Edison Investment Research Limited
London, UK, 13 July 2021
Medlab Clinical (MDC): Initiation - Novel drug delivery and cannabinoids against pain Medlab's proprietary platform, NanoCelle, is a patented nanomicellar formulation that can improve the delivery of drugs. Medlab's lead product is NanaBis, a combination of THC and CBD (1:1) cannabinoids encapsulated in NanoCelle particles, which enable a convenient buccal spray formulation. A recent breakthrough was Medlab's announcement that it had successfully produced a synthetic version of NanaBis, which will allow it to move away from a botanical extract. Once the product reformulation is completed (guidance is eight to 10 months), NanaBis will re-enter clinical development (potentially Phase III) as a fully synthetic, non-opioid pain relief drug optimised with proprietary delivery technology aimed at a vast market. Our valuation of Medlab is A$201m or A$0.59/sh. We value Medlab at A$201m or A$0.59 per share, based on an rNPV model, which includes A$10.9m in net cash (current debt of A$94k) estimated at end-FY21 (end of calendar H121). We include NanaBis for cancer-induced bone pain only, but do not yet value potential expansion to a broader chronic pain setting, nor other NanoCelle projects due to their early stage. Using a bottom-up approach, we assume NanaBis launches in 2025 with a success probability of 40% and calculate peak sales of $410m in just this one indication.
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