Pivot Brings Intellectual Property Business Model from Pharma to Cannabis Industry
Ryan Allway
March 15th, 2018
Exclusive, News, Top Story
The cannabis industry is projected to reach $50 billion by 2026, according to Cowen & Co., driven by the ongoing legalization of medical and adult-use cannabis throughout the United States. While investors have traditionally focused on cultivators and dispensaries, these companies could face commoditization over the long-term given the “race to the bottom” when it comes to retail cannabis prices.
Pivot Pharmaceuticals Inc. (OTCQB: PVOTF) (CSE: PVOT) is taking a pharmaceutical and nutraceutical approach to the industry by applying its proprietary delivery technologies to create high-margin, differentiated products in the space. With a robust clinical pipeline in place, investors may want to take a closer look at the stock as it progresses through development.
Commoditization of Cannabis
The cannabis industry has experienced tremendous growth over the past several years, but the industry’s strong growth has put pressure on retail cannabis prices. Mazakali estimates that the median price for legal cannabis has fallen at a 20 percent annual rate in the five years leading up to 2017 and anticipates a similar decline going forward. The recent rush to greatly expand production of cannabis flower, especially in Canada, could apply further downward pressure to flower prices.
The same report notes a rise in retail demand for edibles, tinctures, capsules, sprays, oil cartridges and other cannabinoid delivery mechanisms, taking market share away from cannabis flower products. And while pure extract prices are going down, that only means better margins for infused retail brands as consumers move toward more health-oriented options and away from smoking as a delivery method.
Many cultivators have responded by increasing their production capacity and reducing costs through newer, more efficient growing technology. Other companies have focused their efforts on developing differentiated products to meet the public’s shifting preferences.
New Business Models
Pivot Pharmaceuticals has its roots in the pharmaceutical and nutraceutical industries with a focus on innovative drug delivery platforms. By applying the intellectual property (IP) model from these industries, the company is focused on building a line up of high-margin, differentiated products that effectively deliver cannabinoids for a variety of applications. This approach insulates it from the commoditization that many other companies face in the space.
Pivot has four proprietary delivery systems. The company recently acquired ERS Holdings and its patented RTIC™ (Ready-To-Infuse-Cannabis) technology. The patent covers the transformation of cannabis oil into powder for inclusion in food and beverage products. The company also filed continuation patents covering inclusion in health and wellness products like sleep aids and cold medications. As a result of the acquisition, RTIC Labs was formed in California with the intent of developing and distributing products utilizing the proprietary technology. The cannabis oil powder is stable, emulsified and flavorless, lending itself to a wide variety of infused applications.
Pivot also recently acquired Thrudermic, LLC and its patented TDL Transdermal Nanotechnology, filing three additional patent applications to further expand protection of the proven drug delivery technology. The technology is lipid-based and relies on nano-dispersion of cannabinoid particles which do not dissolve readily in water but will dissolve in fat. Increased bioavailability, controlled drug release rates, and accurate dosing are the big advantages with this technology.
BiPhasix™ is a patent-pending topical transdermal drug delivery platform. Pivot’s lead product for this technology is PGS-N005, a topical cream aimed at treating female sexual dysfunction (FSD). FSD is estimated to affect up to 43% of women between the ages of 18 and 59, and is only recently getting attention from traditional pharmaceutical companies. Pivot is also developing, among other candidates, a cream for the treatment of psoriasis.
Solmic™ Micelle oral delivery technology is Pivot’s fourth proprietary platform. The technology offers high bioavailability and stability of cannabinoids utilizing easy-to-use oral drops, allowing the active ingredients to become water soluble without changing their effectiveness or composition. The initial product here is PGS-N001 intended for cancer supportive care, with other products targeting opioid withdrawal and restless leg syndrome.
These products will be initially registered as Natural Health Products (NHPs) for consumers through its Pivot Green Stream subsidiary, which translates to a faster time to market and near-term revenue.
The company’s long-term pipeline consists of eight natural health products and six pharmaceutical products, which are in various stages of development. By simultaneously developing both types of products, the company is positioning itself to generate both short-term revenue from direct-to-consumer sales and long-term value through a traditional pharmaceutical approach where insurers would eventually cover the cost of prescriptions.
Looking Ahead
Pivot Pharmaceuticals Inc. (OTCQB: PVOTF) (CSE: PVOT) represents a unique investment opportunity in the cannabis industry. With a focus on high-margin, patent-protected, differentiated products, investors don’t have to worry as much about the risk of commoditization, as they would with traditional cultivators. Management’s focus on both near-term value through NHPs and long-term value through traditional pharmaceuticals also represents the best of both worlds for investors.
For more information, visit the company’s website at www.pivotpharma.com.
Disclaimer
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please see our disclaimer below and follow the link to view our full disclosure outlining compensation: https://cannabisfn.com/legal-disclaimer/
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
About Ryan Allway
Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.
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