The Life Sciences Report: Steve, you are a co-organizer of
the annual AlphaNorth Capital Conference, which is attended by about 40
small-cap companies and major investors. How do you select the companies you
invite?
Steve Palmer: We like to have some diversification among the
companies that are there. It's a non-resource conference. We didn't want it
to turn into a cannabis show or a crypto conference or anything like that. We
tried to select some of the better companies from each category and have a
wide variety at the conference. One of the key things I look for in an
investment is a company that has something that is proprietary and a strong
growth profile.
TLSR: Do you focus exclusively on Canadian equities?
SP: Mostly Canadian. There are several thousand junior Canadian
companies, so there are more than enough opportunities to pick from on the
Canadian side. We do have a couple U.S.-listed companies in the portfolios.
We don't go looking for companies in other countries, but if opportunities
are presented that make sense, we don't exclude those.
TLSR: Would you tell us about a couple of the companies that you're
really excited about?
SP: 3D Signatures Inc. (DXD:TSX.V; TDSGF:OTCQB; 3D0:FSE) is
one. It has a platform technology that looks at a component of a person's DNA
and is potentially able to predict the outcome of various medical treatments.
It just announced some results from a Hodgkin's lymphoma study.
It has also done work on prostate cancer, Alzheimer's, etc.
I think it's relatively low risk. On the previous work that it has done,
it has shown very strong results and predictive ability. It is currently
doing a much larger confirmatory trial in Hodgkin's lymphoma. I like the fact
that it's a platform. It has applications for various diseases and medical
conditions. The timeline to have a commercial product is much shorter than a
traditional biotech company developing a new drug.
TLSR: What is another company you like?
SP: Another one on the healthcare side is Antibe
Therapeutics Inc. (ATE:TSX.V; ATBPG:OTCQX), which is developing a pain
medication. It's doing a Phase 2 trial right now which will hopefully
demonstrate equivalent or better efficacy but with greatly reduced negative
side effects. The results are expected on that within several weeks.
I like 3D Signatures and Antibe because they each have a short-term
potential catalyst that we view as having relatively high odds of success.
The pain market is huge. There's a lot of talk in the press about opioid
use, etc. The existing drugs for osteoarthritis cause a high frequency of
stomach ulcers and other side effects such as high blood pressure. Antibe is
trying to show that its product has many fewer side effects but the same or
better efficacy.
The company also owns a subsidiary that sells products for bone grafts in
the dental area. Those products are expected to do roughly $10 million this
year in revenue. So it's good that it has a base business. It's not an
all-or-nothing-type situation like many biotech companies.
TLSR: Would you tell us about one more company?
SP: There's a company called ClearBlue Technologies Inc. that's
going public shortly. It recently had a very good response by investors at
our conference. It has products for what it calls smart off-grid solutions.
It uses solar and wind energy to manage things like streetlights and security
and broadcast Internet, etc. It has revenue, which is expected to more than
double in 2018 from around $4 million in 2017. it's a high-growth business.
It is the leader in the space. It has a huge sales funnel. I really like the
CEO, Miriam Tuerk. She used to be in a senior role at BCE Emergis. I'm pretty
excited about the prospects for that company.
The company is in the process of doing a reverse takeover. The shares
should be trading in March on the TSX Venture exchange.
TLSR: Thanks, Steve, for sharing these with us.
The AlphaNorth Capital Conference is one of seven annual conferences
produced by Vancouver-based Capital Event Management (CEM); the conference
mandate is to connect capital with opportunity. In addition to the AlphaNorth
Bahamas event, CEM conferences include stops in Whistler, BC; Scottsdale, AZ;
Montreal, QC; Kelowna, BC; Muskoka, ON and Palm Beach, FL. In each case
issuers from all sectors meet and establish relationships with top investors
in the field, leading to financings and after market support. Full details at
www.capitalevent.ca.
Steve Palmer is a founding partner, president
and chief investment officer of AlphaNorth Asset Management and currently
manages the award-winning AlphaNorth Partners Fund, AlphaNorth Growth Fund
and AlphaNorth Resource Fund. Prior to founding AlphaNorth in 2007, Palmer
was employed as vice president at one of the world's largest financial
institutions, where he managed equity assets of approximately CA$350M. Palmer
managed a pooled fund, which focused on Canadian small-capitalization
companies, from its inception to August 2007, achieving returns of 35.8%
annualized over a nine-year period, which ranked it No. 1 in performance by a
major fund ranking service in its small-cap, pooled-fund category. Palmer
earned a bachelor's degree in economics from the University of Western
Ontario and is a Chartered Financial Analyst.
