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Aequus Pharmaceuticals: Reaping The Rewards Of An Adapted Business Strategy


  • New record revenue of 535k CAD in Q4/2019 with a strong +44% growth compared to previous quarter Q3/2019 (370k CAD).
  • Positive manufacturing audit at Medicom, submission for approval with Health Canada (30 days review, OTC) for Evolve product line once audit certificate is available; market entry expected in August 2020.
  • Positive dispensing formulary decision in Q4/2019 for British Columbia for Aequus' Tacrolimus product to be the mandatory product for organ rejection patients requiring Tacrolimus.
  • Awaiting reimbursement decision for Vistitan in Quebec and British Columbia, covering 36% of the 55Mio CAD bimatoprost market in Canada.
  • Aequus and Medicom to jointly expand to large US ophthalmology market, starting in 2020 with Evolve.

Aequus Pharmaceuticals (OTCQB:AQSZF) is a growing specialty pharmaceutical company with an increasing pipeline of commercial products in ophthalmology and transplant, and a development stage pipeline in neurology and psychiatry. In today's article I will follow-up on my latest article from 29th August 2019 and will summarize the progress in order to verify the investment opportunity.

Recap of Investment Opportunity

My thesis of the investment opportunity is based on projected revenue growth coming from already marketed products and new in-licensed products, creating an opportunity to reach breakeven in 2020. Considering the very small market-cap of currently around 10Mio CAD, it generates a significant upside opportunity for the share price if events and revenue materialize as projected. At the same time, I'd like to stress the point that we are talking about a penny stock in the nano-cap range. There are significant risks associated with investments into such companies and standard investors may not be willing to accept this level of risk.

Pipeline - Source: Aequus webpage

In August 2019, the breakeven projection for 2020 faced some question marks due to products not progressing as anticipated by the company (Topiramate XR, Zepto, Evolve). Meanwhile, more information around the lack of progress has been shared and Aequus adapted their business strategy. The share price has not taken these facts well and showed an all-time low of 0.065 CAD during the global market's COVID-19 crash on 20th Mar 2020.

On the other hand, during the past months Aequus also communicated some very positive surprises that will and partly already have been driving some promising revenue growth. In my opinion, Aequus has taken some good decisions regarding their business strategy and there are promising facts that give me confidence of seeing a breakeven in 2020 for real.

I will discuss all the outlined points in

This article was written by

Focused for several years on micro-caps and small-caps, mostly in the biotech sector, occasionally looking into other sectors like fintech or technology. While being in the high risk space, you need to be willing to take risks. Key to success is to find Smart Risks worth to be taken.

Analyst’s Disclosure: I am/we are long AQSZF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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