Hygrovest Ltd (ASX:HGV)’s net asset value (NAV) increased by 6% during July 2022, primarily due to the revaluation of its investment in Weed Me and Southern Cannabis Holdings.
Subsequent to the sale of HGV’s investment in Entourage Health Corp’s convertible debentures on 30 June 2022, HGV reduced its exposure to cannabis companies from 72% to 58% of the total portfolio including cash reserves to provide funds to transition its portfolio to a broader range of high-growth industries.
The company’s positive performance in July 2022 was also supported by gains in the listed Canadian and Australian cannabis sector and its positive impact on the valuation multiple applied to value HGV’s investments.
Portfolio developments
Valo Therapeutics Oy
In November 2021, HGV invested A$1 million in unlisted Valo Therapeutics Oy based in Finland which was part of pre-IPO equity financing of ~US$13 million to fund the finalisation of preparations and initiation of a Phase 1 clinical study of Valo Tx’s lead tumour antigen-coated oncolytic virus candidate, PeptiCRAd-1 in addition to the continued development of its anti-infectives platforms including PeptiBAC and PeptiVAX.
Valo Tx is an immunotherapy company that is developing antigen-coated oncolytic viruses and vaccine vectors as therapeutic vaccines against cancer and infectious diseases.
The company’s lead platform, PeptiCRAd (Peptide-coated Conditionally Replicating Adenovirus) was developed out of the laboratory of Professor Vincenzo Cerullo at the University of Helsinki.
It turns oncolytic adenoviruses into targeted, tissue-specific cancer vaccines without the need to develop and manufacture multiple genetically modified viruses.
In July 2022, Valo Tx advised its investors that it had completed a worldwide roadshow commencing in Finland with corporate and operational workshops.
A major biotech investment bank was engaged in Florida whose team specialises in the life science space, and C$4.95 million was deposited in an independent escrow agent's account from a cornerstone investor out of Geneva Switzerland.
Additional commitments were made to the company which will be processed over the next 4 to 8 weeks.
Despite significant progress being made on the operational front, delays to the commencement of the Phase-1 clinical trial have been caused by the late supply of data from 3rd party suppliers and further information and data requests from the regulatory authority that have required additional testing and analysis.
Given the delay of the Phase-1 trial commencement and the current heightened market volatility, ValoTx expects the listing will occur in Q4 2022 subject to market conditions.
Established in 2016, Weed Me is the largest unlisted Canadian licenced producer of cannabis products for the Canadian recreational market.
The Weed Me brand consists of a complete line of dried flower, pre-rolls, vapes, and gummies products, which have significant market shares in its key Canadian provincial markets.
Weed Me has successfully expanded its operations with net sales of C$22.7 million in the year ended 31 December 2021 (FY21) compared to FY20 net sales of C$6.9 million and was profitable in FY21.Sales growth continues with net sales of ~C$34 million in the twelve months ended 30 June 2022.
Continued strong product demand resulting in retail sales of $91.3 million of Weed Me branded products in the last 12 months.