Aurora Cannabis and CTT Pharmaceutical Announce Launch of Sublingual Cannabis Wafers – Canada NewsWire

EDMONTON and HAMILTON, ON, Oct. 8, 2019 /CNW/ – Aurora Cannabis Inc. ("Aurora") (NYSE |TSX: ACB), the Canadian company defining the future of cannabis worldwide, and CTT Pharmaceutical Holdings, Inc., ("CTT") (OTC | CTTH) announced today the successful commercialization of CTTs cannabinoid-infused sublingual wafers. The new cannabis product line, a first of its kind, has been launched by Aurora in the Canadian medical cannabis market under the brand name "Dissolve Strips™".

Aurora has an ownership interest in CTT of approximately 9%, with a warrant allowing it to increase its stake to 42.5%, and access to CTTs sublingual wafers drug delivery technology, which is patent protected or patent pending in multiple jurisdictions.

As of October 7, Aurora Cannabis was trading at a forward EV-to-sales (enterprise value-to-sales) multiple of 6.17x compared to 7.94x at the beginning of January. The companys valuation multiple has crashed from its high of 25.24x in September 2018. Its stock price has suffered amid the larger sector sell-off. The companys weaker-than-expected fourth-quarter revenue performance and MKM Partners sell rating have also pressured its stock. Despite these hurdles, there might be hope on the horizon. On October 3, the company provided an update on its ongoing growth operations and growth initiatives.

"Auroras Dissolve Strips™ provide unique advantages over other ingestible products due to their ease of administration, discrete nature and accurate dosage, that provides more rapid bioavailability of cannabinoids via sublingual use," said Terry Booth, CEO of Aurora. "This adds yet another innovative offering to our growing portfolio of high quality, medical products that we offer our patient base, and is testament to our industry leading ability to work with technology partners and regulators to bring new form factors to market rapidly."

CTTs CEO Cam Birge, added, "The product launch with Aurora of the Dissolve Strips™ is a major milestone for us that marks the transition of CTT from a technology development phase to a revenue generating phase. This is the culmination of years of hard work by our founder Dr. Modi and the entire CTT and Aurora product development teams. We are very proud of this co-achievement and congratulate Aurora for the considerable efforts and product enhancements to bring Dissolve Strips™ to the cannabis market. Our sights, however, are set much higher. The next stage in our development will be the launch of a broader portfolio of unique products on a global scale. We have been working towards this, and I look forward to reporting on our progress in the coming quarters."

Cannabis stocks have undoubtedly become one of the most controversial investments of 2019. The phenomenal returns of 2018 continue to lure investors to these stocks. However, the markets risk profile has taken a turn for the worse this year. Increasing tensions between the US and China have taken their toll on all companies, including cannabis companies. Increasing consumer and regulatory concerns about vaping are also putting pressure on the overall investor sentiment.

Orally Dissolvable Thin Film ("ODF") Wafers ("wafers" or "sublinguals") are a proprietary drug delivery mechanism in the form of paper-thin polymer films used as carriers for pharmaceutical agents that have the following benefits:

Aurora Cannabis continues to trade at a premium compared to the median multiple of the cannabis sector. Aphria, however, is trading at a significant discount to the median. The median was calculated based on the multiples of 12 Canadian cannabis companies: Canopy Growth, Tilray, Aphria, Aurora Cannabis, KushCo Holdings, Cronos Group, Green Thumb Industries, Innovative Industrial Properties, HEXO, Supreme Cannabis Company, CannTrust Holdings, and OrganiGram Holdings.

Headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 625,000 kg per annum and sales and operations in 25 countries across five continents, Aurora is one of the worlds largest and leading cannabis companies. Aurora is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis and hemp production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.

Aurora Cannabis (ACB) and Aphria (APHA) are down 17.14% and 5.27%, respectively, YTD (year-to-date). These performances are mostly in line with the overall downtrend in the cannabis sector. Sector ETFs such as the ETFMG Alternative Harvest ETF (MJ) and the Cambria Cannabis ETF (TOKE) are trading 53.96% and 30.79% lower than their respective 52-week highs. But which of these two stocks makes the most investment sense in these dire circumstances?

Highly differentiated from its peers, Aurora has established a uniquely advanced, consistent and efficient production strategy, based on purpose-built facilities that integrate leading-edge technologies across all processes, defined by extensive automation and customization, resulting in the massive scale production of high-quality consistent product. Designed to be replicable and scalable globally, our production facilities are designed to produce cannabis at significant scale, with high quality, industry-leading yields, and low-per gram production costs. Each of Auroras facilities is built to meet European Union Good Manufacturing Practices ("EU GMP") standards. Certification has been granted to Auroras first production facility in Mountain View County, the MedReleaf Markham facility, and its wholly owned European medical cannabis distributor Aurora Deutschland. All Aurora facilities are designed and built to the EU GMP standard.

