Medical company InterCure Ltd. (TASE: INCR-L) announced last June its intention of entering the medical cannabis field by investing in Canndoc, which markets cannabis in Israel. InterCure's share price has continued its surge following the completion of the company's full acquisition of Canndoc.
InterCure's share price jumped 2% today, boosting its market cap to NIS 174 million. Since last June, when its decision to invest in Canndoc was first announced, InterCure's share price has soared 520%, including 120% in the past week, after InterCure announced its intention of acquiring full ownership of Canndoc.
InterCure's situation is interesting because it was not a company with little or no activity before the investment; it had a portfolio of investments in promising medical companies that were not young companies, such as a 9.3% stake in NovellusDx, which works in cancer diagnosis, and a 17.2% stake in Regenera Pharma, which tries to prevent nerve degeneration in treatment of first-stage blindness, and possible afterwards for treatment of degenerative brain diseases. The company's holdings before its entry into the cannabis field, however, were priced at only NIS 28 million.
InterCure's CEO is Asher Zamir, its chairperson is Shlomo Shalev, and its controlling shareholder is medical investor Alex Rabinovich. Investors in InterCure before it entered the cannabis field and before its share price soared include Altshuler Shaham (mutual funds) (10.1%) and Mordechai Ben-Shach (6.8%).
Altshuler Shaham invested in InterCure at NIS 0.56 per share, which means that the current return on its investment is 300%, After InterCure announced its intention of buying shares in Canndoc, Altshuler Shaham slightly increased its holding.
Canndoc is one of the few cannabis companies connected to companies listed on the Tel Aviv Stock Exchange (TASE) that already has substantial cannabis marketing activity. Canndoc is one of the first eight growers to receive a license to market cannabis directly to the consumer a decade ago, before the cannabis reform instituted last April, under which the other cannabis companies listed on the TASE (or seeking a merger with a TASE-listed company) are planning to enter the market.
Canndoc is not yet selling its products in pharmacies; it sells directly to consumers through distribution stations, the same method it used before the reform and which will still be allowed for the same eight growers for a period of legislative overlap.
InterCure acquired the first half of Canndoc's shares for NIS 8.2 million and completed its full acquisition for 9% of the shares in the new InterCure, which will now be held by the owners of Canndoc.
Published by Globes [online], Israel business news - www.globes-online.com - on September 4, 2018
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