At time of writing, the share price of MGC Pharmaceuticals Ltd [ASX:MXC] is holding steady at 5.3 cents.
The company spiked in late in 2017, along with other ASX-listed cannabis companies:
MGC Pharmaceuticals announced its 100th patient today, marking an important milestone. We take a quick look at their financials and assess their progress.
MGC Pharmaceuticals laying the foundations for growth
According to today’s announcement, MGC now has 100 patients on the books for its CannEpilTM and MXP100 (100mg/mL cannabidiol) treatments.
They are now also working with Tetra Health, an organisation that helps doctors and patients get access to cannabis products.
Nonetheless, MGC Managing Director Roby Zomer believes this partnership will help the company grow its receipts, saying:
‘We anticipate our number of patients to increase as we broaden our product range available for prescription, and with products in Australia available for immediate supply. Our cannabinoid based pharmaceutical products are of consistent high-quality at an affordable price, and we believe that this is a key differentiator for the Company and will encourage prescriptions.’
MGC Pharmaceuticals most recent quarterly suggests they may need more cash
Having a quick look at the most recent quarterly, it appears MGC may need a capital raise at some point to fund their growth.
They want to break into the European market, and this will take a bit of time and money.
As per their most recent quarterly, they have $2.355 million in cash and cash equivalents but went through $1.6 million in cash for its operating activities.
These numbers are relatively small compared to its $64 million market cap.
They are anticipating growing their receipts, but given these figures, it is conceivable that they may go to investors for an injection of funds.
Compared to the bigger ASX-listed CBD centred business Elixinol Global Ltd [ASX:EXL], MGC is a relative newcomer to the CBD space, having announced material revenues from its non-pharma business units in June.
MGC Pharmaceuticals may have potential, but I’d be cautious of their small revenue at this stage.
For Money Morning