There’s never a bad time to be in charge of a company putting together big capital market deals, at least compared to digging ditches for a living. But the crew at Hamza Thindal Capital Corp. are eating their fair share of steak these days, and must surely be considering tattooing the word “biotech” on their chests.
The company has put together several rounds of financing for medical marijuana struggler T-Bird Pharma (
TSX:V.TPI,
Stock Forum) which, for many months, looked like the runt of the MMPR litter. But an announcement after market close Wednesday that the founders of the company had sold just under a controlling interest in the firm to US-based Medna Bio Sciences for $4m in escrowed stock set investors into a buying panic at the open today, launching the company up 46% today, or 69% up from the 52 week low the stock had languished at just a week ago.
The deal brings experienced biotech/pharma operators into the business, as well as access to new financing should it be needed, and new product pipelines – without stock dilution. Retail investors appeared confused by the news initially, but institutional buyers are charging in, grabbing value while they can.
But the Hamza Thindal crowd aren’t popping champagne corks just yet – they’re also busy stickhandling VANC Pharmaceuticals (
TSX:V.NPH,
Stock Forum), which has more than tripled in the last month on the back of news it has had a list of Low Cost Alternative (LCA) products approved by the BC Ministry of Health, and that it signed a supplier LOI with a pharma chain.
The Hamza Thindal crew are starting to resemble the go-to crowd for financing pharma deals, and that recent history goes back to 2013, when the company partnered with other investors and rolled out Theralase (
TSX:V.TLT,
Stock Forum), which just raised $8m as it takes cancer therapies to market. Going back even further these guys funded a Quebec City based vaccine company called Medicago in 2007-2008 for $4.6MM at a $10 million market cap...fast forward 5 years and the Company sold to Mitisubishi’s pharma arm (Mitsubishi Tanabe Pharma Corp.) for $357 million in July of 2013.
More recently, delving less into the ‘bio’ side of things and more into straight tech, the company fueled a resurgence at SoMedia (
TSX:V.VID,
Stock Forum), which has been called the ‘Uber of video production’, and just signed a deal with Maaco Franchising to deliver video production to 460 franchises of that chain across North America.
That news popped V.VID stock from $0.12 in late February to $0.31 today, a 158% increase – something all the more notable on a stock that had languished for nearly a year around its 52-week low.
When I asked Kam Thindal, Managing Partner of Hamza Thindal, about the biotech pop, and what’s fueling the VANC breakout, he said he thinks this is just the beginning of the biotech charge.
“We’ve been involved in the VANC deal for two years as the lead investor,” he said Thursday, adding, “We’ve led every round in that time, from way back at the $0.10 rounds.”
That decision, as of now, appears to have been a smart one, though Thindal admits there’s still risk inherent.
“When we entered VANC, we saw three key pieces of risk. 1) Can they get they in-license an attractive generic pharmaceuticals portfolio in a capital efficient manner? Well, they definitely did that. 2) Once they get those licenses, can we register those products for distribution in Canada, with Health Canada approval?”
Achieving Health Canada’s okay on a company or product can be expensive and slow, as anyone in the medical marijuana industry can certainly attest to. But VANC got that done for a laundry list of generic drugs in very reasonable time, without blowing out its capital. T-Bird, likewise, navigated its way to a Health Canada-approved MMPR license, something only 20 companies have achieved out of 1300+ applications.
“The third question for VANC has been, if we get the licenses and register the drugs, can you sell it profitably and repeatedly? That’s the last overhanging question, but a few weeks back, VANC signed an LOI to be a preferred supplier with a pharma chain.”
Investors had questions about that LOI, such as why sign an LOI to distribute and not just place a purchase order?
“The company can’t take a PO until they have inventory ready to ship,” says Thindal. “They’ll have that in Q2 and expect first revenues also in Q2.”
Asked why VANC, and why right now, Thindal has an easy answer.
“You’re getting exposed to the sector without the inherent risks of drug development, namely: the capital and time intensive preclinical and clinical trials. You can be left waiting a long time for returns in this space, but without the drug development timeline Vanc offers a potentially accelerated return.”
--Chris Parry
https://www.twitter.com/chrisparry
FULL DISCLOSURE: T-Bird Pharma is a Stockhouse marketing client