Zelda Therapeutics Share Price Down 10%

Despite their consistent rise in share value last year, Zelda Therapeutics [ASX:ZLD] sunk by 10% for the day, at the time of writing.

The small-cap healthcare company has seen some success due to the rising demand for medical cannabis. However, this has not prevented them going through a small percentage drop recently.

Sitting on a market cap of $101.87 million and an enterprise value of $94.04 million, Zelda Therapeutics have been behind on their overall management effectiveness.

Their return on assets has decreased by 34.75% and return on equity is down 160.551%.

Operating cash flow is down by $1.6 million and levered free cash flow is also down by $1.24 million.

What caused the drop to occur?

Zelda Therapeutics have not been growing much lately as their earnings have lacked over the past year.

This has caused the bio-pharmacy company to fall behind in their overall growth.

The medical cannabis industry has seen positive results in recent times, however, investors see the industry as a risky asset.

Despite the doubt amongst investors, their shares have been performing well. This 10% drop is out of the norm in comparison to their usual stock rates.

Zelda have been focusing on extensive forms of research, such as cannabis extracts on pancreatic and brain cancer cell lines.

What Is Zelda’s business approach?

Zelda Therapeutics have been focusing their medical research into effects that counter insomnia.

Last November their shares bounced 13% higher as the company were approved for Australia’s first medical cannabis trial for insomnia.

Zelda’s executive chairman Harry Karelis states,

We are very pleased to have partnered with the leading researchers in this field at the prestigious UWA Centre for Sleep Science, and are confident this clinical trial will deliver the high-quality data we need to further develop and commercialise our medicinal cannabis formulation.

They have recently received a full regulatory approval for its medicinal cannabis clinical trial, which will commence in Q1 2018.

This clinical trial will soon commence, once it receives regulatory approval from the Human Research Ethics Committee to investigate the effects of medicinal cannabis as a counter to insomnia.

Zelda Therapeutics will commence human clinical trials this year on other disorders, including insomnia and autism.


Ryan Clarkson-Ledward
For, Money Morning

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