Opened: 01-Jul-2022
Shares Held at Open: 500,000
What does BOD do?
BOD Australia is a cannabidiol (CBD) wellness and medical cannabis company.
BOD’s CBD wellness arm makes up the bulk of its revenues and is backed by the innovation arm of Health & Happiness International (owners of the Swisse brand), New H2 Ltd.
BOD’s medical cannabis arm is building a suite of IP for future medical cannabis product commercialisation and licensing deals via clinical trials.
Over the next 12 months the company is progressing two clinical trials for new CBD-based treatments for insomnia and long-Covid.
What is the macro theme?
Globally, regulatory shifts towards cannabis reclassification are providing opportunities for new, legal products and treatments. According to market research from BDSA, legal global cannabis sales hit $21 billion last year and are expected to grow at 16% CAGR to surpass $61 billion in 2026.
In Australia, the Therapeutic Goods Administration (TGA) decision to down-schedule low dosage CBD products to Schedule 3 medicines means that these products will be available over the counter without requiring a prescription, paving the way to broader consumer reach.
Our Big Bet for BOD
BOD will deliver a minimum 10x return on successfully commercialising at least one application of their new technology that optimises the human body’s absorption of cannabinoids.
Why did we invest in BOD?
Clinical trial results could lead to a re-rate
Biotech and healthcare stocks can deliver large re-rates following successful clinical trials for new products/treatments. This is due to the value of the IP being generated.
BOD is progressing two clinical trials over the next 12 months and we are holding to see what value can be created here.
Ongoing R&D work has potential to bolster commercial opportunities
BOD is conducting additional R&D and collaboration work with multiple leading medical institutions in Australia. This work is supported by leading medical researchers and an advisory board with expertise in genetics, extraction, and product development.
We are looking out for BOD to deliver new product commercialisation and licensing deals over the long term.
Major shareholder support
BOD is the exclusive CBD partner for global healthcare giant H&H, enjoying its strong distribution footprint across the globe and capacity to fast-track products to several international markets. This level of support is lacking from many of BOD’s peers, removing a key distribution hurdle for BOD. H&H is the major shareholder of BOD through its innovation arm, NewH2, holding a 14% stake in the company.
Medical cannabis sector could swing back into favour
The medical cannabis sector has been out of vogue for a prolonged period of time (over 12 months). Our experience tells us that this is a cyclical shift which could reverse in the coming 12 months. The catalyst for this could be regulatory reform, further legalisation or changes in consumer preferences. We think BOD stands to benefit in this market environment.
What do we expect BOD to deliver?
Objective #1: Complete UK open-label “Proof of Concept” clinical trial for MediCabilis treatment for Long-Covid to expand prescription numbers
Milestones
Patient recruitment for 26 weeks programme
Completion of trial (Q4 – Q1, 2023)
Results of trial (Q4 – Q1, 2023)
Registration of MediCabilis as treatment for Long-Covid (Q4 – Q1, 2023)
Objective #2: Complete Australian Phase IIb clinical trial and make low-dosage CBD treatment for insomnia available without a prescription
Milestones
Patient recruitment for 12 weeks programme (Q2-Q3)
Completion of trials (Q4)
Results of trial (Q4 – Q1, 2023)
TGA submission (Q4- Q1, 2023)
Objective #3: Schedule 3 CBD product registration in Australia to allow sale in pharmacies in Australia
Milestones
Sales agreement with potential distributors (Q4 – Q1, 2023)
TGA approval (late Q2 2023?)
Product launch (late Q2 2023?)
Objective #4: Develop and launch epilepsy treatment
Added 28-Sep-2022
Milestones
Commence epilepsy moonshot study [H2 2022]
Launch Investigational New Drug (IND) application [2023]
FDA meetings [2023]
Complete epilepsy moonshot study
Submission for FDA approval via new drug application pathway [H2 2023]
Potential FDA approval [H1 2024]
Launch competitor product and sell in the US market
Objective #5: Acqua Phase Incorporation
Added 28-Sep-2022
What could go wrong?
Technical failure
BOD’s two clinical trials are designed to determine the safety and effectiveness of CBD products/ treatments on patients, as well as provide data on side effects and preferred dosages. Despite CBD generally being accepted as safe, there is no guarantee that BOD’s new products will prove effective following the trials.
Market risk
Alternative products are available within the markets that BOD targets with their own pricing and marketing channels, which can impact demand for BOD’s products. In Australia, BOD’s product is priced at the premium range of the spectrum of cannabis based CBD products, due to the fact that they are GMP validated. There is the potential for lower cost hemp based CBD products, such as those cultivated in the United States and potentially supplied by competitors, to compete and significantly reduce the market price.
Regulatory risk
Any new CBD-based products and treatments must receive approval from the appropriate regulatory bodies within the desired markets. There is no guarantee that BOD’s products will receive such regulatory approvals, or may be delayed from entering new markets. For instance, the Food Standards Agency (FSA) in the UK regulates that only products which have a valid Novel Food application are allowed on the market – it is only at the start of 2022 that BOD was granted such approval.
