1: What is the vision of STENOCARE?
STENOCARE's vision is to deliver high quality medical cannabis that gives patients a better quality of life.
STENOCARE's work to deliver uniform prescription-based medical cannabis products grown and produced in accordance with the rules of good agricultural practice (GACP) and the rules of good manufacturing practice (GMP).
2: What is the largest challenges?
The short answer is: Time and patience. Let me explain:
The medical cannabis industry is new in Europe, and there is no harmonization of medical cannabis laws across each country. Therefore, the local health authorities are breaking new ground with creating regulatory requirements for production, product safety and controlling companies like STENOCARE. This is a time-consuming work process that must be accepted as part of building the new industry.
The outlook for patient treatment growth is very attractive. Industry analysts estimate the European market to reach Euro 2.2 billion by 2024. Today, there is still limited experience with medical cannabis in Europe and doctors have not received formal training for treatment of various illnesses. Currently, it is the ripple effect that is spreading the knowledge among doctors and patients – and this will over time support the hyper-growth scenarios.
3: What are the key achievement from 2020?
We introduced the company on Nasdaq Growth Market in Copenhagen. The objective was to increase the liquidity and availability of our stock as a first step of our strategy to move to Nordic SmallCap at Nasdaq in due time. In the same process, we successfully increased our financial strength by raising DKK 45 mill and converting DKK 9mdkk in debt. This made us financially strong and debt free – which is a significant competitive advantage in our new industry.
We took several important steps to further leverage our key strategic assets:
1: Commercial assets. We added a “non-legalized” country to our portfolio portfolio (though what we do there is, of course, legally approved). See more details here. This is proof of our ability to be the first entrant on new markets. This way we acquire first mover’s advantages, both in relation to knowledge with local doctors and patients and also in relation to establishing our brand. With this achievement, STENOCARE can approach any country with prescription-based medical cannabis.
2: Regulatory assets. Compliance, control and documentation is a non-negotiable and it has also proven to be a competitive advantage for us – as for example North American competitors have been challenged and even failed to enter into the European markets. We have managed to establish our presence in three very different countries, whereby we have created a regulatory model that can be repeated. We have started two regulatory processes to bring new medical cannabis oil products to patients. The first license for experimental treatment has been given and products were delivered in December. We are still in process with the regulatory process that is targeting the Danish market.
3: Supply Chain assets. Our own cultivation facility in Denmark is being upgraded and expanded with a strong pharma-mindset. This will be a state-of-art indoor facility where all equipment, materials and sensors/controls will enable production of premium medical cannabis with accurate traceability and documentation of quality. We are in the final stage of this project and hope to put it into operation during the first quarter of next year. This will allow us to commence the process of regulatory approval of the new facility and thereby migrate from the small-scale setup to larger scale production of our own products – once they have been approved by the health authorities. The year also saw a new supplier, Panaxia Pharmaceutical, being added to STENOCARE’s supply chain. Having multiple suppliers is an important part of the STENOCARE 2.0 strategy, as it both offers more choice of products to patient treatment and secures future supply of STENOCARE branded products in volume as we grow our market reach.
4: Partnership assets. The strategy is to enter into partnerships that position STENOCARE uniquely in the pharma industry. We have started together with the Danish pharmaceutical development company, Solural Pharma, to research and develop a new type of medical cannabis oil, that has the same treatment efficacy regardless of a dosage being administered before or after intake of food. Also, it might be possible to reduce volume of cannabinoids per dosage for the patient without reduced effect. We are still in the early phase of R&D and in the coming year, we hope to see the first test results from this work.
4: Did Covid19 have any impact on your business?
It goes without saying, that 2020 was a very unusual year for all. Covid19 suddenly changed the agenda for society and businesses. In the early phases, it was not clear how Covid19 would impact STENOCARE and to what extent. We quickly decided to take all possible precautionary actions to safeguard our strategy and financial health. We delayed recruitment of staff and managed all major investment activities closely. This helped us steer through the pandemic without being impacted too much by the general crisis. However, when looking back it is clear that society slowed down during the height of the pandemic and for STENOCARE this has also resulted in delays. Our international building crews at the facility were not able to work for some months as hotels were closed and access to Denmark restricted. The product application work has also been slowed down as health authorities have been occupied with lifesaving mitigation of the covid19 situation. Even though we completed one regulatory process, we had originally hoped to have completed both before the end of 2020.
5: What can shareholders expect from STENOCARE in the coming year?
We have financial strength to execute our strategy, and our three key priorities for 2021 are:
- We will enter 1-2 new countries to offer medical cannabis to more patients
- We will have more products approved by health authorities and sold to patients
- Our own indoor production facility will be in full operation
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