The Zelira Therapeutics Ltd (ASX: ZLD) share price is breaking new records today. This comes after the company announced a new licencing agreement with Alternative Solutions LLC.

Alternative Solutions is a licenced grower, manufacturer and distributor of medical cannabis products in the District of Columbia (Washington DC), United States.

During late morning trade, the Zelira share price hit an all-time high of 14 cents. However, its shares have since pulled back slightly, up 16% to 12 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is edging 0.4% higher to 6,911 points.

What did Zelira announce?

According to the release, Zelira advised it has entered an exclusive licencing deal with Alternative Solutions to expand market presence for its HOPE products.

Under the terms of the agreement, Alternative Solutions will manufacture and distribute HOPE products in Washington DC. The expanded medical cannabis market will see sales begin in the second quarter of 2021.

In return, Zelira will receive an upfront fee and ongoing royalties from product sales within Washington DC. The company did not provide any further details regarding the financial aspects of the contract.

Currently, Washington DC has an agreement with 32 other states within the country for approved medical cannabis programs. The mutual exchange allows patients who are registered in the authorised states to legally buy medical cannabis in Washington DC.

In addition, Zelira holds a licencing agreement with Ilera Healthcare LLC and Advanced Biomedics LLC for Pennsylvania, and Louisiana, respectively.

Management commentary

Zelira managing director and CEO Dr Oludare Odumosu commented on the licencing agreement:

Our partnership with Alternative Solution, a leader in the Washington DC market, is a strategic move in line with our mission of working with market leaders in approved markets to expand access to HOPE across the USA. We are particularly excited about this partnership because Washington DC is a gateway state with over 24 million visitors passing though the US capital in a year. Washington DC’s reciprocity is a strategic move that allows approved patients from 32 states to legally access HOPE in DC.

Alternative Solutions CEO Mr Matt Lawson-Baker added:

Alternative Solutions is thrilled to be partnering with Zelira to bring the HOPE product line to the Washington DC medical cannabis market. Providing access to this medicine in the Nation’s capital will give many families and patients the treatment they deserve through a legal regulated medical cannabis program.

About the Zelira share price

The Zelira share price has performed strongly over the year, gaining more than 500% for patient shareholders. At the time of writing, Zelira shares are up by 16.16%, giving the company a market capitalisation of $117 million.

More reading

• Why the Botanix (ASX:BOT) share price is soaring up today
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• Hydrix (ASX:HYD) share price falling despite positive AGM update
• Vulcan (ASX:VUL) share price rises 20% and breaks new record. Here’s why.
• Why ‘ASX dividend king’ Soul Patts (ASX:SOL) is a top income share for 2021

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy.

The good news is that brokers across the country are doing a lot of the hard work for you.

Three top shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating but slashed their price target on this artificial intelligence solutions company’s shares to $32.60. This follows the company’s guidance downgrade last week after its largest clients switched their focus to other projects because of COVID-19. While this was disappointing and ended its earnings upgrades streak, Citi remains positive on the company. It believes it is well-placed to benefit from the higher spending on artificial intelligence and has opportunities to expand its addressable market. The Appen share price is trading at $25.38 this afternoon.

BHP Group Ltd (ASX: BHP)

Analysts at Ord Minnett have retained their buy rating and lifted their price target on this mining giant’s shares to $50.00. The broker made the move after increasing its iron ore price forecasts notably higher due to current supply constraints and strong demand from China. This is expected to lead to stronger than expected free cash flow for BHP in the near term. In light of this, it is forecasting a ~$2.39 dividend in FY 2021. Based on the current BHP share price of $42.64, this represents a fully franked 5.6% dividend yield.

Wesfarmers Ltd (ASX: WES)

A note out of Credit Suisse reveals that its analysts have retained their outperform rating and lifted the price target on this conglomerate’s shares to $55.83. The broker has been looking at the household goods sector and believes the market is underestimating the boost to spending in this area due to more working from home. This has led to Credit Suisse lifting its sales forecasts for the Bunnings and Officeworks businesses. The Wesfarmers share price is fetching $51.03 on Monday.

More reading

• These are 10 of the best performing ASX tech shares of 2020 so far
• 2 of the best ASX tech shares to buy and hold
• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• Top brokers name 3 ASX shares to buy next week
• Westpac (ASX:WBC) tips Australian dollar to hit 80 US cents in 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pilbara Minerals Ltd (ASX: PLS) share price remains in a trading halt at $0.88 per share today after the company announced a $240 million equity raising to support a large acquisition.

Why is the Pilbara Minerals share price in a trading halt?

All eyes are on Pilbara Minerals after the ASX 200 miner entered a trading halt on Friday.

