Cannabinoid-Based Nutraceuticals and Pharmaceuticals.
Fundamentals
Profile
HQ: Vancouver, BC, Canada
Founded: 2002. Formerly known as Neurokine Pharmaceuticals
Symbol: PVOT (CNX), PVOTF (OTC)
Focus: Neutral
Pivot Pharmaceuticals Inc. is a biopharma company developing cannabis-derived pharmaceuticals and nutraceuticals using innovative drug delivery technologies. They are primarily focused on their novel delivery systems, to either buy/license cannabis-derived products to sell under their brand using these delivery systems, or to license the delivery systems to companies with products.
Their website shows many products fully developed with packaging and branding but with a note saying—coming soon. Their product descriptions rarely mention what illness will be treated, leading us to believe the products—or at least the product stories—are not all well developed. There is brief mention about anti-inflammatory benefits gels for tired muscles. And pet products for a variety of symptoms.
Size
Market Cap: US $23 mil
Enterprise Value: $30 mil
# of employees: about 5
Markets: Neutral to Good
California, Western Europe, Colorado, Canada
Operations: Weak (not producing much product yet)
R&D: They spent only $86,000 on R&D last quarter. This indicates they are now focusing more on developing and selling products to generate revenue, versus R&D.
Production:
In October they ordered their European manufacturer to produce 15,000 bottles of 1% CBD solution for sale in German pharmacies.
Distribution: N/A
Direct sales: not yet, but possibly soon.
Store networks: Product will be for sale in German pharmacies in Dec 2018
Supply agreements: not yet, but looking for this to get supply of cannabis for CBD
Partnerships/Subsidiaries:
Its medical cannabis division, Pivot Green Stream Health Solutions Inc. (PGS), conducts R&D. Its U.S. subsidiary, Pivot Naturals, LLC, based in Costa Mesa, California, will manufacture powderized cannabis products such as food additives, capsules, bulk powder and stick packs to the California market.
Integration/Diversification:
Vertically integrated: Eventually yes: R&D, manufacture and distribution businesses/partnerships
Horizontally diversified: Eventually yes, developing a variety of products, though all cannabis-derived.
Financials: Weak (no revenue)
Cash: US $ 500,000 (end July 2018)
Management: Neutral
CEO: Patrick Frankham, PHD
Exec VP, Chair: Dr. Joseph Borovsky, PHD
Medical Officer: Wolfgang Renz, MD, PHD
CFO: Moira Ong, CPA, CA
Chief Science Officer: Dr. Leonid Lurya, MD, PHD
Branding: Neutral to Good
medical cannabis products, including: Capsules and tablets, bulk powder, stick packs, beverages, water soluble oral solutions, lotions creams and gels, pet products. They do not appear to have gone beyond packaging to develop complete selling stories and educational systems. Website is well-developed, but will need more selling information
Valuation: Neutral
Current share price: US$0.23
Price to Sales: NA (no sales yet)
EV / revenue: NA
Price /Book: 6.3
Financings: Weak
Completed a $3.9 million private placement in March of 2018. This was mostly spent when they reported $500 million in cash at the end of June. Then in late October, they raised another CAD$1.6 in a private placement.
Risks: High
given the newness of the market. The risks of investing in this company are very high, since it does not yet have any revenue or income.
Recommendation: >Weak
Like many companies in the cannabis biopharma area, Pivot has not yet sold any products as of late November 2018—but it expects sales to begin in December 2018 in Germany. It burned $3 million over the last 6 months, $1.4 million in the last quarter ending June 30, and had $500k left in cash at the end of June. It is probably very low on money right now, but appears close to making sales. If it can generate strong sales soon, it may avoid having to raise more money.