Last week our company of focus was Delivra Corp (TSXV: DVA), a company with its hands in both the biotech industry, as well as the cannabis sector. We wrote a full analysis on the organization, entitled “Delivra Corp – The Biotech-Cannabis Company You’ve Never Heard Of “. Within the article, we identified several licensing agreements that the company had signed with various industry players. A handful of these agreements were from 2016, and no update had been noted on them. So, we set out to find answers.
To find these answers, we initially contacted the investor relations email inbox for the company. Upon receiving no response, we dived a bit deeper until we found the current relations provider, Joanna Longo of Terre Partners. We bounced a couple emails back and forth, and decided the best format for readers was a Q&A. So, that’s exactly what we did.
Q&A With Delivra Corp’s Investor Relations Team
Q: What is the status of the agreement between Delivra and Canopy Growth Corp? Aside from the initial news release, we couldn’t find any information related to this licensing agreement.
We formulated some products for Canopy last year and we were paid for our work. Canopy is trying to take this expertise in house.
Q: Is this deal essentially concluded, or is it still an ongoing agreement?
We had an agreement with Canopy to formulate cannabis-based products/extracts. That agreement was completed last year. Delivra has the capabilities to formulate products/extracts for any or all cannabis companies in Canada, as they begin their next phase of growth.
Q: When do you expect royalty fees from the three other cannabis / CBD related agreements? I’m aware that Kalytera is currently going through FDA paperwork, but we were curious if there was an estimated timeline or updates for these? The investor deck dated September 2017 indicates that catalysts in the next 12 months include a suite of cannabis related products however details are scarce.
We formulated cannabis / hemp products with Avanti who recently sold part of their company. Any development on these products has been pushed into 2018.
Q: Any details on the royalty fee structure for the current licensing agreements in place?
The royalty fees are double digit for the current licensing agreements.
Q: With all the licensing agreements you have related to cannabis-based therapeutics, is there a reason that there is no mention of these on your website itself? It seems odd that no mention of these products can be found aside from investor documents.
In terms of cannabis, the work we do for cannabis will be focused on formulations in which we formulate a specific product for a cannabis company and receive a royalty on that product. Currently many of the cannabis companies are trying to bring formulation expertise in-house. Delivra has superior formulation expertise and we expect to have more agreements as the industry develops over the next 12 months.
Q: What is the status of the LivSport brand of products? I see the name was mentioned in the latest financials, but your product portfolio on your website has no mention of these products.
We have been focused on growing market share for our currently available suite of OTC products and our pharmaceutical portfolio. As a small company, we only have so many resources. We have chosen to spend some money on marketing efforts on the OTC and building awareness, clinical experience and support for our diabetic wound healing products.
Q: What does the company expect in terms of growth over the next twelve months? Do you expect growth to occur at the current rate, or otherwise?
The Company expects to at least match the current yearly growth of 30% and to begin being EBITDA positive.
Q: You mentioned that due to the size of Delivra, you are currently limited with respect to resources. Is there a financing in the works for the company to support this growth? If so, what format would that likely take i.e. private placement, or a convertible debenture?
The Company continues to look for strategic partnerships. At the present time, there has been no discussions with regards to a financing.
Q: Speaking to Delivra’s OTC and pharmaceuticals products, what near term catalysts are present for these lines? Any new products in the works?
The Company is focused on growing market share for our existing OTC products and building awareness and clinical support for our pharmaceutical products, specifically the diabetic wound healing, LivDOX. We are a small cap company, so we are prudent with our resources and stay focused on what will create the most value for shareholders – marketing dollars to grow sales of existing OTC products.
Q: Expansion into the United States has been slow in coming, presumably because Delivra wants to do it right. What does the schedule look like for its U.S. expansion, will consumers be able to get LivRelief at their local pharmacy any time soon?
The Company is focused on building the LivRelief brand in Canada. It has experienced year-over-year 30% growth. We want to gain more market share in Canada first. We want Canada to be the playbook that is used for when we decide to expand internationally.
There you have it folks, our Q&A period with the Delivra investor relations team. Some new information was gleaned from this such as the positive EBITDA expected by the company, as well as the completion of the Canopy Growth agreement. To this end, we were also contacted by the communications team at Tweed, notifying us of the correction to be made. They declined to respond to our request for further information surrounding the agreement. We also attempted to contact the investor relations team at Kalytera Therapeutics, but did not receive a response prior to the time of publishing.
We’d like to take this time to thank Joanna Longo for the time she took to answer our inquisitive questions, and for putting up with our incessant emails. Her efforts were very much appreciated. We hope this provided some further insight to Delivra Corp, and answered some of the questions you may have had. Based on the responses received, it appears that Delivra will be well positioned going in to 2018, focused on the year to come.
Question what you discover. Seek the answers. Dive Deep.
Information for this Q&A period was provided via Joanna Longo of Terre Partners. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
The original article that this Q&A period is based on can be found here.