MGC Pharmaceuticals to accelerate growth listing on the U.S. OTC ventures market
Special Report: MGC Pharmaceuticals, an Australian biopharma company that produces cannabis-based treatments for epilepsy and dementia, is poised for rapid growth in the United States as its shares began trading on the OTCQB venture market
MGC Pharmaceuticals (ASX: MXC) began trading on the OTC venture market, which the company said will help accelerate international growth.
Its December 18 debut on the OTCQB under the ticker code MGCLF marks a “milestone” moment in the biopharma company’s history, less than a month after it partnered with two universities to launch a research hub into cannabis-based medical treatments.
“Trading on the OTC market is a landmark achievement for the company,” co-founder and managing director Roby Zomer said, “as it supports our growth strategy of generating increased exposure across international markets.”
The OTCQB is a mid-tier off-exchange market in the US, providing around 10,000 early-stage and developing companies with greater credibility and exposure to institutionalised investors.
OTC trading to access international investors
Zomer said MGC, which will continue trading on the ASX, is looking to grow the business beyond its Australian shareholder base.
“We are focused on growing the business and providing better access for investors internationally.”
MGC is headquartered in Australia and supplies finished medicines across Australia and Europe. The company’s cannabis growing operations are based in Slovenia and the Czech Republic, with approval to build a medical cannabis production and cultivation facility in Malta.
In October, investment research firm Edison Investment Research said the company was vastly undervalued at its current share price. It put a target price of 11 cents per share, valuing the company at $140 million.
MGC shares are currently trading at 3.8 cents a share, giving it a market cap of $46 million.
Rapid growth ahead in the Australian medicinal marijuana market
Edison’s investment view is based on MGC’s flower and resin sales, which it said accounts for roughly 60 per cent of the company’s value, while its pharmaceutical business makes up the rest.
But MGC’s pharmaceutical business had a breakthrough in October when it was approved by the Therapeutic Goods Administration to be prescribed by specialist prescribers in Australia. This followed a decision by the Human Research Ethics Committee at St Vincent’s Hospital in Melbourne to allow the use of CannEpil in adult patients.
Those two decisions alone are expected to generate $1 million in annualised revenues from a starting base of under 100 patients.
If given wider prescribing authority, CannEpil could potentially help treat the estimated 84,000 Australians who experience drug-resistant epilepsy symptoms.