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29.0¢ argent biopharma limited

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gutumike

1,217 Posts.

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06/06/18

13:44

Post #: 33531838
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Originally posted by Reillyblue ↑

The ongoing whinging and whining on these forums is getting tired. It would be great if you write on these forums to contribute something, you know research. So as not to be a hypocrite

Strengths
1. Mabsult revenue - next quarter 3 x $87, 000 = $261, 000
2. Sales of Derma Products - slow but present - partnership with Cult beauty may grow $81 000
3. Money set aside for production of goods for the quarter jumped .5 million dollars
4. $12 million cash in bank
5. GMP interim already awarded
6. HL Pharma - Australian Distribution License
7. Lenis - 5 year deal
8. Botanic - already harvesting
Malta Facility- 4000 m2, 1.5 tonne biomass, 3 crops a year. That costs about 1.8 million to produce and currently on the German market would sell for 5.2 million. profit 3.5 million Euro
Panax (Czech Facility) - producing 400 kg of high grade MM - profit 920 000 Euro
Slovenia - 5000 m2 - producing hemp - figures are not as good as open field and lower quality used for nutraceuticals

Weakness
1 1.2 billion share on offer
2. Aust Licenses application taking a long time
3. Varm Cosmo Deal - length of time it is taking makes investors nervous, lack of trust
4. California Deal - lack of understanding of what happened leads to magnification of previous point. The California deal was signed when political climate in USA seemed certain and as such the progress of MM was foreseeable. With Trumps election and Sessions appointment this went out the window. Management made a prudent decision(based on legal advice) to not to proceed given the uncertainty.

Opportunities
1. European markets - huge potential - 200 million people already have access to legalised MM
- 800 million people population in Europe
- European market is difficult to access due to complex legislation both from the European Union and individual country stand point. This barrier to market works in our favour as it reduces competition.
- we have 3 sites already
2. Cannepil Sales - Once GMP awarded (which we have no control over that timeline) then hopefully Q4 2018 sales begin. Potential 1 m revenue + a year
3. Nutraceuticals - High volume potential growth
4. Sale of Derma - rumour that Canadian firms are circling
5. RMIT collaboration - the focus is on Melanoma Treatment - Potential is great
6. GMP - Development of further medications
7. North American Deal - hinted in Finfeed interview
8. Australian facility - hinted in the Finfeed interview

Threats
1. Legislation changes as what happened in the USA
2. Competition - although somewhat mitigated by being in Europe
3. Failure of corporate deals such as Varm etc
4. Cash burn

Timeline Catalysts

Q2/3 Varm Cosmo - one way or another - interestingly I keep checking the cavalabs korea Instagram page and there is a fair bit of activity. Remember when it was first announced how much criticism was directed at the company (VC). They are a fake, they are not real etc. It would seem this has been put to bed.
Q2 Nutraceuticals Full Launch
H2 2018 - Malta Construction
Q4 2018 - Cannepil Sales
2018 - Product launch in UK and North America
Anytime - Australian License, N. American Deal,

Share Price
The share price has dropped, IMO, because a combination of factors mostly due to psychology of investors but somewhat contributed by Varm Cosmo deal.
Investors are impatient, they want this company to skyrocket. It has threatened a couple of times to multi-bag but pulled back. Guess what? that is what shares do. Investors take profits. The market is irrational; as the SP drops people get negative and it becomes a self-fulfilling prophecy. Until such time as an announcement changes sentiment. The story hasn't changed, in fact it has gotten better. Look at the Malta deal and potential sales from biomass alone.
End of year - as the patience of investors wears thin, the end of year fast approaches. People decide to take the tax loss sending share price down. And on their way out bag out the company on forums!!!
Varm Cosmo is certainly causing angst and cannot be dismissed. However the delay is just that at the moment. It is a delay. There is lots of criticisms of the company of missing timelines and deals falling through but in actual fact they have had far more hits than misses. Not many deals totally fall through. The Californian one is an example but it was the company's decision. The Varm Cosmo one is still in the works. Remember this should it fall through then mxc would have legal recourse.

MXC
If you invest in this company or any MM company make sure you understand what you are investing in. MXC is a very different company to the others on the market. MXC is a pharma business. It is focussed on high quality MM products that have high gross margins and high profits. Other businesses that are focussed on hemp products/food products are not even worth comparing to MXC. That is not a negative, it is just that they are a different market place. They produce large amounts of biomass which is low quality for goods that have low profit margin. They want to move large volumes of product. It is an easier process to do this and as such they have more competition especially in market places such as North America or Australia.
It is important to remember that cannabis is not one simple species. It has different strains with different genetics. One companies products are not necessarily the same and do not have the same potency or effects on diseases. In order to ensure you have the best genetics, you need the research and the best place to research is universities. The RMIT deal is the sleeper for MXC especially now it seems the focus is melanoma. Other companies who focus on mass produced plants won't have the same IP that MXC will have.
MXC management has shown that they are able to negotiate deals with companies, universities and government. They have been able to create a European manufacturing base. The company has a clear path forward and a clear path to profit. The issue is that it will take time as anything high quality does. This is why the company is an attractive investment proposition. For those who have strong hands, patience and are forward thinking.

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Thanks for putting so much time, effort, knowledge and intellect into your post, which is one of the best on HC that I can recall.

Cheers,
Mike

MXC Price at posting: 6.6¢ Sentiment: Hold Disclosure: Held
13 Upvote

0 Great analysis

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