On October 7, Aphria closed at $5.39. The stock has risen 3.85% in the last week but fallen 23.65% in the last month. The stock is trading at a 66.71% discount to its 52-week high of $16.19. Aphria has been one of the few cannabis companies to beat consensus estimates in its latest earnings results. This performance helped boost the overall analyst and investor sentiment for the company.

In addition to the Companys rapid organic growth and strong execution on strategic M&A, which to date includes 17 wholly owned subsidiary companies – MedReleaf, CanvasRX, Peloton Pharmaceutical, Aurora Deutschland, H2 Biopharma, BC Northern Lights, Larssen Greenhouses, CanniMed Therapeutics, Anandia, HotHouse Consulting, MED Colombia, Agropro, Borela, ICC Labs, Whistler, Chemi Pharmaceutical, and Hempco – Aurora is distinguished by its reputation as a partner and employer of choice in the global cannabis sector, having invested in and established strategic partnerships with a range of leading innovators, including: Radient Technologies Inc. (TSXV: RTI), Cann Group Ltd. (ASX: CAN), Micron Waste Technologies Inc. (CSE: MWM), Choom Holdings Inc. (CSE: CHOO), CTT Pharmaceuticals (OTCC: CTTH), Alcanna Inc. (TSX: CLIQ), High Tide Inc. (CSE: HITI), EnWave Corporation (TSXV: ENW), Capcium Inc. (private), Evio Beauty Group (private), and Wagner Dimas (private).

Aphrias forward EV-to-sales multiple also declined from 2.88x on January 2 to 1.83x on October 7. The declines in Aphrias share price and valuation multiples mostly reflect sector-wide concerns. The company, however, is being increasingly recommended by analysts as an attractive investment opportunity. Its also focusing on leveraging the upcoming Cannabis 2.0 opportunity.

Auroras Common Shares trade on the TSX and NYSE under the symbol "ACB", and is a constituent of the S&P/TSX Composite Index.

On October 7, Aurora Cannabis was trading at a forward EV-to-EBITDA multiple of 30.98x compared to 97.97x at the beginning of September. The companys valuation multiple has fallen due to the combined impact of its lower share price and its increased EBITDA estimates. Analysts expect the companys fiscal 2020 EBITDA to be -35.39 million Canadian dollars.

CTTs principal asset is a unique and novel patented drug delivery technology, an orally administered, fast dissolving thin film (the "Wafer"). This technology platform will target both the human and veterinarian (pet) markets for treatment of many diseases. The Company believes that its Wafer technology will be one of the first to gain use in major markets such as pain management. Several Canadian and U.S. patents protect the Oral Thin Film (Wafer) formulation.

Aphria was trading at a forward EV-to-EBITDA multiple of 10.02x on October 7. This multiple was close to its valuation multiple of 10.00x on January 2. The companys share price has remained mostly stable since the beginning of 2019. Analysts expect its fiscal 2020 EBITDA to be 64.73 million Canadian dollars.

CTTs oral fast dissolving drug delivery systems consist of edible Wafers that dissolve without water and within a few seconds after placement in the mouth. The majority of drugs administered using our drug delivery system mirror injections in that they have the ability to enter the bloodstream quickly, are convenient and discreet, and can be administered anywhere. A faster absorption rate is achieved because the mouth contains a very thin mucosa and is extremely vascular. There is no bitter taste, no smoke inhalation, less degradation of medication (by bypassing the stomach) and most importantly lower dosage units are required given the efficacy of absorption. Patient compliance is also improved especially with those who have a fear of choking or difficulty swallowing, and/or are pediatric, geriatric or incapacitated.

There have been few positive developments for the sector. Prominent among them is the passage of the SAFE Banking Act of 2019 and favorable results reported by the CATO institute. To learn more about the SAFE Banking Act, read Marijuana Legalization: House Passes SAFE Act in the US.

This news release includes statements containing certain "forward-looking information" within the meaning of applicable securities law ("forward-looking statements"). Forward-looking statements are frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

Neither TSX, NYSE nor their applicable Regulation Services Providers (as that term is defined in the policies of the Toronto Stock Exchange and New York Stock Exchange) accept responsibility for the adequacy or accuracy of this release.

We shouldnt try to time the lows, but should understand that when we do take positions they could still drop. The key is not to let pressure from further decline in share price (if thats how it plays out) flush us out of our positions. Investors should look at holding for the long term when they invest under current market conditions, because when the turnaround comes, its going to reward those investing in companies with long-term potential.

