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Back when Vanc Pharmaceuticals (NPH.V) rolled out last year, a decent marketing push was resisted in many quarters by retail investors who just didn’t believe the business model.

Here’s a local company that has announced it will be looking to get generic versions approved of products ranging from Viagra to Celexa, Valtrex to Prozac, Zoloft to Femara to Micardis to Zoming to Topamax to Glucophage – in total, 38 formulations at last count, with 87 dosage forms and more to come. That’s a lot of stuff.

Two have been approved thus far – Cortivera, a treatment for minor skin irritations such as eczema, and Hema-fer, which is a high dosage iron supplement.

Those two, which obviously will take some time to properly sell through every province, have already run gross revenues from $111k in Q3 of last year, to 449k in Q4, to a whopping $929k in Q1 of 2016, according to a set of financials that would up slipped into SEDAR without much fanfare.

Vanc is running at a loss – $708k in Q1, which was slightly up from Q4 – but that’s to be expected when the company is developing products quickly, getting through Health Canada approvals, and activating a multi-province sales force that is still in its early stages. The company says, with $225k in activated warrants last quarter, it has $1.6m in cash and cash equivalents left, which gets them through two more quarters even if sales don’t continue to rise as they have.

They think there’s a few more quarters they could squeeze out of that.

As at March 31, 2016 the Company had working capital of $3,239,224 (December 31, 2015: $3,207,630). We believe that our cash on hand, the expected future cash inflows from the sale of our products, net proceeds from the warrants exercised, if any, will be sufficient to finance our working capital, operational needs for at least the next 12 months. If our existing cash resources together with the cash we generate from the sales of our products are insufficient to fund our working capital, operational needs, we may need to sell additional equity or debt securities or seek additional financing through other arrangements.

Fair enough.

Generic drugs will never have the unmitigated potential for upside that a new discovery will have, but they also don’t have the same potential for unexpected doom if an FDA trial goes wrong, not the five year timeline between beginning testing and (hopefully) approval.

Vanc just quietly churn out product and let the big boys do the testing and risk-taking and marketing. Dolla’ dolla’ bills, yo.

At $0.52 (I’d expect that to go higher after tomorrow’s open), the company is closing in on its 52-week high, which it achieved back in the midst of a hard promotion campaign which saw a lot of early guys make money selling paper when the company really needed strong hands to stay strong.

Credit to the CEO, he’s got the company back where it was in the glory days based strictly on getting business done.

I’m not a holder, nor are they a client, but I like it when a plan comes together. Respect to Vanc.

Now get to work on that $5 generic Viagra…

–Chris Parry

http://www.twitter.com/chrisparry

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

Chris Parry

Chris Parry is a two-time Webster Award winning journalist who has been featured in the pages of The Vancouver Sun, The Province, National Post, Spin, Hollywood Reporter, FHM, Stuff, and Stockhouse. He was the first business journalist to identify and focus on the move to marijuana as an investment opportunity, and started Equity.Guru as a venue for honest, no punches pulled coverage of the North American public markets.

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