Give PAO Group (OTC Pink: PAOG) investors credit for having patience. Also, credit them for understanding that the company's long-term prognosis is excellent, with several expected catalysts only a few weeks away. Each can be revenue-generating game-changers for PAOG.
Moreover, a recent uptick in volume and price indicates that new investors are getting into the action. And with PAOG's bullish update last month, it's hard to blame them. It brought into focus the value-proposition inherent to PAOG in the near and long term. While the longer-term scenario may provide exponentially better returns, its planned end-of-year catalysts could also deliver meaningful gains for its stock.
Hence, whichever an investor's time horizon, positioning ahead of at least two expected catalysts could be a wise decision. Here's what's happening.
CBD-Based Nutraceuticals Near Expected Launch
Foremost, PAOG is nearing the completion of the development of two valuable CBD-based assets. Both target substantial market opportunities. In fact, the combined potential exceeds a more than $16 billion opportunity for just its COPD and anxiety nutraceuticals alone. The better news is that PAOG believes its drugs can address additional indications that also present lucrative opportunities.
And with PAOG saying they are close to applying for regulatory approvals, their optimism could be replaced with product launches during the next two quarters. If it is, current share prices could surge exponentially.
Deservedly so, especially with markets pricing at forward-looking multiples. Updates have helped fuel the bullish sentiment. In June, PAOG reiterated that its first of two CBD Nutraceuticals is still on track to be marketed by the end of this year. And given that analysts expect the CBD nutraceuticals market to grow by more than 200% to $16.4 billion by 2027, PAOG is in the right sector at the right time. Better still, PAOG is in late-stage development processes, which could help position them as a leader to treat targeted indications.
Still, they have more than a product; they have the infrastructure in place to get these nutraceuticals to market. There, partnerships with Alkame Holdings, Inc. (ALKM) and North American Cannabis Holdings, Inc. (USMJ) could expedite the marketing processes, combining resources to develop, package, and distribute its CBD-based therapeutics into the markets.
Those products, by the way, could reach a market demand that is surging.
CBD RELAX-RX Is A Potential Billion-Dollar Asset
Although it was second into the clinic, its CBD RELAX-RX is expected to be its first nutraceutical product to market. That drug targets the multi-billion-dollar anxiety and depression treatment market. And it's a market continuing to increase in size and demand, supported by patients wanting an alternative treatment over existing pharmaceuticals. PAOG thinks CBD RELAX-RX could be an answer.
That's because the nutraceutical is specially formulated to provide a best-in-class treatment, utilizing a CBD extraction process that some say is comparable to GW Pharma's, which was sold to Jazz Pharmaceuticals (NASDAQ: JAZZ) for $7 billion last year. And it's that extraction process that could provide even more shareholder value from the IP side. More on that later.
Still, the opportunity gets bigger. While CBD RELAX-RX could become a revenue-generating game-changer for PAOG, it has a second shot on treatment goals that could prove equally lucrative.
That potential comes from RespRx, its second late-stage CBD-based therapeutic intended to help treat chronic obstructive pulmonary disease (COPD). Similar to the depression and anxiety treatment markets, this one also targets a multi-billion-dollar opportunity.
It also has investors and PAOG optimistic for success, stemming from the program leveraging data from studies conducted in 2015 that suggest CBD helps open the bronchial passages. Moreover, these studies show that the treatment could be effective and safe. Results showed the nutraceutical was well-tolerated and lacked the often severe side effects associated with current standards of care.
Even better, many experts believe that once a viable CBD-based alternative is available, it has an opportunity to seize on significant market demand. And that market opportunity is in PAOG's crosshairs.
Still, earning just a small share of that market would represent a massive stream of consistent revenues. Therefore, even second or third place still is a potentially billion-dollar asset – and PAOG is prepared to grab its share of the prize.
Keep in mind, PAOG also holds some IPs of its own. The company's CBD-based treatments are derived from a patented process of extracting cannabidiol - "METHOD AND APPARATUS FOR PROCESSING HERBACEOUS PLANT MATERIALS INCLUDING THE CANNABIS PLANT" (US Patent No. 9,199,960) that produces an extract said to rival the quality of one of the industry's pioneers, GW Pharma. This creates a substantial opportunity for PAOG to monetize the RespRX platform and extraction process through licensing agreements, thereby maximizing the value of that IP. The company could then utilize that money to fund the development of new products. Licensing may be able to play a substantial role in complementing those initiatives. Better still, its IP alone could become a cash cow for the company.
In short, PAOG is positioned for substantial growth. The best news...the rewards from its labor are expected to come soon. That bodes well for the company and its investors.
Watch For Catalysts In Q3 andQ4
Indeed, growth is on the table. And with at least two near-term catalysts in view, investors may be correct to anticipate a surge in value by year's end.
And with those announcements potentially being company game-changers, trading ahead of the news could be a wise consideration. After all, at less than a penny a share, the launch of either product could be a life-changing investment to some and a life-saving product to others. Thus, PAOG is setting up a win-win opportunity.
And finding an early investment opportunity in companies that succeed in meeting that mission usually delivers exponential returns. Hence, PAOG deserves to be in play.
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