Peak Pharmaceuticals Inc. (OTC: PKPH), an emerging leader in the development of hemp-based products for both humans and animals, recently announced that it entered into a relationship with an FDA compliant cGMP state-of-the-art contract-manufacturing firm to meet the growing demand for its Canna-Pet™ product lineup by scaling up production capacity.
“The use of an established manufacturer offers the infrastructure to scale beyond our current capacity, enabling us to meet the growing demand for our popular Canna-Pet™ animal health products, as well as the cGMP required for us to provide true pharma grade products,” said Peak Pharmaceuticals President and CEO Dr. Soren Mogelsvang in a recent press release. “Furthermore, we plan to leverage this relationship to make our first pilot scale, cGMP-level, human products for testing and launch in the very near future.”
The contract-manufacturer specializes in nutraceutical and supplement production, enabling its customers to scale output with minimal risk and without capital intensive infrastructure. From a shareholder standpoint, these benefits translate to lower capital expenditure and greater capacity to cost-effectively increase revenue.
The news comes shortly after the company reported $161,363 in revenue during the fourth quarter of 2014, with an attractive 73% gross margin. With steady gross margins and stable expenses, the company could break even on the bottom line with sales of $4.37 million per year. It’s also worth noting that 70% of its SG&A last quarter was in the form of temporary equity compensation expenses.
The company’s long-term potential looks positive with the pet supply and OTC medication industries estimated to be $14 billion and $13.72 billion in size, respectively. By some estimates, nearly half of pet owners have considered or tried various alternative therapies to improve their pets’ lives. Canna-Pet™ falls squarely into these categories with its pioneering products.
Shares of Peak Pharmaceuticals Inc. were traded actively this week following the Company’s recent financial results.
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