Stocks’ Details
 

Medlab Clinical Limited

 
MDC Completes Depression Trial at QUT: A medical life science company, Medlab Clinical Limited (ASX: MDC) is engaged in developing therapeutic pathways for diagnosed chronic illnesses. On 1 April 2020, the company informed that it has concluded the NRGBiotic™ depression trial conducted at the Queensland University of Technology (QUT). NRGBiotic™ is now available throughout Australian Pharmacies.
 
Update on COVID-19 Impact: On 18 March 2020, the company informed the market that none of the employees have been tested positive for COVID-19 till date.  With this good news MDC remains alert and ready to act in response to government guidance as required. Notably, in the event of company closure due to COVID-19, the staff is well positioned to continue working from home.
 
1HFY20 Operational Highlights for the Period ended 31^st December 2019: MDC declared its half-yearly results, wherein the company reported revenue and other income of $2.52 million, as compared to $3.1 million reported in the year-ago period. During the period, net loss amounted to $7.13 million, as compared to a net loss of $3.77 million reported in the year-ago period. The company exited the period with cash and cash equivalents of $9.69 million, with total borrowings of $593K. Net cash used in operating activities stood at $5.23 million in 1HFY20, as compared to cash outflow of $3.69 million in 1HFY19.
 

1HFY20 Income Statement (Source: Company Reports)
 
Stock Recommendation: The stock of MDC is trading at $0.22 with a market capitalization of ~$44.31 million. The stock made a 52-week low and high of $0.125 and $0.560 and is currently trading at the lower band of its 52-week trading range. The stock has corrected ~37.7% and ~55.81% in the last three months and six months, respectively. On the valuation front, the stock is trading at an EV/Sales multiple of 4.9x as compared to the industry median of 6.3x on TTM (Trailing Twelve Months) basis. Considering the aforesaid facts, current trading levels and business prospects, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.22, up 15.789% as on 1 April 2020, due to completion of depression trials for NRGBiotic™.

AusCann Group Holdings Limited

 
AC8 to Commence its First Clinical Trial: AusCann Group Holdings Limited (ASX: AC8) is involved in the advancement of a cannabinoid pharmaceutical product and conducting clinical trials for the same. On 31^st March 2020, the company announced that it has received approval to start its first clinical trial at an independent clinical site - Nucleus Network. Notably, AC8’s capsule products are now available for prescription in Australia.
 
AC8 Gets R&D Tax Incentive Refund: Recently, the company stated that it has received a refund of $1.2 million from the Australian Taxation Office in accordance with the Australian Government’s R&D Tax Incentive Program. The expenditure was made in relation with the advancement of the Company’s cannabinoid-based hard-shell capsules.
 
Other Recent Updates: The company recently appointed Dr Marc Russo as its Chief Medical Advisor, replacing the previous chief medical advisor, Dr Schecter. In another update, AC8 announced thatKrista Bates, one of the directors in the company, has acquired 40,000 fully paid ordinary shares for a consideration of $0.22 per share.
 
Half Year Results Highlights for the Period Ended 31^st December 2019: During the period, the company reported revenues of 256.9K as compared to $466.3K reported in the year-ago period. During the period, net loss amounted to $3.4 million, as compared to a net loss of $4.4 million reported in the year-ago period. The company exited the period with cash and cash equivalents of $26.1 million. Net cash used in operating activities stood at $5.2 million in 1HFY20.
 

Key Highlights (Source: Company Reports)
 
Stock Recommendation: The stock is trading at $0.185 with a market capitalization of ~$60.24 million. The stock made a 52-week low and high of $0.140 - $0.530 and is currently trading at the lower band of the range. The stock has corrected ~44.12% in the last six months. On the valuation front, the stock is trading at a P/B multiple of 1.6x as compared to the industry average of 3.6x on TTM (Trailing Twelve Months) basis. Considering the aforesaid facts and current trading levels, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.185, down 2.632% as on 1 April 2020.
 

Cann Group Limited

 
Progress on New Production Facility Remains a Key Catalyst: Cann Group Limited (ASX: CAN) is involved in the cultivation of medicinal cannabis for medicinal and research purposes.
 
Half Year Results Highlights for the Period Ended 31^st December 2019: The company in its half year results, reported revenue from sales of $0.569 million.During the period, the business incurred an operating loss amounting to $8.4 million. During the period, the company remained on track for its new production facility near Mildura. Further, it declared a revised construction plan for the commissioning of 12,500 kgs of cannabis dry flower production by the end of CY20.Earnings per share for the period stood at 6 cents per share, up from 3.5 cents per share reported in the year ago period.The company exited the period with cash and cash equivalents of $8 million. Net cash used in operating activities stood at $6.6 million in 1HFY20, as compared to cash outflow of $4.1 million in 1HFY19.
 
 

Income Statement (Source: Company Reports)
 
Stock Recommendation: The stock of CAN is trading at $0.71 with a market capitalization of ~$98.27 million. The stock made a 52-week low and high of $0.375 - $2.570 and is currently trading at the lower band of its 52-week trading range. The stock has corrected ~55.34% in the last six months. On the valuation front, the stock is trading at a P/B multiple of 1.4x as compared to the industry average of 3.6x on TTM (Trailing Twelve Months) basis. Considering the aforesaid facts and current trading levels, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.71, up 2.899% as on 1 April 2020.
 
 
Comparative Price Chart (Source: Thomson Reuters)

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