Aegis Capital Corp released a report covering the clinical-stage biotechnology company, SciSparc (SPRC).
If you want the short version- it is a target price of $20 a share, following recent updates, Nasdaq uplisting and discuss of an attractive setup.
Background:
SPRC recently uplisted to Nasdaq for OTC Markets. The current market cap is approx. $14 million with 2.3 million outstanding shares.
Summary and updates according to Aegis: SciSparc is a clinical-stage biotechnology company developing cannabinoid-based therapeutics. The company’s lead asset, SCI-110 (synthetic THC + palmitoylethanolamide (PEA)), is being developed for Tourette syndrome (TS) (phase 2b) and Alzheimer’s disease (AD) and agitation (phase 2a). Additionally, SciSparc is developing SCI–210 (CBD + PEA) for status epilepticus and autism spectrum disorder, and SCI-160 (a synthetic CB2 receptor agonist) for pain. The company’s achievements in 2021 included preparing to enter mid-stage studies with SCI-110, publishing key data underpinning the efficacy of its programs, garnering additional IP protection, bolstering the balance sheet with successful capital markets activities, and uplisting to the Nasdaq exchange.
Clinical studies: SciSparc has prepared SCI-110 for a phase 2b study in TS, including arranging Dr. Kirsten Mueller-Vahl from Hanover Medical School as the study lead, engaging a contract research organization (CRO), and establishing the supply chain for drug manufacture. Additionally, SCI-110 has been prepared to enter a phase 2a study in AD and agitation, including receiving approval from the Israeli Ministry of Health (MOH) and Helsinki Committee, and engaging The Israeli Medical Center for Alzheimer’s to conduct the study. In 2021, SciSparc made progress on its earlier-stage assets as well, including entering an agreement with The Sheba Fund for Health Services and Research, to perform a preclinical study for SCI-210 and announcing positive topline results in a controlled preclinical trial on neuropathic and post-operative pain for SCI-160.
Cannabinoid-based therapeutics: The cannabinoid therapeutics class is still in the early innings, as we see it. The $7.2bn acquisition of GW Pharmaceuticals by Jazz Pharmaceuticals (JAZZ; NR) offers an attractive precedent, on the back of meaningful revenue creation from the therapeutic use of cannabinoids. GW Pharma’s Epidiolex, indicated for the treatment of seizures associated with certain rare diseases, produced over $510mm of revenue in 2020, a strong indicator of the revenue potential in this emerging class.
SciSparc has constructed an attractive pipeline of therapeutics leveraging the “entourage effect,” predicated on the synergy displayed among cannabinoids and other substances when co-administered. A study of SCI-110 in TS patients, conducted at the Department of Psychiatry and the Child Study Center at Yale University, demonstrated improvement in tic symptoms that was statistically significant within 1 week of starting treatment compared with baseline. Treatment with SCI-110 led to an average improvement in tic symptoms of more than 20%, or a 7-point decrease in the YGTSS score. In our view, SciSparc represents a compelling opportunity for investors given the strong phase 2 data in SCI-110 generated at Yale, multiple upcoming catalysts expected, and the appealing valuation which is disconnected, in our view, from the intrinsic value of the pipeline.
