Could This ASX Cannabis Stock Soar Amid the Coronavirus?
As fears surrounding the Coronavirus drive the markets down, one ASX-listed pot stock could triumph amid the COVID-19 crisis.
The Coronavirus, now known as COVID-19, emerged from Wuhan in China last December and has since sent shockwaves throughout the globe. Over 240,000 cases of COVID-19 have been confirmed worldwide, with the the actual number of cases is likely much higher and number of infected people rising daily.
The virus has been detected in more than 160 countries, with the majority of the cases to date reported from China, Italy, Iran, Spain, and Germany.
As of yet, no vaccine currently exists for COVID-19, and fears are rising around the continued spread of the disease, causing serious downturns on the stock market.
The world has been in a panic ever since the new Chinese coronavirus disease — which is now officially known as COVID-19 — began stoking fears of a global pandemic in early 2020.
Since the emergence of COVID-19, markets have suffered their worst falls since the global financial crisis of 2008.
Global investor sentiment has been severely dampened by COVID-19, and it's looking like this will continue for some time until further clarity emerges around the global Coronavirus crisis.
How Will Coronavirus Affect Pot Stocks?
Pot stocks have been experiencing a downturn for the latter half of 2019 and this has continued into 2020. Given that pot stocks don't exist in a vacuum, you can be pretty certain that the ongoing corona crisis isn't going to do any favours for the already struggling global cannabis market.
By that same token, in order to best wade through the current uncertainty regarding COVID-19 and how it relates to pot stocks, it helps to look toward the broader global market to see which stocks are weathering the current storm. One such ASX Biotech is Zoono, (ASX:ZNO), which produces antimicrobial products.
Zoono shares skyrocketed after the company stated that its Z71 Microbe Shield surface sanitiser was highly effective against the bovine Coronavirus in 2014, achieving 99.99% efficacy in just five minutes.
"Given the successful test results in 2014 and since Zoono is very confident that both products will have a level of efficacy against the current strain of the Coronavirus similar to that achieved previously," the company stated.
With many believing that Zoono's technology will be effective against the Coronavirus, investors flocked to the company and the share price rose from less than $1.0 in early February to as high as $2.44.
Great, but what's the connection to pot stocks?
Botanix Pharmaceutical's Antimicrobial Asset
When looking at a phenomenon like Coronavirus, we're reminded of the growing frequency of bacterial diseases and how they're becoming increasingly immune to current treatments.
Due to the overuse of medication, bacteria have developed significant resistance to current antibiotic treatments. On top of this, antibiotics are said to remove more drug-sensitive forms of bacteria, leaving the more resilient forms to propagate.
This overuse of medication is occurring primarily because in many cases, they are being incorrectly prescribed. Studies show that antibiotic therapy is incorrect in 30% to 50% of cases. This alone can cause unnecessary antibacterial resistance and many fear this is precisely what will occur with regards to COVID-19.
Similarly to Zoono, studies revealed that Botanix's drug, BTX 1801, was capable of tackling a range of different bacteria, among both humans and animals. Additionally, the synthetic CBD in Botanix's product kills bacteria within three hours and was shown to lessen the bacteria's ability to develop resistance to the antibiotics.
The cannabis-derived drug has so far proved effective against two superbugs, staphylococcus (staph infections) and methicillin-resistant staph Aureus (MRSA).
We've got our eyes on Botanix Pharma for a number of reasons, but with regards to the current Coronavirus climate, positive results around BTX 1801 are likely to stimulate a lot of investor enthusiasm.
In order to progress BTX 1801 trials, the company received a $50,000 grant from the Federal Government, and Botanix will be beginning phase 2 of the trials in late Q1 of 2020.
Should the results of Botanix's trial be positive, we may see cannabinoid formulas become a staple in addressing future bacterial diseases – and you can expect stock prices to rise at the same time.
Though Botanix isn't resting solely upon this formula either, as the company has several ongoing trials occurring, each targeting enormous addressable markets such as atopic dermatitis, acne, and rosacea. 2020 will see the progression of many of these trials and should any one of these formulas show promise, Botanix may be looking down the barrel of a billion-dollar formula.
Louis O'Neill is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform. Originally published on The Green Fund.
The Green Fund is Asia Pacific's preeminent media house positioned at the forefront of the global cannabis industry. Committed to driving the industry forward, we spotlight the sector from all angles, explore the companies and the players making headlines, and cover some of the biggest cannabis companies in the world.
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.