Nemus vs InMed IMO
I thought this was a good question and I have decided to give a response. Thank you to TrueTrades for highlighting my posts, but much more knowledgeable people on this board than me (my good friend Vinpat)
Disclosure: I bought IN.C between .20c – .40c CAD and sold between .70c-.80c CAD. I do not currently have a position in InMed.
I do have a position in $NMUS as of the time of this post.
$IMLFF has a market cap of 55m USD fully diluted (135m shares) v. $NMUS market cap of 30m fully diluted (105m shares).
IMLFF has roughly 2m USD cash v. NMUS with 20m USD cash
Neither have substantial liabilities.
If you look at Enterprise Value (MC+debt-cash) IMLFF has an EV of 53m v. NMUS 10m
So in terms of how the market is currently valuing these two companies, InMed is worth 1.5x-4x is worth more or is / that much more expensive to buy.
InMed $IMLFF $IN.C
I originally discovered InMed through their CEO Eric Adams interview on BNN (late 2016 early 2017). Clearly, the three things driving their value in the market is their ability to produce cannabinoids, cost-saving identification process of potential indications and their drug candidates.
I used to believe their bio-synthesis production (just like how insulin is produced by Eli Lilly) was going to be a disruptive technology in this space, once tier one players were ready to commercialize their drugs. Martin Bott, a Eli Lilly finance guy, being added to the board increased speculation around this. You can ask Vinpat, but I don’t think they have a patent on the way they produce cannabinoids. In addition, they have competition in this space. Teewinot is a private company with bio-synthesis cannabinoid tech and there are others.
Dr. Sazzad’s proprietary algorithms (bioinformatics) software is apparently another disruptive technology for the sector. Dr. Abu, who the poster mentioned worked at GWPH for a year or two, claimed in the Forbes article it is like nothing he has ever seen. I asked Nick Brusatore on Twitter about it; Brusatore, along with Dr. Hyder Khoja, started InMed. He said he had no idea if it was as special as they are now claiming it to be. I have a feeling other players have similar technology, but don’t bother including it as a ‘value driver’ of the company; to busy developing their drugs. As of now, I only know of RVV asking to license it out. I also think they deal fell apart (the term sheet has long expired without a word).
So, as far as bio-informatics and bio-synthesis, I came to realize I shouldn’t be placing much value on them as I originally had. And besides, we are talking about DRUG DEVELOPMENT. That is the most important thing here IMO. So what does InMed have in their pipeline?
Their lead candidate INM750 for EB is pre-clinical and there is no public data about its efficacy. Now, with what we know about cannabinoids, I do believe it will help EB patients. Cannabinoids have been known to have anti-bacterial properties. NMUS has a MRSA candidate, and even though KALYT is a shit show, they have another candidate related to a skin disease which looks promising. Their researching this with UBC and a university in Hungary (although that might be do with glaucoma).
As far as INM085, their glaucoma target, I think they are WAY behind NMUS in terms of the development process. If cannabinoids help glaucoma in a meaningful way, I don’t think IMLFF will be the ones to capitalize. You can also see they seem to more interested in pain/inflammation targets more than glaucoma judging by their last Investor Presentation. This wasn’t the case 6 months ago. And again, I have NO idea how well they have protected their intellectual property. This company was on life support just 18-24 months ago. Vinpat would know more about patents than me.
While I have voiced some of my concerns above, I could EASILY live with them and had continue to hold IMLFF. I am Canadian and patriotic; InMed is still the best cannabinoid drug development play in Canada. However, what began to concern me most is the PEOPLE involved. I bet Jockeys not Horses. So who are the jockeys at InMed?
Ostensibly, you have Eric Adams, Ado Muhammed, Sazzad Hossain and Paul Anderson as the faces of the company. Eric Adams, a successful track record and friendly gentleman. However, the more you dig the murky the waters get. Sazzad was successful developing/commercializing a drug with a +250m global market I believe and has been published many times in peer reviewed journals. He also has a relationship with the national research council in Canada. All good things; however, he has lent out his name before to other cannabis companies such as Affinor Growers. What did he share with $AFI?