The company has received creditor approval to raise capital for its planned US$175 million acquisition of Altura Project. Pilbara Minerals recently entered into a share sale agreement with Altura Mining Limited and its administrators to acquire all shares of Altura Lithium Operations Pty Ltd (ALO).

Pilbara’s deed of company arrangement (DOCA) received ALO creditors approval with all parties signing off. That has cleared the way for Pilbara Minerals to acquire the neighbouring site for US$175 million.

The acquisition is contingent on Pilbara raising A$240 million in equity to support the transaction. That has put the Pilbara Minerals share price in a trading halt ahead of the planned equity raising.

The $240 million comprises a $119 million placement to Australian Super and Resource Capital Fund VII L.P. alongside a $121 million accelerated non-renounceable entitlement offer.

Pilbara’s 1-for-7.6 fully underwritten offer will see the miner issue 337 million new shares. The group has proposed price of A$0.36 per new share as part of the equity raise.

What is the Altura Project?

The Altura Project produces hard rock spodumene concentrate next to Pilbara Minerals’ existing Lithium-Tantalum Project. The operation produced 181,263 wet metric tonnes of spodumene concentrate in the year ended 30 June 2020.

Pilbara believes the acquisition will enhance its scale and provide tangible synergies of A$18 million to A$27 million per year. On top of that, management is hoping for greater flexibility, speed to market and increased market relevance.

The Pilbara Minerals share price has rocketed 183.9% in 2020 and boasts a market capitalisation of $1.95 billion.

More reading

• Are ASX lithium shares a hot commodity right now?
• Why the PIlbara Minerals (ASX:PLS) share price is charging higher
• The 13 ASX shares that could have doubled your money in 2020
• Are ASX lithium shares making a comeback?

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Access Innovation Holdings Ltd (ASX: AIM) aka Ai-Media share price is surging higher today after the company announced two new acquisitions in the United States. The company also released a full investor briefing on the news. 

At the time of writing, the Ai-Media share price is trading up 3.59% at $1.01.

Ai-Media provides live and recorded captioning, transcription and translation services. Its technology combines artificial intelligence (AI) and human expertise to deliver speech-to-text as accurately as possible.

Right now, Ai-Media is the biggest captioning provider in the Australian market and has a growing international presence, capturing more than 1 million minutes of live and recorded media every month.

Details of the acquisitions

The company’s new acquisitions – Caption IT and CaptionAccess – are strategic within the US market.

Caption IT is based in Wisconsin and offers real-time, offline and post-production captioning, transcription and translation services. The company generates most of it’s revenue from corporate customers. White label product sold via resellers in the technology space are a large part of this revenue. 

CaptionAccess is based in Illinois and is owned and managed by people who are deaf and hard of hearing. It provides communication services to the government, corporate and education sectors. Revenue comes mainly from enterprise customers in these sectors and particularly in the university space, where it has 23 clients.

Key terms

The key terms of the acquisition agreements include the following points:

• Total purchase consideration for the acquisitions, on a cash and debt free basis, is US$1.9 million comprising approximately US$1.6 million in cash and US$0.3 million in AIM shares with the number of AIM shares issued to be determined based on the 30-day VWAP to 11 December 2020 (consideration shares).
• The consideration shares will be subject to the three-year escrow agreement applying to board and senior management, as set out in the Ai-Media prospectus.
• 10% of the total purchase consideration will be retained in escrow for a 12-month period to cover any breaches of representations and warranties. There are no earnout amounts associated with the acquisitions.
• The acquisitions are expected to be completed on 4 January 2021 and will be funded by existing cash reserves.

Rationale behind the acquisitions

The rational behind this move was to grow revenue and expand the company’s presence in North America.  Together, the acquisitions represent complementary additions to Ai-Media and help to achieve a number of goals for the company. Caption IT has a “top tier” corporate customer base and CaptionAccess is well positioned to service the education space. 

These two companies will directly help Ai-Media to expand its high-quality live captioning services in the US market. According to Ai-Media, the US is a fast growing market for these services and one that is directly in their target zone. The acquisitions are consistent with strategic goals to pursue consolidation opportunities that can complement the existing technology platform.

Ai-Media technology will help to leverage the already strong growth recorded by these new companies.

Earlier this year, Ai-Media completed another acquisition of Alternative Communication Services (ASC) to further enhance the US footprint. These latest acquisitions continue the expansion efforts.

Caption IT and CaptionAccess are expected to produce revenue of around US$2.2 million this calendar year. This is to be added to AI-Media’s revenue for six months of FY21.

This revenue increase is incremental to the current revenue produced by Ai-Media, which will account for more than 95% of the total, even after this acquisition. It’s complementary, but not majorly altering of the bottom line. AI-Media is expected to report around A$43.8 million in FY21. As this is incremental revenue, it’s not yet known what kind of long term affect it might have on the AI-Media share price. 

