STENOCARE - CEO Thomas Skovlund Schnegelsberg - interview
87519 Helge Larsen/PI-redaktør 11/10 2020 20:59
CEO Thomas Skovlund Schnegelsberg, STENOCARE, in a digital interview by PROINVESTOR/Helge Larsen on business progress.
October 10, 2020
PROINVESTOR:
Can you start by giving the highlights of what is on your mind these days at STENOCARE?
STENOCARE:
You may remember from our Prospectus this summer, that STENOCARE aim to become a leading European medical cannabis brand. We are working 24/7 towards this ambitious goal, and it continues to be a busy time for STENOCARE. This this not only during September - it is ever since completion of our share issue this summer.
We find ourselves in a very strong financial position with DKK 41 mill cash and no debt. This is unique in our industry these days, and I imagine that many competitors would like to be in the same situation. Therefore, the entire team has been executing our plans according to STENOCARE 2.0 - by accelerating the upgrade of our own cultivation facility and entering into a new country (in September) and having two new products ready for sales.
STENOCARE 2.0 is centered around creating a pharma-like operation, and this will require time, effort and a little patience. Our team has a strong track record for their quality of execution, and this is what the management team is now focusing on. This is the way to deliver value for our approx. 6000 shareholders.
We also (finally) start to see, that the medical cannabis business is entering into a new phase. A few years back there were significant hype coming from North America with unsustainable share prices as a result. Now "reality" has kicked-in and thereby a demand for running the business according to more normal practices. At STENOCARE this shift was expected from our very start, and we have consequently refrained from fueling the hype - and instead build our strategy and business with a different mentality: Have ambitious plans, execute with quality and operate a lean operation that can scale as the market opportunity materialize.
PROINVESTOR:
When will STENOCARE have products in the market?
STENOCARE:
Well, we have two products approved and on their way to the Swedish market. We also have three products in process for approval to the Danish market.
We have been working for +10 months to have products approved for Sweden, and in September 2020 we were able to announce that products from our Canadian supplier were now approved for import into Sweden. This mean we have achieved several major milestones in our strategy: We will have revenue from sales of products, we have increased number of markets that we cover and we have (again) proven our ability to work with health authorities. Being the first-mover in Sweden for medical cannabis oil is also going to give us valuable insight into the treatment process for Swedish patients, and thereby entering more countries that are very early in offering medical cannabis as a supplement treatment. We are currently waiting for the Export certificate from Canada to be processed - which is a prerequisite for shipping the products to Sweden. We hope products will be available for patients during this quarter.
For Denmark, we submitted our application for new imported products in March 2020 and are working with the Danish Medicines Agency to review and document all required information about the products and production from "seed to final product". We have made good progress, but the current processing time at the DMA might be influenced by the Covid19 situation and the Danish lockdown. For STENOCARE the process for having our first oil-products approved in 2018 was fast. It took 6-7 months to complete. It is impossible to say if this is the normal approval time for medical cannabis.
The STENOCARE expected timeline for locally cultivated finished products in Denmark is to have products ready by end 2021 - but this is of course depending on the approval process with the DMA. The Danish cultivation facility is currently being upgraded using the new capital from the share issue. Once operational we have a state-of-art indoor facility that can supply products to Denmark and international markets. Again, we will need the DMA to approve the products before putting them on the market.
It is natural to be impatient with the speed of approval, and this is our reality every single day. However, we continue to remind ourselves that the typical approval process of traditional medicine normally takes 4-6 years (phase 1-3). Therefore, the fast approval process (vs traditional medicine) for medical cannabis products remains a very interesting characteristics for our industry. We can develop a new product and bring it to market much faster than any of the traditional medicines' producers.
PROINVESTOR:
Competition in Denmark recently announced that they were approved and ready to delivery locally produced products to Danish and European patients. Are you losing to competition?
STENOCARE:
The short answer is no... let me explain. In Denmark we have 43 companies with a license to cultivate medical cannabis. Therefore, it was expected that some of them would have had a product on the market today. Even though 2½ years have passed since the beginning of the Danish Pilot - this is still not the case yet. Some of the major cultivators have invested DKK +400 mill over the last two years and at some point, they will be able to have a product approved. One company this summer communicated their plan to have an approved product within 12 months.
In September another announced they are approved and ready. It is not fully clear - what this really mean. When checking with the DMA list of approved products (https://laegemiddelstyrelsen.dk/da/special/medicinsk-cannabis/virksomheder/forsoegsordningen/liste-over-optagne-cannabisprodukter/) - the company has received no product approval for any local produced finished products. Also, when checking their Canadian mother company press releases there is no mention of this significant achievement for their main European operation in Denmark. When checking the DMA homepage for further information, it seems that the company has received the so-called "BULK license" that allow them to sell bulk-materials to other manufacturers (and not finished products for patients).
