Yesterday the Creso Pharma Ltd (ASX: CPH) share price was among the best performers on the local market with a 7% gain to 52 cents.
This brought its six-month return to a massive 121%.
Why did its shares jump?
On Monday morning the medicinal cannabis company announced that it signed an exclusive commercialisation agreement with global pharmaceutical animal health company Virbac.
The three-year agreement will see Virbac distribute Creso's first original hemp‐based complementary animal feed products for companion animals in Switzerland and Lichtenstein from September of this year.
According to the release, Creso has developed and will manufacture the products, but Virbac will launch, market, and promote the products to veterinarians and pet owners.
Furthermore, the launch in Switzerland is seen as a gateway to the world. As Switzerland is regarded as a regulatory and marketing reference country for many countries in Europe, Latin America and Asia Pacific, management believes a successful launch will enable expansion into additional international markets in 2018.
Should you invest?
Creso certainly has chosen well in my opinion. The global pharmaceutical animal health company has a presence in over 100 countries and most recently reported a turnover of €872 million in FY 2017. This makes it the seventh largest pharmaceutical veterinary company worldwide.
By having a company of this size and reach distribute its products, I feel that Creso has a good chance of generating strong sales of its Anibidiol product which addresses stress and behavioural problems, chronic pain, and age‐related ailments in ageing animals.
Overall, this is just one of a number of potential revenue streams the company has, which I believe puts it up there with fellow pot stocks Auscann Group Holdings Ltd (ASX: AC8) and Zelda Therapeutics Ltd (ASX: ZLD) as one of the better options in the industry.
However, it is a touch too soon for an investment for myself. But I'll certainly be watching on with a keen interest over the next 12 months.
