The real reason for XPhyto’s (XPHY.C) freaky gravity-defying chart

04/21/2020

XPhyto Therapeutics (XPHY.C) is a cannabis company that does not grow commercial cannabis.

Nor does it sell vape pens, THC gummy bears or topical creams.

It also has refrained from buying dispensaries in Nebraska.

XPhyto is a cannabis science company helmed by a CEO – Hugh Rogers – who has bluntly declared that the industry is plagued by “immature science”.

According to its own corporate literature, XPhyto is a cannabis 2.0 company “focused on formulation, clinical validation, and European imports, distribution and sales”.

XPHY owns a German narcotic manufacturer called Vektor Pharma, another subsidiary called Bunker that has all the licenses to study cannabis as a medicine, and it has formed multiple partnerships with universities and research centers.

The collective wisdom of “the markets” suggest that Xphyto is onto something.

Do not adjust your monitor.

This chart is not upside down.

On April 20, 2020 Xphyto announced that it has signed a deal with 3a-Diagnostics “for the development and commercialization of real-time, low-cost and easy-to-use oral dissolvable thin film (ODF) screening tests for the rapid detection of infectious diseases.”

3a is a German research-based biotech that specializes in point-of-care test systems.  The company has a utilitarian philosophy to medical care. No $250,000 ventilators or expensive designer drugs for them.

3a philosophy:

A1: “anywhere” (no power or additional equipment required)
A2: “anytime” (decentralized and rapidly deployable)
A3: “anyone” (no specialized training required)

The current U.S. fumbling of the corona virus pandemic is a stark reminder that capitalism – despite its strengths – does not always deliver fair outcomes.  Black Americans are dying from COVID-19 at triple the rate of whites. The lack of masks is explained by Farhad Manjoo in “How the World’s Richest Country Ran Out of a 75-Cent Face Mask”.

For investors who believe that access-to-healthcare is a basic right – the 3a approach is a breath of fresh air. “Profit without principle is short lived,” declares 3a, “hence we comply with a strong ethical culture.”

“Our partnership with XPhyto has the potential to add significant value to 3a’s existing product portfolio,” stated Dr. Heinrich Jehle, Managing Director of 3a, “by addressing a critical near-term need, COVID-19, and prepare 3a for the next pandemic threat through platform enhancement.”

The 3a deal involves the development and commercialization of 3a’s existing product pipeline including XPhyto’s ODF platform to administer 3a’s biosensors, the development of a high-throughput biosensor screening platform for rapid identification of new biosensor targets; and the development of a dissolvable oral thin film COVID-19 screening test.

XPhyto will retain an exclusive global license for commercialization of all new products developed by 3a or using their development platforms and a non-exclusive global license for the current Products in development.

“3a owns a proprietary biosensor platform with multiple products in development and XPhyto’s wholly owned subsidiary, Vektor, specializes in research, development and manufacture of oral dissolvable thin film medical products,” stated Rogers, “By working together, we create the opportunity to quickly develop critical new products.”

Subject to Platform 2.0 activities and COVID-19 evaluation milestones being hit, XPhyto will fund 3a’s R&D up to CAD $1.65 million over an eleven-month period, and also commit CAD $385,000 to 3a’s biosensor Products to Vektor’s ODF platform, over five months.

XPhyto will issue 50,000 shares to 3a immediately and 200,000 more shares upon achieving certain COVID-19 development milestones. An additional 250,000 shares will be issued to 3a upon achieving CAD $38 million in gross sales within 24 months. 3a will retain a 5% royalty on net sales of all products sold by XPhyto.

XPhyto’s business engine has a lot of cylinders.

Check out the news flow, and you’ll see that the engine is gaining horsepower.

The CEO Hugh Rogers gives a crystal-clear overview in this excellent Proactive Investors interview.

XPhyto has a collaboration with University of Alberta’s Faculty of Pharmacy & Pharmaceutical Sciences.

Two exclusive 5-year engagements provide certified extraction, isolation, and formulation facilities, drug research and development expertise, as well as commercial analytical testing capability. The XPhyto team is initially focused on formulation of sleep, pain management and dermatological applications as well as novel drug delivery methods.

“We’ve sat with XPHY’s team several times over the past year and on each occasion have been impressed with their plans,” stated Equity Guru’s Chris Parry on February 3, 2020, “but perhaps the greatest plan they’ve executed has been achieved over the past month, when their share price has elevated from $1.00 to $1.85.  Three months ago, you could have had them for $0.73.

Since that article was published, XPHY’s stock has almost doubled again.

Why does XPhyto have such a freaky gravity-defying chart?

“XPHY hasn’t had a game-changing news drop,” explains Parry, “Rather, they’ve done it with…the work”.

Lukas Kane

Full Disclosure:  Equity Guru has no commercial relationship with XPHY.

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