Should You Invest in Cure Pharmaceutical Holding Corp?
Cure Pharmaceutical Holding Corp CURR (OTC)
Recommendation: See Below
CURE Pharmaceutical Holding Corp. focuses on the development and manufacturing of drug formulation and drug delivery technologies in novel dosage forms (thin wafers and thin films). Its commercial products include CURE 3068, and CURE 5079. The company was founded in 2014 and is headquartered in Oxnard, CA.
Fundamentals
Profile:
HQ: Oxnard, CA, USA
Founded: 2011
Facilities: CA
Symbol: CURR (OTC)
Focus: Strong
CURE Pharmaceutical is a fully integrated pre-clinical stage drug delivery company. CURE is a developer and manufacturer of oral thin films (CureFilm) among many other interesting products. These films are on the market today with an array of different active pharmaceutical ingredients (APIs) made in a cGMP manufacturing facility. CURE offers advanced development and manufacturing of CureFilm pharmaceutical and veterinarian products that are all IP protected. Alongside its stand-alone CureFilm technology, CURE has developed an array of products in cutting-edge delivery platforms, such as sublingual and transdermal applications.
Size: Neutral
Market Cap: US $155 mil
Enterprise value: $147.6 mil
# of employees: 15
Markets: Strong
Primary: USA
Secondary: Canada, Europe
Subsidiaries:
Majority: Chemistry Holdings Inc., Oak Therapeutics, Inc., CURE Pharmaceutical Corporation
Minority interests: None
Operations: Neutral
Cultivation:
Present capacity: None
CURE has positioned itself to advance numerous therapeutic categories, including the pharmaceutical cannabis sector with partnerships in the U.S., Canada, Israel, and Germany, among other markets.
Distribution: N/A
Direct sales: None
Store networks: None
Supply Agreements: None
Integration/Diversification: N/A
Vertically integrated: No
Horizontally diversified: No
Financials: Weak
Outstanding shares (diluted): 44 mil
Revenue last year: $0.6 mil
EPS: ($1.01)
Management: Strong
CEO: Robert Davidson
CFO: Michael Redard
COO: Jessica Rousset
CSO: Dr. Vered Gigi
Branding: Weak
Cure has recently started initiatives to commercialize their products once formulation and pre-clinical trials are a bit further down the road.
Valuation: Neutral
Current share price: US $3.66
Price to Book: 12.73
52 Week Low/High: $1.19 to $5.83
Price to Sales: 64.2 (Biopharma Industry Avg. = 7.5)
Financings: Weak
Cure spent $1.4 million on drug development last year. This large amount is not uncommon for pharma companies to spend heavily on R&D. They’ll need a lot of cash to continue development as they now have six products in their pipeline and we don’t see where this cash will come from.
Risks: Neutral
The risks of investing in this company may be somewhat lower than many cannabis companies given their pharmaceutical focus. However, given the rapid changes affecting the cannabis industry in particular, no company can guarantee profitability.
Should You Invest in Cure Pharmaceutical Holding Corp?
Recommendation: Weak
Cure Pharma is in the business of developing drug candidates using their own delivery system of thin films and wafers. They currently have six products in various stages of drug delivery (both cannabinoid-based and non-cannabinoid based products). They may start to see revenue from sales of CureFilm Sleep products, which should be launching very soon. This is a good sign since they currently have no revenue.
Cure management is strong, which is a good sign since they have such a long pathway for revenue. They are currently spending more than they generate in revenue, which isn’t uncommon for pharma companies but will need to secure cash to fund R&D efforts for the coming years.
Will it’s stock price improve in the long term? Don’t bet on it in the near term.
Based on the most recent annual filings, Cure’s price to sales (P/S) is 64.2 which is high for most industries but at the same time not uncommon for this industry. Based on this ratio, Cure’s stock is quite risky, however, if you have a higher risk appetite then you can purchasing now.
The price to earnings ratio is used for measuring the company’s current share price relative to its per-share earnings. When P/E is high it suggests that investors are expecting higher earnings growth in the near future as compared to the companies with a lower Price to Earnings ratio. A low P/E can indicate either that a company may currently be undervalued or that the company is doing exceptionally well relative to its past trends. Cure’s price to earnings ratio was at -4.32.
Also interesting, and troublesome is their debt to capital ratio of 572. That is a lot of debt. Many pharma companies burn cash at very high rates until regulatory approval, which opens the doors for both revenue and large increases in their stock value. Cure may hit one of these home runs, but all six of the products are so far from generating revenue that this stock is a long term play at best.
For these reasons, we think Cure, at or near its current price of $2.34 a share (as of March 2020), is a wait and see opportunity.
Should You Invest in Cure Pharmaceutical Holding Corp?
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