Why Impression Health’s Share Price Jumped 66.67% Today

At the time of writing, shares of Impression Health Ltd [ASX:IHL] are up by 66.67%, to 2.5 cents per share. The share price rocketed to hit 3.7 cents per share earlier today.

Why did Impression Health Ltd shares do this?

Impression Health announced that it commenced the application process to obtain licences from the State Department of Health, Victoria and the Federal Office of Drug Control for the importation, storage, distribution and export of medicinal cannabis products. Put simply, the company is applying for an import-export license for its partner’s cannabis biotechnology products:

AXIM biotech clinical development pipeline

Source: Impression Health

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What now for Impression Health Ltd?

The market is going hot for biotech and pot stocks both at the moment. So the timing of the announcement was perfect for the company.

I believe there’s plenty of room left to run for the share price, however…

Impression Health believes it should have its import-export license granted ― at the earliest ― by January, 2019. That would put it ahead of many rivals. Botanix Phrama [ASX:BOT] is manufacturing a similar cannabinoid product to IHL’s, targeting psoriasis and dermatitis. Both companies are at the stage two trial process, although there are two main differences:

  1. IHL’s partner ― US$80 million-capped AXIM Biotechnologies [NYSEOTCQB:AXIM] ― is paying for the research and development. IHL is merely a distributor of its products, within (initially) the Australia-New Zealand market. Put differently, the company avoids the hefty research and development costs.
  2. Botanix Phrama has a market capitalisation of $65 million ― roughly 13 times IHL’s.

The bottom line? If Impression Health obtains its regulatory approval early next year, the share price could skyrocket. At a price of 2 cents per share, the company’s enterprise valuation (market cap less cash) is worth roughly $4.3 million. Not bad for a healthcare and biotech stock with untapped share price potential in a hot market!

Jason Stevenson,
For Money Morning

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