Sienna Cancer Diagnostics Limited, to put forward a deep development pipeline in the area of early and accurate diagnosis of cancer. As per the merger agreement, Sienna shareholders will be receiving 13 shares in BARD1 for every 5 shares in Sienna. The shareholder meeting to approve the merger is expected to be held in July 2020.
 
New Contract:The company has recently announced about the Consultancy and Commercial Research Agreement with the Mucosal Immunology Research Group at the Griffith University. Under the agreement, the Group will be providing consultancy and scientific services for the development and commercialization of BARD1’s technology for diagnosis of breast, lung and ovarian cancer.
 
Half Yearly Results: During the half year ended 31^st December 2019, the company reported a net loss of $1.6 million. During the period, the company increased its spending on research and development, which stood at $212,210, up $35,668 on the prior corresponding period. The period was marked by various developments including, progress in development program, contract extension, and commencement of optimization activities.
 

Income Statement (Source: Company Reports)

Stock Recommendation:The stock of the company corrected by 18.75% in the past 3 months and is currently trading below the average of its 52-week low and high level of $0.017 - $0.056. The merger with Sienna is expected to result in significant savings as duplicate resources will be eliminated from the system. The company aims to build a valuable development pipeline of cancer diagnostic tests with Sienna and will look forward to additional opportunities for growth. During 1HFY20, revenue of the company increased by 98.3% on the prior corresponding period. Considering the awaited merger with Sienna Cancer Diagnostics Limited and the ongoing efforts for business development, we have a watch stance on the stock at the current market price of $0.025, down 3.846% on 14^th April 2020.

 
Sienna Cancer Diagnostics Limited

Sienna Forms Clinical Advisory Board: Sienna Cancer Diagnostics Limited (ASX: SDX) is a medical technology company engaged in developing diagnostic tests to assist in early and accurate detection of cancer.

Merger with BARD1: The company has recently announced a merger with BARD1 Life Sciences Limited to delve deeper into the cancer diagnostics field and create a deep development pipeline in the area. Complimentary development programs of the both the parties will be combined to create a valuable platform for the detection of Pancreatic, Ovarian, Breast and Bladder cancers. However, the scope of development will not be limited to the above types and may extend to other areas upon medical need.

The company has recently formed a Clinical Advisory Board to bring in the required expertise to develop and commercialise its cancer diagnostic tests. The most recent announcement on the Board has been Professor Geoff McCaghan, who will be a valuable asset for the company with an extensive clinical experience.

Half Yearly Results: During the six months ended 31^st December 2019, the company reported revenue amounting to $300,519, representing an increase of 9.3% on the prior corresponding half. Loss for the period came in at $1.42 million, depicting an improvement of 57.3% on the pcp. Both product revenue and gross profit improved on the prior corresponding half and stood at $300,519 and $274,941, respectively.


Income Statement (Source: Company Reports)
 
Stock Recommendation:The stock of the company gave positive returns of 36.59% in the past 3 months and is currently trading above the average of its 52-week low and high level of $0.020 - $0.075. The company has an EV/Sales multiple of 17x on TTM basis, as compared to the industry median of 8.4x. The merger of Sienna with BARD1 is expected to be executed in July 2020. Considering the backdrop of the above factors, we have a watch stance on the stock at the current market price of $0.051, down 8.929% on 14^th April 2020.

Creso Pharma Limited

Rise in Demand in the Canadian Market: Creso Pharma Limited (ASX: CPH) develops cannabis and hemp derived therapeutic, nutraceutical and life-style products for human and animal health.

The company has in place a convertible securities agreement with L1 Capital Global Opportunities Master Fund. As per the recent Collateral Purchase Notice and a Top-Up Notice from L1 Capital, the number of Tranche 1 Convertible Notes held by the CS Third Nominees Pty Limited, the nominee of L1 Capital, has been reduced to Tranche 1 Convertible 1,319,747 Notes, from 1,666,667 earlier. Also, the company has agreed to issue Additional Collateral Shares in the form of 10,812,526 fully paid ordinary shares to the nominee to top up its outstanding balance of collateral shares.

Targeting Distribution in Pakistan: In another important update, the company informed that it has entered into a binding letter of intent with Highnoon Laboratories and Route2 Health, wherein, both the parties will be considering a strategic collaboration to expand the distribution of Cresco Pharma’s innovative hemp derived therapeutic products in Pakistan. The terms of the collaboration will be executed via an agreement within the next three months.

Recently, the company informed the market that it has delivered a significant quantity of anibidiol® Plus to Virbac International, earning ~$200,000 in revenue. Since 2018, Virbac S.A has been distributing the product throughout Europe and has expanded the market into over 10 countries to date.

In response to the outbreak of coronavirus, the company has taken the necessary safety measures, implementing a remote working policy across the Australian and Swiss operations and implementing social distancing measures at the Canadian operations. It is also giving up all the non-essential costs to ensure financial stability.

During the year ended 31^st December 2019, revenue from sale of products stood at $3.62 million, up 549% on the prior corresponding period. Net loss improved by 10% as compared to the pcp and stood at $15.05 million.


Segment-Wise Results (Source: Company Reports)

Stock Recommendation:The stock of the company corrected by 38% in the past 3 months and is currently trading close to its 52-week low level of $0.043. Despite the global economic distress due to COVID-19, the company has seen a surge in demand for medical cannabis in the Canadian market. The company is also working on various new products to establish an innovative product portfolio. Hence, with the rise in demand for Mernova, its facility in Canada, the company has various potential deals that will drive future revenues from the product. The company has an EV/Sales multiple of 5.3x on TTM basis, as compared to the industry median of 8.4x. Considering the backdrop of the above factors, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.088, down 5.376% on 14^th April 2020.
 
 
 
Comparative Price Chart (Source: Thomson Reuters)

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