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Israeli cannabis company Univo Pharmaceuticals Ltd (TLV: UNVO) saw its stock soar this week, especially on Thursday, after the company reported preliminary results for the first half of 2020.
The spike comes on the heels of several company announcements.
Univo said it expects to report a gross profit margin of 50%, and more than 100% growth in revenue for the first half of 2020.
Univo reported that it processed about a ton of cannabis at its plant during the first half of the year. It expects to process an additional two tons of raw materials during the current quarter.
Earlier this week, it agreed to purchase medical cannabis from Israeli farm Telecann.
The deal was signed on an exclusive basis, and stipulates the purchase of 3 tons of cannabis per year, for the following 3 years.
Univo said the first shipment is expected to reach the plant next month. The genetics were developed by one of the most respected and oldest cannabis companies in Israel.
According to the company, the price of the raw materials in this deal will range from NIS 4 ($1.15) to NIS 6.5 per gram, depending on the strains. The consideration for each order will be paid in three unequal installments in accordance to a payment schedule determined by the parties.
While Univo didn’t specify the financial value of this deal, industry sources in Israel told Benzinga that, given an average selling price of NIS 5 per gram, Univo should be paying roughly NIS 15 million per year for the product.
Univo reported that it had ordered cannabis from Mernova, a Canadian subsidiary of Creso Pharma Ltd. (OTC:COPHF). The order is meant for the production and sale of Univo’s branded products via pharmacies around Israel.
The deal is subject to receipt of all of the permits required to import the raw materials to Israel.
Univo estimates that the products in the upcoming shipment could generate around NIS 5 million in revenues. While the company didn’t disclose the deal’s extent or value, Benzinga learned that the company ordered more than 200 kilograms of premium cannabis from Creso Pharma Canada at estimated C$650,000 ($480,000) for the production and marketing of premium products.
"We have been selling our products since the beginning of the year in dozens of pharmacies, gaining important information on patients’ needs and demands,” said Univo CEO Golan Bitton. “At the same time, we are signing deals with unique genetics developers and medical quality cannabis products to meet resulting market trends and create availability of hundreds of kilograms per month throughout the year. Univo aims to bring its plant production to a rate of more than 40 tons of medical cannabis products per year, while currently purchasing cannabis from several farms in Israel.”
Lead image by Ilona Szentivanyi. Copyright: Benzinga.
Posted In: COPHF
