BPH confirms intention to enter medical cannabis sector

Published at Oct 25, 2018, in ASX Biotechs

Diversified investment group BPH Energy Ltd (ASX:BPH) has advised of its intention to pursue a complementary strategy of making investments in the medical cannabis sector.

This announcement comes on the back of an ASX query which sought an explanation for the change in the price of the company’s shares from a closing price of $0.001 on Thursday, October 18 to an intra-day high at the time of writing of $0.003 on Friday.

The regulator also noted the significant increase in trading volumes with an all-time record 56 million shares traded.

While the company was in the process of resolving the terms of a rights issue and, separately, an internal proposal to consider investing into the medical cannabis sector, neither of which had been finalised or approved by the Board, management didn’t feel that confidentiality had been lost regarding these proposed initiatives.

BPH to recommence trading on Thursday

However, with the terms of the rights issue now settled and confirmation of its intention to invest in the medical cannabis sector in the public domain, BPH has recommenced trading on Thursday.

Management is buoyed by the significant growth occurring in the medical cannabis sector, as well as positive regulatory developments within the industry, including the move to legalise cannabis in Canada and the announcement by the British government to legalise medical cannabis from November 2018.

Of course, this follows the decision by the Australian Federal Government to legalise the export of medical cannabis from Australia in January this year.

Consequently, management’s intention is to inject most of the funds raised from the $1.18 million rights issue into a cannabis industry related investment.

Opportunity to increase stake in Cortical Dynamics

Looking across the company’s other investments, Cortical Dynamics Ltd is in the process of undertaking a pre-IPO capital raising of up to $2 million at a price of 10 cents per share.

BPH has a 4.47% interest in Cortical Dynamics, as well as a right to convert debt and increase its shareholding in the group which could take its stake to approximately 15.7%.

Cortical Dynamics is working with the Swinburne University of Technology to develop and commercialise a unique depth of anaesthesia monitoring system for use during major surgery.

The core technology is based on real time analysis of the patient’s electroencephalograph (“EEG”) using a proprietary algorithm based on a mathematically and physiologically detailed understanding of the brain’s rhythmic electrical activity.

TGA and CE Mark certification

Cortical recently received notification from the Therapeutic Goods Administration (TGA) that a decision was made to issue a conformity assessment certificate to the company.

In addition to this, Cortical also received notification that it would be issued MRA EC certificates (CE Mark) under the Mutual Recognition Agreement (MRA) with the European Union, allowing the CE Mark to be applied to the BAR monitor.

Having achieved TGA certification and the CE Mark, Cortical is now able to market the BAR monitor within Australia and Europe.

With positive developments on a number of fronts investors will be keen to see if the recent share price momentum can be sustained.

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