What happened to the Impression Healthcare share price?

Earlier in the day, shares of Impression Healthcare Ltd [ASX:IHL] were up by around 30%, to 2.6 cents per share. The share price has dipped a little to trade at 2.2 cents at the time of writing. That said, this could be the start of a massive share price run.

But, Impression Healthcare Looks Set for Bigger Gains…

Why did Impression Healthcare shares jump today?

The company announced the receipt of medicinal cannabis licenses from the Department of Health, Victoria. Impression Healthcare has the necessary approvals in place to import, export, store and distribute its cannabinoid products around Australia, as per the Special Access Scheme and the Authorised Prescriber Scheme. The company has signed specific non-binding agreements to sell Cannabidiol (CBD), Tetrahydrocannabinols (THC) and Dronabinol.

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What now for Impression Healthcare?

It’s unlikely that the share price will stay this cheap for much longer. The market looks like it’s slowly waking up to the story. But, I don’t think it understands that Impression Healthcare can start selling its products around Australia today, as per the Special Access Scheme and the Authorised Prescriber Scheme. Based on my understanding, as per the Special Access Scheme, the company can pretty much sell any product that’s passed phase one tests from an authorised medical body.

Phase one tests define whether a product is safe to administer.

Impression Healthcare’s main product range includes Dronabinol (as per above) and biotech-pot products, which were negotiated exclusively with US$80 million market cap AXIM Biotechnologies [NYSEOTCQB:AXIM] in September:


Impression Healthcare share priceSource: Impression Health

Many of Axim Biotechnologies products are going through phase one testing now. In other words, assuming approval in the near-term, Impression Healthcare could have an extensive cannabinoid biotech product range to sell throughout Australia under the Special Access Scheme and the Authorised Prescriber Scheme.

That said, despite this near-term potential up for grabs, the dronabinol (pure delta-9 Tetrahydrocannabinol (THC)) deal could offer the most share price upside in the months ahead. Impression Healthcare has the rights to sell dronabinol in the US, Canada, Australia and New Zealand. It’s a product that’s gone significantly under the radar and is used to treat:

  • loss of appetite in people with HIV/AIDS,
  • nausea and vomiting caused by chemotherapy, and
  • pain management and sleep apnoea.

Dronabinol was the original cannabinoid medicine permitted for patient use by the Federal Drug Enforcement Administration (FDA) in the United States. It goes under the trade name Marinol®, which is currently marketed by US$140 billion market cap AbbVie Inc [NYSE:ABBV]. AbbVie Inc no longer has exclusive patents for the product.

Medical Jane wrote on its website (my emphasis added):

Prescribed for management of appetite loss associated with weight loss in acquired immune deficiency syndrome (AIDS), and nausea and vomiting associated with cancer chemotherapy in patients who have failed to respond adequately to conventional treatments to relieve nausea and vomiting, Marinol has become a [US]$150+ million market.

Impression Healthcare is entering a US$150 million market, with AbbVie Inc no longer holding an exclusive patent for its marinol (Dronabinol). The company can (if it wishes), given it’s a general product approved by the FDA, sell its dronabinol across the US to anyone and undercut AbbVie Inc. But, with the world being its oyster, Impression Healthcare might target a specific audience (i.e. pain management and sleep apnoea).

The bottom line: The story is gaining traction and there’s lots happening. But the market doesn’t seem to understand the story yet. The company is building a cannabis-related distribution business similar to BOD Australia Ltd [ASX:BDA]. Bod has a market capitalisation of roughly $30 million today, compared to Impression’s of less than $10 million. If we see more deals in the short-term, and the company starts selling products (likely soon), the market cap difference could close quickly.

Regards,

Jason Stevenson,
Resources Analyst, Money Morning

PS: If you’re looking to buy into Australia’s cannabis rush make sure you check out this free guide: Three things you MUST do before investing in pot stocks. Find out here.


Jason Stevenson is Money Morning’s resource analyst. He believes the best way to make money lies in the resources sector. He says, despite the current environment, there’s always a good resources stock trading under the radar. Jason originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Now he brings that expertise to Money Morning, providing readers with his take on the Aussie resource sector, geopolitics and macro events. Whether its oil and gas, gold or lithium, you’re guaranteed an in-depth analysis of the week’s most important topic. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:


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