Ado Muhhamed, yes, he worked at GWPH for a while. Can anyone tell me what he did there? Has anyone asked GW what tasks were involved in his role with the company? I don’t like how often InMed mention that he worked at GWPH in their press releases, while never discussing what he did.
Again, these discoveries weren’t THAT earth shattering and weren’t why I sold my position. There are some unanswered questions, but nothing dire. What ultimately lead me to sell was the behavior Chris Bogart and Craig Schneider, who happen to be the largest shareholders in $IMLFF:
Shareholders
Name Equities %
Christopher Bogart
7,774,572 14.7%
Craig D. Schneider
5,459,680 10.3%
Sazzad Hossain, PhD
3,000,000 5.67%
William J. Garner, MD
1,357,143 2.57%
Eric A. Adams
808,000 1.53%
Andrew Hull
625,000 1.18%
Adam D. Cutler
312,500 0.59%
James Maitland Macintosh
250,000 0.47%
Terese J. Gieselman
189,903 0.36%
Martin Bott
100,000 0.19%
People can go research these two gentleman and make up their own minds.
I’m tired of people shooting the messenger.
Schneider is now off of the board completely, but he is still the second largest shareholder and used to be the CEO. There is an interview with him somewhere on the Cannabis news network.
I noticed a user on Stockhouse who seemed to have an inside track of the company and was speaking with Schneider. He would says things like….
‘talked to Schneider after him leaving the board, he is not going anywhere just making room for the big players’
So I DM’d him to ask him more: Hey, what’s with the volatility in the SP?
‘Well, who do you think has been working it so hard?’ ?WORKING THE STOCK PRICE???WTF?
And then I get a message a few months ago from the same guy
‘Go buy SGH, going to be a 10 bagger!’
I look it up SGH.V...it’s a graphite company…I reply, why do I want to own a graphite company?
‘it won’t be a graphite company for long, look who owns it!’….(chris bogart)
So I reply, well…what’s it going to be?
‘sole supplier of cannabis for IMLFF and LP in Quebec’
I go ask a popular ‘Pot stock’ twitter account about SGH. He replies, ‘well, I don’t know anything but I participate in the private placement (0.05c/share) in January. YUCK! Dirty way to make a living.
Back in February, SGH stock price was trading between .06c to .08c CAD if it traded at all. It is now trading between .15c – .17c CAD with no PR or notice about a fundamental change. I don’t like this AT ALL. Scuzzy people float shells; very low energy stuff. What else are insiders telling their buddies and favorite investors?
Then it comes out they paid $25,000 and a few thousand shares for a pump, while their SP was already going off the charts. Wolf of Weed started tweeting about them on almost daily basis. All the same stuff over and over again: bio-synthesis, bioinformatics and their candidates. Too many red flags, too much shadiness and I don’t like the two largest shareholders. Their obviously successful people (I think Bogarts gold company Corex was bought by up by a bigger Gold company) but I REALLY don’t like how they operate. Eric Adams seems like a good guy, but he only has so much control. Bogart and Schneider own 25% of the company. Until their involvement has been significantly decreased, I’m not holding.
$NMUS
During my time on the IMLFF boards, I found this guy Vinpat. He had an edge to him and I like that. He also wasn’t buying the IMLFF pump; at first, I thought he was a hater. Then I realized he is just a smart guy who asks questions. He was talking about why NMUS is a better play in what I would call the ‘junior cannabinoid drug development’ sector. So I dug in about NMUS and a bunch others after I exited IMLFF. I went over $TRPX $OWCP $CNBX and $VBIO. I also considered $GWPH $ZYNE $CARA but am a young guy and am seeking ALPHA.
While I believe NMUS might have the best IP in the business, their market cap is dwarfed by the tier one players $GWPH $ZYNE and $CARA (I don’t count $INSY since there drugs kill people). The choice became quite clear as to what I wanted to hold as these companies begin trials and eventually commercialization of cannabinoid derived drugs. That is, if you believe there are drugs that could exist with efficacy that can be derived from cannabinoids.
First, and most important, it is the PEOPLE involved in NMUS as to why I sleep well at night holding. Now, chico might say something like ‘you never hold or get long on the OTC!’. I don’t day trade, I don’t flip or get short. I am long two names in two different sectors, that kind of concentration and my position size might make some of you vomit. I get that is risky, but it is the way I do business. But I am confident because of the PEOPLE. So, what people?