For further information: For Media: Heather MacGregor, +1.416.509.5416, [email protected]; For Investors: Rob Kelly, +1.647.331.7228, [email protected]

The Motley Fool Canada Cannabis Stocks Investors: Could Aurora Cannabis (TSX:ACB) Stock Make a Comeback?

Aurora Cannabis (TSX:ACB)(NYSE:ACB) had a terrible day on Monday, sliding from $5.8 to $5.47 — a 5.7% decline. The decline came after a mixed fourth-quarter earnings report, which saw soaring revenue but negative earnings.

Not too long ago, Ontario only had five physical locations consumers could buy cannabis products; thats in a market numbering in the millions. While its still going to take time to reach market saturation and full potential, at least there is some progress being made on that front, and that will benefit Aurora, especially as it benefits from sales from derivatives in the first calendar quarter of 2020.

Although Aurora has been making strides toward profitability recently, with shrinking losses and soaring cannabis sales, it hasn’t been quite what investors were hoping for. However, with the company’s financials starting to turn around, it’s worth asking whether this stock could make a comeback. Unlike Canopy Growth, this company’s losses are actually shrinking rather than growing, so it may have a chance. To understand why that’s the case, we need to look at the stock’s performance so far this year.

The analyst believes the company boasts solid operating fundamentals which “paints a picture of a business in good health.” The analyst added, “When considered alongside one of the lowest valuations among peers (CY20 EV/EBITDA 8.6x, Tilray 8.9x, Canopy 10x, Cronos 12.5x), we continue to see upside from here.” (See ACB stock analysis on TipRanks)

ACB has been one of the worst-performing TSX stocks of 2019. Starting off the year at $7.09, it’s down about 17% as of this writing. Although Aurora is down less than marijuana stocks as a whole — as measured by Horizons Medical Marijuana Life Sciences ETF — it’s performed terribly compared to the TSX.

Contrary to some commentators, the cannabis market is not experiencing oversupply at this time, especially in Canada. The problem isnt demand, but the lack of retail outlets to sell cannabis to consumers. That is gradually getting fixed, and it should, in the near future, have a significant impact on the performance of Aurora.

Such underperformance has been depressing to look at. However, it has had the effect of making Aurora shares cheaper. This stock, which was previously one of the most expensive on the TSX, now has a lower price-to-sales ratio than Shopify. Granted, it’s still expensive, but it’s cheaper than many other marijuana stocks while having the growth needed to justify a steep valuation. This may suggest that the stock could make a comeback. However, before we entertain that possibility, we need to look at the company’s losses.

The most important question to ask concerning Aurora Cannabis, or any cannabis company for that matter, is whether or not the narrative of the company remains intact. In the case of Aurora, nothing has changed concerning its long-term growth except itll take a little longer to generate a profit than originally believed.

In its most recent quarter, Aurora posted a loss of $11.7 million on revenues of $98 million. That loss is down significantly from the prior quarter, when the company lost $36 million. It’s also pretty low as a percentage of revenue. These two factors, when combined, would tend to indicate that Aurora could be within striking distance of profitability. However, marijuana stocks’ earnings tend to be influenced heavily by unpredictable financial changes like fair-value adjustments and impairment charges, so it’s hard to say whether the trend seen over the last two quarters will persist.

Ultimately, whether Aurora stock makes a comeback will depend on what happens when it next releases earnings. Investors are going to want the revenue growth from previous quarters to continue, and for the stock to continue trimming its net and operating losses.

Its readily apparent that nothing is going to stop the growth trajectory of cannabis for a long time. As a matter of fact, where its struggling is directly correlated with under performing government bureaucracies, heavy taxation, and regulations that differ from province to province of state to state.

That may be easier said than done. As I’ve written in previous articles, many weed stocks have significant amounts of goodwill on their books, some of which may have to be written down. When goodwill is written down, it not only reduces book value but also results in “mark-to-market” losses on the income statement. Currently, Aurora Cannabis has $3.17 billion in goodwill on its books, which means that it could lose substantial amounts of money on impairment charges. If that comes to pass, then expect the stock to not only not make a comeback, but slide much further.

In some cases of course companies deserve the negative outlook concerning them – both in the short and long term, because their performances are not only weak, but the way to increased sales and ultimate profitability are not visible at this time.

Marijuana was legalized across Canada on October 17th, and a little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

Besides making key partnerships with Facebook and Amazon, theyve just made a game-changing deal with the Ontario government.

This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.

Fool contributor Andrew Button has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.