Financial risk
BOD is yet to generate profits or become cashflow positive, and so relies on favourable external capital markets for funding. With $4.47M cash at bank at 31 March 2022, BOD appears to be well positioned to not require another capital raising for the remainder of the year, but there is no guarantee that this is the case.
What is our investment plan?
We originally Invested in BOD in early 2021 at 50c because we believed the stock was on the cusp of a further growth underpinned by growing revenues.
Since then the stock has underperformed and is now trading at ~15c, well below our Initial Entry Price of 50c.
We have not sold any shares and will continue to hold our full position in the expectation of a share price re-rate on the company achieving at least one of the objectives outlined above.
Disclosure: The owners of Wise-Owl, S3 Consortium Pty Ltd, and Associated Entities, own 500,000 BOD shares at the time of publication. S3 Consortium Pty Ltd has been engaged by BOD to share our commentary on the progress of our Investment in BOD over time.
First on the ASX - BOD announces successful outcome for insomnia clinical trial
Sep 6, 2023
Sep 6, 2023 |
12 min
Our investment, BOD Science (ASX: BOD), has successfully demonstrated the statistical efficacy of its 100mg CBD product for treating insomnia in a Phase IIb study. This milestone puts BOD on track to be the first Australian company to offer a CBD-based insomnia treatment over-the-counter.
BOD acquires CBD technology, insomnia trial results next two weeks
Aug 15, 2023
Aug 15, 2023 |
13 min
Our micro-cap cannabis and life sciences Investment Bod Science (ASX:BOD) has clinical trial results incoming. In less than two weeks we should know the results from the Phase IIb clinical trial for insomnia.
Microcap Cannabis Stock BOD has two major near term catalysts…
Jun 26, 2023
Jun 26, 2023 |
16 min
BOD Science (ASX:BOD) has shifted gears from slowly growing revenue, in favour of going for a big blue sky approach to delivering shareholder outcomes. With two near term catalysts on the horizon, could this be the time for BOD?
BOD: Clinical trials set to begin on chemist-available, cannabis insomnia treatment
Mar 24, 2023
Mar 24, 2023 |
15 min
There have not been any CBD products approved yet for OTC sale in pharmacies - yet. However our sub-$10M capped cannabis Investment BOD Science (ASX:BOD) is keen to be first to enter the national market.
BOD’s big bet - will it pay off?
Sep 28, 2022
Sep 28, 2022 |
10 min
It’s been a rough ride so far with our BOD Investment. But we think this could be the bottom - and we are participating in the current rights issue at 8c.This offer is open to all existing BOD holders - the full details of the offer are here.
BOD: Aqua Phase Acquisition Complete
Aug 10, 2023
Aug 10, 2023 |
2 min
Our life sciences Investment, BOD Science (ASX: BOD), has officially announced the completion of its Aqua Phase acquisition.
BOD’s CBD product improves bioavailability by 311%
Jul 25, 2023
Jul 25, 2023 |
2 min
Today our early stage life sciences Investment BOD Science (ASX:BOD) announced the much anticipated results from its PK study on Aqua Phase CBD.
Phase IIB Insomnia Trial Complete
Jul 10, 2023
Jul 10, 2023 |
2 min
Our cannabis drug development company BOD Science (ASX:BOD) announced it had completed its Phase IIB insomnia trial on its CBD formulation, which was conducted by the Woolcock Institute of Medical Research.
BOD to expand into Malaysia?
Jun 21, 2023
Jun 21, 2023 |
2 min
Today, our cannabis Investment, BOD Science (ASX:BOD), announced what we think could prove to be an important step towards entering a new market in South East Asia.
BOD making progress with Aqua Phase tech
May 23, 2023
May 23, 2023 |
2 min
Today, our medicinal cannabis Investment, BOD Science (ASX:BOD) announced positive updates out of its Aqua Phase program.
Weed and gold, the unloved investment thematics
Oct 22, 2022
Oct 22, 2022 |
13 min
We have all seen when a new investment theme goes through an initial period of hype, the peak of inflated expectations and then the trough of disillusionment. Today we will look at how this hype cycles affects to investment themes we are closely watching for 2023: Weed and Gold
Tax loss selling over, market back in August?
Jul 2, 2022
Jul 2, 2022 |
19 min
Tax loss selling over, catalysts in, market back in August? A selection of 10 of the most beaten up stocks in our Portfolio in the last six months
Our Investment Approach, Energy Cold War, Ukraine, Supply Chain Crisis
Jan 22, 2022
Jan 22, 2022 |
17 min
With rising tensions in Eastern Europe, our macro analysis is pointing to one conclusion...the ‘Energy Transition’ is quickly turning into an ‘Energy Cold War.’
What have our portfolio companies been doing? (Part 2)
Nov 11, 2021
Nov 11, 2021 |
15 min
What have our portfolio companies been doing? (Part 2)
Managing a market crash - lessons from March 2020
Sep 25, 2021
Sep 25, 2021 |
14 min
Earlier this week the mainstream news had everyone worried that Evergrande’s default and its ripple effects in the global economy might be the start of another market crash.
