The market may have sunk lower on Thursday, but that hasn't stopped the MGC Pharmaceuticals Ltd (ASX: MXC) share price from rocketing higher.
In morning trade the cannabis company's shares are up 27.5% to 6.5 cents.
Why are MGC Pharmaceuticals' shares rocketing higher?
This morning the company's shares returned from a trading halt after announcing the receipt of formal authorisation for the availability of its product CannEpil for supply in Australia through specialist prescribers under the Authorised Prescriber Scheme.
CannEpil is CBD-based medication that is used as a treatment for people with refractory epilepsy.
Management believes that this formal authorisation is a major milestone representing the company's progress towards becoming a world-leading bio-pharma company.
It also signals the start of commercial-scale production of CannEpil at its GMP certified facility in Slovenia and puts the company on the verge of revenue generation from its core pharma activity.
The first batch of the CannEpil product is expected to be available for sale in Australia by December and will be distributed by specialist Australian pharmaceutical distributor, HL Pharma.
It isn't just the company that is pleased with this development. The chief executive officer of Epilepsy Action Australia, Carol Ireland, is equally pleased.
She stated that: "This is a significant milestone for epilepsy patients and other patient communities. It is another important step in improving access to potentially life-changing medications, and part of a global trend to recognize the valid medical benefits of cannabis."
Should you invest?
This is undoubtedly a big positive for the company. Especially given its recent appointment of Assoc. Professor Wendyl D'Souza to the MGC Pharmaceuticals Medical Advisory board.
Mr D'Souza is an authorised prescriber of medicinal cannabis and has over 3,000 registered patients with drug resistant epilepsy from currently available anti-epilepsy medications.
If CannEpil can be successfully used to treat these patients then it could lead to solid sales growth and give it the edge over industry peers Althea Group (ASX: AGH), AusCann Group Holdings Ltd (ASX: AC8), and Cann Group Ltd (ASX: CAN).
However, it is early days and there are no guarantees that CannEpil will be a success. Because of this, I would suggest investors sit tight and wait to see how things progress over the next 12 months.