PROINVESTOR:
Is the medical cannabis market big enough for a larger number of suppliers?
STENOCARE: Yes, indeed. The market for medical cannabis is still in its infancy and with a very interesting growth opportunity in the next 5-10 years. This will attract more companies to enter the market, and we find this both natural and positive. The market dynamics in Denmark has shown an interesting trend. Being a new market, there is limited experience from doctors to prescribe and limited experience for patients of receiving treatment with medical cannabis. Therefore, product availability and a broad product assortment is important to stimulate market growth.
From the beginning of 2018 the reported 120 new patients being treated with medical cannabis grew quarter over quarter. When STENOCARE in September 2018 introduced our oil-products the quarterly growth increased significantly, and this trend continued towards 2000 patients in July 2019 - where we stopped supplying our products. After stopping our supply, the number of patients started to decline. This indicate there is a need to have more products on the market to offer broader choice for different types of patient treatment. More choice will foster growth of patients - as Denmark is still in the very early stage of creating the medical cannabis market that is expected to reach DKK 1 billion over the next 4-5 years.
PROINVESTOR:
Are you concerned that the four-year pilot program that runs until December 2021 will not be continued?
STENOCARE:
The short answer is no. When we look at legalization of medical cannabis around the globe, there is no country with a legalization that has stopped or made it illegal after patients have had access to treatment. The politicians had planned to evaluate the programme during Spring 2020, but due to Covid this has been moved to Autumn 2020. The goal of the evaluation is to decide what happens after December 2021.
The positive interest from people/patients (=voters) to have access to legal medical cannabis has not changed, and most patient organizations are advocating for better access for their members. The Danish Minister of Health has on several occasions stated that he finds it is important the evaluation is completed with the right level of data and insight. In December 2019 and during a Parliamentary meeting Juni 2020 the Minister stated his support to extend the pilot beyond December 2021. This gives better time to get similar data and insight for patient efficacy that has been seen in countries like Canada. It is STENOCARE expectation, that the Pilot programme will be extended for these reasons.
PROINVESTOR:
Thomas ... Thank you for good and informative answers to questions that I as an editor have received from several users on ProInvestor.com
This session has ended
October 10, 2020
PROINVESTOR:
Can you start by giving the highlights of what is on your mind these days at STENOCARE?
STENOCARE:
You may remember from our Prospectus this summer, that STENOCARE aim to become a leading European medical cannabis brand. We are working 24/7 towards this ambitious goal, and it continues to be a busy time for STENOCARE. This this not only during September - it is ever since completion of our share issue this summer.
We find ourselves in a very strong financial position with DKK 41 mill cash and no debt. This is unique in our industry these days, and I imagine that many competitors would like to be in the same situation. Therefore, the entire team has been executing our plans according to STENOCARE 2.0 - by accelerating the upgrade of our own cultivation facility and entering into a new country (in September) and having two new products ready for sales.
STENOCARE 2.0 is centered around creating a pharma-like operation, and this will require time, effort and a little patience. Our team has a strong track record for their quality of execution, and this is what the management team is now focusing on. This is the way to deliver value for our approx. 6000 shareholders.
We also (finally) start to see, that the medical cannabis business is entering into a new phase. A few years back there were significant hype coming from North America with unsustainable share prices as a result. Now "reality" has kicked-in and thereby a demand for running the business according to more normal practices. At STENOCARE this shift was expected from our very start, and we have consequently refrained from fueling the hype - and instead build our strategy and business with a different mentality: Have ambitious plans, execute with quality and operate a lean operation that can scale as the market opportunity materialize.
PROINVESTOR:
When will STENOCARE have products in the market?
STENOCARE:
Well, we have two products approved and on their way to the Swedish market. We also have three products in process for approval to the Danish market.
We have been working for +10 months to have products approved for Sweden, and in September 2020 we were able to announce that products from our Canadian supplier were now approved for import into Sweden. This mean we have achieved several major milestones in our strategy: We will have revenue from sales of products, we have increased number of markets that we cover and we have (again) proven our ability to work with health authorities. Being the first-mover in Sweden for medical cannabis oil is also going to give us valuable insight into the treatment process for Swedish patients, and thereby entering more countries that are very early in offering medical cannabis as a supplement treatment. We are currently waiting for the Export certificate from Canada to be processed - which is a prerequisite for shipping the products to Sweden. We hope products will be available for patients during this quarter.