Brian Murphy used to be the CSO at $VRX before the Michael Pearson and Bill Ackman came in and destroyed the company. He has an impressive academic background and has been successful everywhere he goes. I tend to believe people don’t change (if you messed up back while running company A, you will probably drive company B into the ground too).
Mahmoud Elsohly has been researching cannabinoids since the 1970’s; I would encourage people to watch his lecture at the Justice Summit V (it is available on youtube) to understand how knowledgeable he is. He has been researching the possible pharmaceutical applications of this plant for over 40 years at the only school in the USA allowed to do so. It is an incredible competitive advantage to have his brain behind the development of NMUS candidates. He should be considered up there with Dr. Mech when considering the top cannabinoid academics.
I think Donald Abrams will be key in advancing their CINV drug. Not only his expertise with chemo patients, but the resources and connections he has to recruit patient populations for trials given his current positions. Cosmas Lykos, one of the founders, has been successful wherever he goes (Oakley).
And lastly, DOUG INGRAM. Go research him. Basically, he turned around Allergan (500m+ MC) while staving off a hostile take over by VRX. To be able to do that, look that big idiot Pearson in the face and say ‘NO YOU CAN’T BUY ME; and ‘I DON’T LIKE THE WAY YOU DO BUSINESS ASSHOLE’ while VRX market cap is the highest of ANY Canadian company….that takes guts and character.
These are the people involved with NMUS.; principled and track record of success.
NMUS has used different external companies to producer their candidates for pre-clinical research. Albany labs for synthetic, teewinot for bio-synthetic. I don’t know the difference between the two. Ask Vinpat. Regardless, they don’t seem to be concerned with spending time commercializing the production of cannabinoids like IMLFF or anyone else in the space.
As far as the technology involved in identifying potential indications for research, I have more confidence in the 40 years of academic research at U of Miss Pharma department than IMLFF bioinformatics. Time will tell who is right.
In terms of comparing their candidates, NMUS is very far ahead. Murphy has stated CINV could begin Phase 1 trials Q3-4 2017 and be fast tracked through Phase 2 trials because of its similarities to Marinol. Glaucoma (NB1111) has been patented throughout the globe, along with multiple delivery methods. Murphy has stated they believe Phase 1 trials will begin Q1 2018. U of M has published some of their research related to the efficacy of NB1111. Many good discussions have occurred on this board about their studies.
MRSA target NB3111 has some research out there and we already know about cannabinoids anti-infective properties. Vinpat and a few other people can talk about this better than me.
Dr. Abrams has some expertise with CIPN so he will be important with NB51R1. Again, other board members have more knowledge.
While $IMLFF and $NMUS both have large pipelines, I am more confident in NMUS. I think they have done MUCH more academic research into these targets, which goes back to the relationship with U of M being valuable.
Comparing the manipulation of the stock price of $NMUS and $IMLFF, I believe that the retail investor on the OTC is always going to be behind. The market makers are so few and far between; the lack of liquidity makes it very hard to get the best price when buy and selling on the exchange. When carving out my position, I rarely got filled at under the current stock price. I would have to bid between .0025c-.01c above the current price to get my order filled. But that has nothing to do with $NMUS, it just the reality of who is involved. Another example, two days before the Schneider brothers announcement, Cannacord shows up with a 250k bid at .25c…coincidence? Insiders are going to insider I guess. But, that is much different than $IMLFF where you have the big shareholders ‘market making’ themselves.
Important questions when thinking about your positions:
Who has the cash to take their target indications through trials?
Which shareholders are going to be faced with more dilution moving forward?
Who has more legitimate Stock Price catalysts in the next 12-24 months?
Who has a better relationship with the FDA which regulates the biggest drug market?
Which company offers better value in terms of today’s stock price, market cap and EV?
And most important, who has the better people involved in the company?
Individuals can decide for themselves. I will continue to follow the sector and my opinion is subject to change. And yes, I know about $IMLFF announcing a new raise with CannaLOLcord and Roth. Waiting to hear the dollar amount and the SP……
Thanks again to Vinpat, my man!
GLTFA and DYODD
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