CB2 Insights (CSE:CBII; OTCQB: CBIIF) (“CB2” or the “Company”), a
leading data-driven company focused on bringing real-world evidence
driven from the point-of-care to the medical cannabis community,
today released its CEO’s 2019 Year In Review. The letter,
which has also been sent to Investors, provides an update on the
growth and development of the business last year as well as the
foundation and opportunities that are ahead for 2020. The
letter in its entirety can be found within this release.
Dear Shareholders,
CB2 Insights has been pleased to deliver a year of
outstanding performance for 2019, driven by a strong focus on
establishing business fundamentals, execution of a well defined
business strategy and growth in new business verticals to support a
growing global demand for cannabinoid data and research. Our focus
on execution has allowed us to achieve strong growth in revenues,
improvements in cost efficiencies and an operating structure that
will enable us to reach profitability in Q2 2020.
We closed out the year having become a public
company in March with a mission to increase our patient volume,
improve our technology platform in order to better capture
clinically-validated data within our clinics and begin to leverage
those assets to bring a more traditional level of data and research
to the medical cannabis space. We recognized that while
revenue growth was important, more vital was bringing ourselves to
profitability.
While its not uncommon for a technology and data
firm to grow solely based on external funding during its growth
stage, we had uniquely positioned the company to be largely
self-funded through our clinical operations which in turn allowed
us to avoid having to do large raises resulting in shareholder
dilution.
After the final payout from the acquisition of
Canna Care Docs, we operated with the cash flows that came from the
clinical operations as well as less than $2M in external capital in
our first year as a public company. Many people believed we
would never be able to grow without doing a large financing.
We believe this, in part, is why there has always been significant
pressure on our stock – the assumption that a large raise was
always around the corner.
The facts: We were able to successfully
complete 3 acquisitions, grow the company 24% year on year,
decrease our expenses to near-profitability and now are proving new
verticals of revenue with partnerships managing technology and
research projects with licensed producers, research bodies and
product manufacturers in North America, the UK and Colombia.
We have always approached the industry with a
traditional healthcare slant. In the last few months,
oversight bodies, such as the US FDA, have begun cracking down on
medical cannabis providers who claim benefits to their products but
have yet to prove safety and efficacy through the traditional
healthcare channels. Warnings and demands to remove marketing
statements have reached 20+ companies already. Everyone in
the medical cannabis industry recognizes that clinical trials,
real-world evidence and other means of proving out efficacy are the
only way that the industry will move to its forecasted value.
But most don’t know where to begin.
In just a few short months, we have over $300K in
booked revenue related to our data and research efforts with a
growing pipeline. And as we are currently able to handle
those projects with the team that we already have in place, we
expect strong profit margins of over 50% on that new revenue.
Within these conversations, we are seeing movement that will lead
to multi-million dollar agreements and we are working around the
clock to secure them.
The results for this year come after 5 years of
establishing a strong foundation of technology, data analytical
tools and clinical operations. This foundation sets us apart from
our competitors as CB2 Insights is now in a position to truly
support its customer end to end, maximize revenue and minimize time
and cost in bringing drugs to market. Firstly, establishing large
patient registries and cohorts, gives them access to a large
network of patients to test and qualify their products safety and
efficacy. Secondly, our proprietary Sail electronic data management
platform, allows for big data analytical and insights generation ,
across multiple data sources to help customers in minimizing
clinical trial costs, recruiting patients, identifying future drug
formulations, and validating current products in market. Finally,
full service Contract Research arm with experience in traditional
clinical trials, aims to support customers in the validation and
advancement of drugs to market including registration with
regulatory bodies for future product registration and
commercialization in current and new Global markets. The
investments we have made will now generate a strong return for
shareholders as we have started to monetize and build the pipeline
for further deal flow across all three verticals of the business:
Clinical Operations & Market Access, Technology and Data
Analytics, and Contract Research and Development. They also help
set our expectations for another year of strong double-digit sales
growth, profitability and market expansion.
Fiscal 2019 Operational and Financial
Highlights:
- As of reviewed Q3 2019 financials, YTD revenue of $10.3M
representing a significant YoY growth as well as improved adjusted
EBIDTA from -25% in Q1 to -7% in Q3 with continued improvement into
Q4;
- With the acquisitions of Relaxed Clarity, MedEval and NJAM
clinics, CB2 Insights now owns and operates one of the largest
multi-state networks of specialty clinics in the US assessing
nearly 100,000 patients seeking treatment which provides immediate
market access to US-based product manufacturers for clinical trial
and research programs;
- The Company has built both electronic data capture (EDC) and
clinical data management software (CDMS) tools, which work to
support its partners of any size to execute their data and clinical
strategies. Most recent client announcements include Drug Science
(Project T21), VIVO Cannabis, FCM Global, Premier Health, and My
Access Clinics; and
- Full service contract research organization (CRO) services,
including full-scale clinical trial management, trial design,
monitoring, and other key research functions used by licensed
producers, multi-state operators and traditional pharma companies
entering the medical cannabis space. Most recent client
announcements include Drug Science (Project T21), FCM Global, and
Green Lotus.
