a nice report:
http://www.nextbiotech.com.au/fda-approval-mxc-sales-doors-open-us-euro-canadian-markets/?utm_medium=email&utm_campaign=MX3-UA3&utm_content=MX3-UA3 CID_8388aa8207da7744fd77edd07bed46d4&utm_source=edm&utm_term=Read Our Full Article
FDA Approval for MXC: Sales Doors Open in US, Euro and Canadian Markets
When the US Food and Drug Administration (FDA) gives companies its seal of approval, it usually signals the start of a fully endorsed, regulatory-approved push into large commercial markets.
No matter what industry a company operates in, FDA product approval is a big milestone.
So with FDA approval now under its belt for its cannabidiol (CBD)-based cosmetic products, MGC Pharmaceuticals (ASX:MXC) is firming as one of the more promising companies in the so-called ‘potstock’ industry.
FDA approval gives MXC licence to sell and distribute its line of MGC derma anti-ageing cosmetics throughout all states of the US.
And the sales of MXC products has already begun, with the company recently confirming details of its first distribution agreement with a company in California.
This officially signals MXC’s entry into the largest consumer market in the world, something which could very well see a step-change in its underlying business.
FDA approval isn’t the only North American milestone MXC has reached lately.
Health Canada has also just given MXC approval for its Derma Anti-Aging line, opening up the Canadian cosmetics market which in 2015 was estimated to be worth US$1.9BN.
Whilst generally the market values US FDA approval much more than Heath Canada, it should be noted that actually the Canadian regulation body is much more strict, so it’s a big achievement for MXC in this regard.
MXC also received similar news in Europe, where the European Commission’s Cosmetic Products Notification Portal (CPNP), granted the company permission to sell and distribute its cosmetics range throughout the European Union.
So MXC not only has the opportunity to corner the US cosmetics market expected to be worth $11 billion in revenue in 2016 alone, it also has Europe and Canada on the hook.
Remember, however, that this is still an early stage play and investment caution is advised if considering this stock.
These approvals have freed MXC up to actively pursue strategic distribution arrangements throughout Europe as well.
That’s on top of its ability to sell its products online after launching its
online medical cannabis store in April.
The best thing though about the distribution deal and its online businesses, is that it relates only to MXC’s underlying business – cosmetics.
MXC’s higher-order work being conducted in Israel in the pharmaceutical space is designed to help alleviate the suffering of those dealing with epilepsy and could make the company something special in the long run.
If you’re reading this, you’re probably vaguely aware of the sort of deals which can be done in the pharmaceutical space.
Medical breakthroughs are made and then deals upwards of
$100 million are negotiated as big pharma moves in.
There’s no guarantee such an offer will eventuate for MXC, but you can see the direction its heading.
MXC is starting off by building revenue in lower margin cosmetic products, and will be aiming to produce much more sophisticated medical grade products over the coming years, translating to higher margins for the company.
But for now, the foreground focus is very much on generating cash flows via its cosmetics range.
In this article, we’ll take you through the MXC game plan and why its recent moves are so significant.
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