We consider MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ) to be one of the most misunderstood growth stories in the cannabis industry and are favorable on how the business has advanced since 2020.
From entering new international markets to advancing initiatives that are focused on the biotech side of the cannabis industry, MediPharm has been nothing short of an execution story and is an opportunity to be aware of. The company represents a multi-faceted growth story and is a pharmaceutical firm that specializes in the development and manufacturing of cannabis active pharmaceutical ingredients (API) and finished products.
Following some major developments, MediPharm has evolved into a full-service biotech firm that can manufacture and sell cannabis APIs and pharmaceutical drug products. Due to this, the company can capitalize on the increasing demand for APIs at the global level and is positioned to record strong growth.
Granting of the Drug Establishment License is a Major Milestone
Earlier this week, MediPharm reported to have received a Drug Establishment License (DEL) from Health Canada (in accordance with the Food and Drugs Act and Regulations). We consider this to be an important milestone for the company as the DEL shows that it is following Good Manufacturing Practice (GMP) standards.
Another reason for the significance of the license is that it’s a first of its kind license for cannabis manufacturing in North America. A Canadian GMP DEL complements MediPharm Labs’ existing Australian TGA GMP certification. The license can be used for the manufacturing, testing and sale of API and pharmaceutical drug products that contain cannabis. The DEL includes drugs that have marketing authorizations as either novel or generic pharmaceutical drug products containing cannabis.
The DEL allows MediPharm to leverage mutual recognition agreements (MRA) that were established between Canada and other global regulatory authorities including the European Economic Area (consists of all EU member states as well as the three countries of the European Free Trade Association, Australia, the UK and Switzerland).
The granting of the DEL enhances MediPharm’s supply chain capabilities by allowing it to ship products from Canada to its global customer base. The development further strengthens the company’s global reach, including potential US pharmaceutical customers, and we are bullish on this aspect of the story.
A Undervalued Growth Story?
Physician prescribed pharmaceutical drug products that contain cannabis are being used to treat an increasing number of indications around the world and this number is expected to continue to grow with additional new drugs and abbreviated new drug applications. According to Grandview Research, predicts this segment of the pharmaceutical industry to be a $5.8 billion market by 2027.
When paired with the Cannabis Drug license that was granted to MediPharm earlier this year, the DEL will allow for the commercial distribution of drugs that contain cannabis. With many global pharmaceutical trials underway in which cannabis is an active ingredient, many drug producers will need a manufacturing partner. MediPharm is strategically positioned to provide that service to all global pharma partners.
The granting of the license further differentiates MediPharm from other Canadian cannabis manufacturers and we are bullish on the growth prospects that are associated with it. At current levels, we find the valuation to be compelling and the risk-reward profile to be favorable.
We believe that MediPharm is executing on a multi-national and multi-faceted growth strategy and are bullish on how the story has advanced so far this year. If you are interested in learning more about MediPharm, please send an email to firstname.lastname@example.org with the subject “MediPharm” to be added to our distribution list.
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