We have truly transformed our operation not only to
reach profitability, but to pursue opportunities that will elevate
the position of CB2 Insights as a valuable provider of data and
research to stakeholders in both the medical cannabis and life
science verticals. We are on pace to build and develop the
industries largest data bank of anonymized clinical data on the
safety, efficacy and usage of medical cannabis-based products and
delivery forms. We believe this is going to a vital requirement by
the industry in the years to come.
The time is right. There are no other
companies that are openly vying for this business at the
moment. Which is also partially why it has taken a lot for us
to convince partners that this is how they will secure their
position in the medical cannabis space. But it is also why it
is ours for the taking. When you look at similar companies in
the traditional healthcare space such as IQVIA, Health Catalyst,
Syneos and Medpace, you will see that their valuations are
strong. They represent a stronghold in the traditional
healthcare space – and we are now best positioned to realize the
same value in the coming years.
Our mission continues to be a global leader in
medical cannabinoid therapy data and research. Our technology and
research will continue to deepen insights and improve patient
outcomes, while educating and supporting informed decisions that
improve quality of life.
We are also excited to announce that our most
recent warrant repricing program that offers CB2 the most equitable
form of non-dilutive capital, has had great support and uptake and
we believe will provide adequate capital for CB2 to achieve its
goal of reaching profitability by the end of Q1, 2020. We strongly
believe that this enables CB2 to refrain from any significant
future dilutive share issuances to finance operations and near-term
organic growth.
We look forward to another strong year ahead and
continued demonstration of value to all our stakeholders.
From all of us as CB2 Insights, Happy New Year!
Sincerely,
Pradyum Sekar CEO & Co-Founder
The Year in Review letter to shareholders can also
be found on CB2’s website at:
https://www.cb2insights.com/news/article/1055
About CB2 Insights
CB2 Insights has a mission to mainstream medical
cannabis into traditional healthcare. We are a research and
technology company, offering a suite of data and technology
solutions as a full service clinical CRO, specializing in Phase II,
III and IV, post-marketing, observational and experimental trials
in a range of therapeutic areas for sponsors worldwide. CB2
Insights helps industry stakeholders create a strong value story
with Real World Evidence, generation of safety and efficacy data,
operating in two segments: clinical solutions and data
solutions.
For more information please visit
www.cb2insights.com.
Primary Contact:Dan ThompsonChief
Corporate Officer1.855.874.4999 ext.
120investors@cb2insights.com
Forward Looking Statements
Statements in this news release that are
forward-looking statements are subject to various risks and
uncertainties concerning the specific factors disclosed here and
elsewhere in CB2’s filings with Canadian securities regulators.
When used in this news release, words such as "will, could, plan,
estimate, expect, intend, may, potential, believe, should," and
similar expressions, are forward-looking statements.
Forward-looking statements may include, without
limitation, statements regarding the opportunity to provide
services and software to the U.S. cannabis industry.
Although CB2 has attempted to identify important
factors that could cause actual results, performance or
achievements to differ materially from those contained in the
forward-looking statements, there can be other factors that cause
results, performance or achievements not to be as anticipated,
estimated or intended, including, but not limited to: dependence on
obtaining regulatory approvals; investing in target companies or
projects which have limited or no operating history and are subject
to inconsistent legislation and regulation; change in laws;
reliance on management; requirements for additional financing;
competition; hindering market growth and state adoption due to
inconsistent public opinion and perception of the medical-use and
recreational-use marijuana industry and; regulatory or political
change.
There can be no assurance that such information
will prove to be accurate or that management's expectations or
estimates of future developments, circumstances or results will
materialize. As a result of these risks and uncertainties, the
results or events predicted in these forward-looking statements may
differ materially from actual results or events.
Accordingly, readers should not place undue
reliance on forward-looking statements. The forward-looking
statements in this news release are made as of the date of this
release. CB2 disclaims any intention or obligation to update or
revise such information, except as required by applicable law, and
CB2 does not assume any liability for disclosure relating to any
other company mentioned herein.
No securities regulator or exchange has
reviewed, approved, disapproved, or accepts responsibility for the
content of this news release.
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