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Outperforming Competitors: Innocan Pharma Reports 700% Revenue Increase in Q3

The year 2022 has been a difficult one for many companies. The tech sector is finding it difficult to gain traction amid interest rate hikes while the financial services sector remains under pressure due to recession fears. The pharmaceutical sector has performed terribly in the market as well, but unlike the tech sector where every company is suffering financially, the biotech sector is home to a few outperformers from a financial performance perspective. Innocan Pharma Corp. (CSE: INNO, FSE: IP4), an Israel-based pharmaceutical technology company with a focus on developing innovative drug delivery platforms, is one such outperformer that continues to be overlooked by the market.

Innocan Pharma’s business is centered on developing drug delivery platforms that use cannabidiol. The company operates in three business segments to focus on the development of CBD-loaded exosomes, CBD-loaded liposomes, and the commercialization of CBD-integrated pharmaceutical products. Over the last 12 months, the company has consistently reported monthly revenue gains, and the recently announced third-quarter financials confirm that Innocan is growing fast amid challenging business conditions.

For the third quarter of 2022, Innocan reported revenue of $1.42 million, a remarkable 700% YoY growth from just $180,000 in Q3 2021. The company’s expansion into new business verticals and markets had a lot to do with this exponential revenue growth. The net loss for the quarter came to $2.7 million, a notable 71% decrease from a loss of $9.4 million in the corresponding quarter last year. The company ended the quarter with a cash balance of over $6 million, suggesting Innocan has sufficient liquidity to continue with its R&D spending in the foreseeable future.

The third-quarter financial performance of the company serves as an early indication of the growth that could be expected from Innocan in the coming years. The company’s CBD-loaded liposomes project, which is referred to as the LPT project, is funded by Yissum, Hebrew University of Jerusalem. The two entities have signed a contract that extends through Q4 2023 to carry on R&D investments to commercialize the LPT project. The company expects a commitment of $1.75 million for this project through the contract term, which should enable Innocan to bring at least one product to the clinical stage while securing at least one licensing agreement in the next 5 years. The CBD-loaded exosomes project, which is commonly referred to as the CLX project, is funded by Ramot, Tel Aviv University and the contract has been extended through the fourth quarter of 2023. With an expected commitment of around $900,000 during the contract term, Innocan continues to aggressively conduct research with the aim of licensing one of its products in the short term. The successful licensing of a few products in the coming years should boost the company’s financial performance.

Innocan has already filed for several international patent applications in the last couple of years to secure its technology from competitive threats as well, and these IP rights should help Innocan sustainably grow in the long run. This is another factor that could contribute to stellar revenue growth in the coming years. With several research projects expected to be completed in 2023 including the In-Vivo animal study and the production of CLX, Innocan seems well-positioned to deliver better-than-expected financials in the next few quarters as well.

Many Israeli companies have come under pressure since going public this year due to lackluster financial performance. Innocan Pharma, however, stands out from the rest of the crowd as the company has continued to deliver stellar financials since going public. The negative sentiment toward growth companies in the market has prevented Innocan stock from taking off despite improving financials but things could turn for the better in the coming quarters if the company maintains its streak of delivering better-than-expected numbers.

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