For those of you who may be new to the story, let’s begin with a little background on Cardiol Therapeutics.
It seems as if the presence of ultra-pure cannabidiol-based medication in the world of big pharma has finally begun to take its place. Once a speculative, mysterious “anti-anxiety” THC alternative, CBD is now becoming a household name.
Void of any psychoactive effects (meaning the things that make you feel “high”), CBD, among other things, boasts anti-inflammatory, and even potentially anxiety-curbing properties. It is now widely used amongst people of all ages (and even their pets).
If you’re wondering what CBD has to do with Cardiol, then yes, you must be new here. CBD is the central component in Cardiol Therapeutics lead product, CardiolRx™: a pharmaceutically produced oral cannabidiol formulation, which bears anti-inflammatory and anti-fibrotic properties, was developed for those who do not wish to, or are medically advised not to, ingest THC.
CardiolRx is currently being investigated in a Phase II/III outcomes study (the LANCER trial) which is designed to evaluate the efficacy and safety of CardiolRx as a cardioprotective therapy to reduce mortality and major cardiovascular events in patients hospitalized with COVID-19 who have a prior history of, or risk factors for, CVD, and to investigate the influence CardiolRx has on key markers of inflammatory heart disease.
Cardiol has also received clearance from the FDA for its IND application and Health Canada approval for a Phase II international trial that will investigate the anti-inflammatory and anti-fibrotic properties of CardiolRx in patients with acute myocarditis, which remains a leading cause of sudden cardiac death in people under 35 years of age.
Additionally, Cardiol is developing a subcutaneous formulation of CardiolRx and other anti-inflammatory therapies for the treatment of chronic heart failure.
Considering cardiovascular diseases is the leading cause of death in the U.S. and rings up over US$30 billion in hospital bills annually, one can imagine the potential of Cardiol’s products is rather welcome in the world of healthcare. But what does the market think of it?
Once Jazz Took Notice, Nothing Was the Same
Back in early February, when Jazz Pharmaceuticals agreed to outright buy GW Pharma, it rippled waves throughout the biotech community and the pharmaceutical sector. For the first time, a global biopharmaceutical giant had taken notice at what a biotech company using cannabinoid-derived products can be capable of.
The acquisition sent the stock price of GW Pharma and even CRDL through the roof that week. US$7.2 billion later, GW Pharma, which Cardiol is often called an “early-stage” version of, is about to become a subsidiary of one of the world’s largest biopharma companies.
With a cost advantage to GW, Cardiol has hit the ground running with the recent uplisting of its common shares to the NASDAQ (CRDL), widely regarded as the premier stock exchange for biotech companies.
“Listing on NASDAQ is a major milestone for our Company as NASDAQ is the premier global stock exchange for life science and biotechnology companies. As we continue to advance the research and clinical development of novel therapeutic strategies for inflammatory heart disease, we believe the Nasdaq listing will enable the execution of a more effective investor relations program aimed at increasing awareness of the Cardiol story amongst investors and analysts in the U.S. and ultimately lead to increased shareholder value,” stated David Elsley, President and CEO of Cardiol Therapeutics.
For those that don’t understand the true significance of this, it means that an entirely new pool of investors has access to the Cardiol stock and can thus invest in it. In short, hello there, Robinhood investors…
Cardiol recently completed a US$50M public offering for the purpose of advancing their research and clinical development programs, additional product development, and for general corporate purposes. Cardiol is positioned with C$32.7 million in cash and even better…zero debt.
Warrants and stock options essentially serve the same function; they give you the right to buy the stock at a fixed price.
When companies issue warrants, it is often at a strategically determined future price, higher than the current stock price, but lower than what the projected price range could be. These “rights” to buy the stock at a fixed price are meant to serve two functions:
- They bring capital into the company, as investors must still put up the funds to exercise these rights to buy the stock; and
- They showcase a mutualistic relationship between the company and its shareholders, as they are both agreeing that the company will be worth more in the future.
Stock options are very similar in function; however, they are typically granted to directors or employees of the company. Unlike warrants, which can be priced strategically, stock options are priced at either the closing price in the market on the day of grant or the previous day’s closing price – whichever is higher.
With NASDAQ approval, plenty of cash in the bank, and debt-free, we can imagine Cardiol is in great spirits for many years to come.
Disclaimer: Cardiol Therapeutics is a communications client of Edge Investments, and we own shares in the company.