MGC blazes trail for London-listed cannabis companies

MGC Pharmaceuticals Ltd (LON: MXC) has become the first cannabis-related company to gain a Main Market listing following the clarification of the rules last year. The shares got off to a strong start.

The Australia-based biopharma company was already trading on ASX, following a reverse takeover in 2016, prior to the standard listing. One-fifth of the enlarged share capital was issued in the placing, which raised £6.5m at 1.475p a share. The costs of the flotation were £500,000. The market capitalisation was £32.9m.


In the year to June 2020, revenues were A$2.08m, while the loss was A$18.8m. Admittedly, there was a write-off of A$5.1m and a fair value loss on financial instruments of A$2.1m. Even so, gross profit was A$175,000 which barely covers any operating expenses.

MGC needs the cash it raised. The cash outflow from operations was nearly A$10m. MGC is setting up a lab in Malta and this will require investment.


There are operations in Australia, UK and EU. MGC is producing two main products: CannEpil and CogniCann. These are manufactured in Slovenia. Other products are being developed.

There are plans for a phase IIb study with CannEpil for patients with drug resistant epilepsy. This should start early in 2021 and will measure if there is a meaningful reduction in seizure frequency. The results should be available in the summer of 2022.

CogniCann is a potential treatment for dementia. A clinical trial should start soon and the results should be available later this summer.

There is also a deal with a pharma manufacturer that will produce a range of products under the Mercury Pharma brand. That will help to develop revenues.

The share price has soared to 3.88p. That values a company with revenues of barely more than £1m at £94m. There are products with potential for significant revenues but there will be a number of years before that happens and it is best to assume that more cash will need to be raised.