For Denmark, we submitted our application for new imported products in March 2020 and are working with the Danish Medicines Agency to review and document all required information about the products and production from "seed to final product". We have made good progress, but the current processing time at the DMA might be influenced by the Covid19 situation and the Danish lockdown. For STENOCARE the process for having our first oil-products approved in 2018 was fast. It took 6-7 months to complete. It is impossible to say if this is the normal approval time for medical cannabis.
The STENOCARE expected timeline for locally cultivated finished products in Denmark is to have products ready by end 2021 - but this is of course depending on the approval process with the DMA. The Danish cultivation facility is currently being upgraded using the new capital from the share issue. Once operational we have a state-of-art indoor facility that can supply products to Denmark and international markets. Again, we will need the DMA to approve the products before putting them on the market.
It is natural to be impatient with the speed of approval, and this is our reality every single day. However, we continue to remind ourselves that the typical approval process of traditional medicine normally takes 4-6 years (phase 1-3). Therefore, the fast approval process (vs traditional medicine) for medical cannabis products remains a very interesting characteristics for our industry. We can develop a new product and bring it to market much faster than any of the traditional medicines' producers.
PROINVESTOR:
Competition in Denmark recently announced that they were approved and ready to delivery locally produced products to Danish and European patients. Are you losing to competition?
STENOCARE:
The short answer is no... let me explain. In Denmark we have 43 companies with a license to cultivate medical cannabis. Therefore, it was expected that some of them would have had a product on the market today. Even though 2½ years have passed since the beginning of the Danish Pilot - this is still not the case yet. Some of the major cultivators have invested DKK +400 mill over the last two years and at some point, they will be able to have a product approved. One company this summer communicated their plan to have an approved product within 12 months.
In September another announced they are approved and ready. It is not fully clear - what this really mean. When checking with the DMA list of approved products (https://laegemiddelstyrelsen.dk/da/special/medicinsk-cannabis/virksomheder/forsoegsordningen/liste-over-optagne-cannabisprodukter/) - the company has received no product approval for any local produced finished products. Also, when checking their Canadian mother company press releases there is no mention of this significant achievement for their main European operation in Denmark. When checking the DMA homepage for further information, it seems that the company has received the so-called "BULK license" that allow them to sell bulk-materials to other manufacturers (and not finished products for patients).
PROINVESTOR:
Is the medical cannabis market big enough for a larger number of suppliers?
STENOCARE: Yes, indeed. The market for medical cannabis is still in its infancy and with a very interesting growth opportunity in the next 5-10 years. This will attract more companies to enter the market, and we find this both natural and positive. The market dynamics in Denmark has shown an interesting trend. Being a new market, there is limited experience from doctors to prescribe and limited experience for patients of receiving treatment with medical cannabis. Therefore, product availability and a broad product assortment is important to stimulate market growth.
From the beginning of 2018 the reported 120 new patients being treated with medical cannabis grew quarter over quarter. When STENOCARE in September 2018 introduced our oil-products the quarterly growth increased significantly, and this trend continued towards 2000 patients in July 2019 - where we stopped supplying our products. After stopping our supply, the number of patients started to decline. This indicate there is a need to have more products on the market to offer broader choice for different types of patient treatment. More choice will foster growth of patients - as Denmark is still in the very early stage of creating the medical cannabis market that is expected to reach DKK 1 billion over the next 4-5 years.
PROINVESTOR:
Are you concerned that the four-year pilot program that runs until December 2021 will not be continued?
STENOCARE:
The short answer is no. When we look at legalization of medical cannabis around the globe, there is no country with a legalization that has stopped or made it illegal after patients have had access to treatment. The politicians had planned to evaluate the programme during Spring 2020, but due to Covid this has been moved to Autumn 2020. The goal of the evaluation is to decide what happens after December 2021.
The positive interest from people/patients (=voters) to have access to legal medical cannabis has not changed, and most patient organizations are advocating for better access for their members. The Danish Minister of Health has on several occasions stated that he finds it is important the evaluation is completed with the right level of data and insight. In December 2019 and during a Parliamentary meeting Juni 2020 the Minister stated his support to extend the pilot beyond December 2021. This gives better time to get similar data and insight for patient efficacy that has been seen in countries like Canada. It is STENOCARE expectation, that the Pilot programme will be extended for these reasons.
PROINVESTOR:
Thomas ... Thank you for good and informative answers to questions that I as an editor have received from several users on ProInvestor.com
This session has ended
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87519 STENOCARE - CEO Thomas Skovlund Schnegelsberg - interview
11/10 20:59 Helge Larsen/PI-redaktør 2
11/10 20:59 Helge Larsen/PI-redaktør 2