A young pharmaceutical company based in Laval, Que. is asking stock holders to be patient while waiting for Federal Drug Agency approval.
Acasti Pharma Inc. has recently released a quarterly financial statement which shows a net loss nearly $2 million. In comparison the company posted a $3 million profit for the previous year, roughly a 170 per cent drop. Acasti’s stock has correspondingly decreased steadily since the turn of the new year.
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According to John Ripplinger, Acasti’s director of investor relations, the company is showing a loss in part due funds raised in the previous year. Last year Acasti sold derivative warrants, a type of share, to increase their funds. Therefore last year’s profit was “not a gain in hard money” as Ripplinger put it, because they are not generating sales revenue.
While the young company had not primarily relied on sales to increase its profits, Acasti’s sales earnings have also decreased by about 80 per cent from last year. Ripplinger said that the decrease in revenue is due to the transfer of one of Acasti’s products to their parent company, Neptune Biotech. A recent press release from Neptune said that they had taken over marketing responsibilities of the drug Onemia. Ripplinger said that this was done primarily so Acasti could focus on a developing their new drug CaPre.
Ripplinger said that Acasit is a small team and is focusing on development rather than generating sales revenue. “Their focus right now is on CaPre.”
Patience seems to be the message to Acasti’s shareholders. Currently the company is waiting on FDA approval of CaPre, before being able to go to market in the United States. A recent Acasti press release said that Acasti has received positive feedback from the FDA, and are looking to proceed to clinical trials.
Kenneth Wong, a business professor from Queen’s University in Kingston, Ont. said that patience is a common practice for pharma companies. Investors in pharmaceutical companies are typically in for the long term, “The life cycle of an investment probably runs ten to 12 years of discovery, a couple of years of clinical trials and then god knows how many years of getting acceptance by prescribing physicians,” he said. “So you have to have pretty patient investors.”
However Acasti’s fortunes may also depend on the success of the new drug. Pharmaceutical business expert, Bohumir Pazderka, also of Queen’s University, said that a new drug will only be successful depending on if it preforms better than similar drugs. “If there’s not much new, there’s not much different” then the new drug may not be competitive on the market he said.
Ripplinger said that the company is not yet able to compare CaPre to other cardiovascular drugs to see if it produces better results. Ripplinger said that while they are allowed to compare CaPre to other FDA approved drugs, they will not be able to compare the benefits until the next stage of the FDA process. “It could be anytime between now and 18 months from now before that would start,” Ripplinger said, reaffirming Acasti’s patiently optimistic stance.