Management commentary

Ai-Media CEO and co-founder Tony Abrahams said North America now made up around 50% of the company’s total revenue.

Both CaptionAccess and Caption IT have been built on foundations of high-quality service delivery to loyal enterprise customers with values and cultures that are strongly aligned with Ai-Media.

Following our successful integration of ACS in North America in recent months, I am excited that Ai-Media can provide the infrastructure and scalable technology platform to enable these great businesses to continue to accelerate their growth in the years ahead.

We continue to see strong demand for Ai-Media’s services across all regions, in particular in live enterprise where COVID-19 restrictions have accelerated the adoption of video as a key communication tool for business and the education sector.

Caption IT Founder and CEO Maureen DeRuyter added:

Following years of strong growth with top tier enterprise customers, we knew we needed to partner with a great technology business to provide the scale to continue to grow. Ai-Media’s demonstrated success with the recent ACS acquisition has given us enormous confidence to further enhance the excellence in service and quality that Caption IT is known for.

CaptionAccess founder and CEO Bill Graham said:

As a proud deaf business owner with Disability Owned Business Enterprise (DOBE) Certification, it was important for me to partner with a business that shares our community roots and our values, as well as focusing on delivering the highest quality services to our customers who rely on us to participate equally in education and at work.

Ai-Media share price

The Ai-Media share price has been on a downward slope since listing on the ASX in September this year. Shares listed at $1.23 and have slipped as low as $0.95 before rallying today. 

More reading

• Up 109% in 2020: Is it too late to buy Mineral Resources (ASX:MIN) shares?
• ASX retail shares in the spotlight: Cashed up consumers unfazed by “uneven and bumpy” rebound
• Crown Resorts’ (ASX:CWN) woes continue on latest lawsuit
• Why Emerge Gaming, Flight Centre, Medical Dev International, & Tyro shares are dropping lower
• Why the Botanix (ASX:BOT) share price is soaring up today

Motley Fool contributor glennleese has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Mineral Resources Limited (ASX: MIN) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO) this year.

Since the start of the year, the mining and mining services company’s shares have more than doubled in value and are up 109%.

Is it too late to invest?

According to a note out of Goldman Sachs, its analysts believe that all the good news is factored into the Mineral Resources share price and it is now fully valued.

This morning the broker retained its neutral rating but lifted its price target by a massive 30% to $34.50.

This compares to the current Mineral Resources share price of $34.56.

What did Goldman Sachs say?

The Goldman Sachs commodities team has just upgraded their forecasts for a number of metals.

It has lifted its iron ore price forecasts by ~30% to US$120 and US$95 per tonne for 2021 and 2022, its long-run forecasts for lithium spodumene by 7% to US$570 per tonne, and lithium hydroxide by 18% to US$13,000 per tonne.

The latter two upgrades are due to an improving supply/demand outlook and higher implied industry utilisation rates. This is being driven by an upward revision to the broker’s global auto team’s electric vehicle adoption and sales assumptions.

Given Mineral Resources’ exposure to both iron ore and lithium, these upgrades have had a major impact on Goldman Sachs’ earnings estimates.

It commented: “The iron ore and lithium forecast changes have driven a significant uplift to earnings and valuation for MIN. Our 12-mth TP is up +30% to A$34.5/sh, with FY21/22/23 EBITDA up +35%/+53%/+32%.”

However, given its strong share price rise, the broker is holding firm with its neutral rating for the time being. Though, it has acknowledged that a strong iron ore price could make it change its mind.

“MIN appears fully valued, trading at 1.19xNAV (US$62/t long-run Fe) and pricing in US$75/t long-run Fe, and we retain our Neutral rating. However with ongoing iron ore price strength, we see likely consensus earnings upgrades over the next few quarters based on the significant operating leverage in MIN’s iron ore business.”

“If spot iron ore and FX (US$150/t, 75c AUDUSD) held for the remainder of FY21, our EBITDA and EPS forecasts would be +16%/+21% respectively to A$1,942mn/A602cps, and MIN would generate an additional c. A$200mn in free cash flow above our base case,” it concluded.

This might be one for investors to keep a close eye on.

More reading

• Quarterly rebalance: Afterpay (ASX:APT) added to ASX 20, Kogan (ASX:KGN) joins the ASX 200
• Strong growth potential for Mineral Resources (ASX:MIN) share price: fundie
• Top ASX shares making record all-time highs
• The sector that’ll explode in February: fundie
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Australia’s great economic rebound is coming.

In fact, it’s already underway.

But don’t expect smooth sailing.

Not for the economy. And not for the S&P/ASX 200 Index (ASX: XJO).

But that doesn’t mean there won’t be great ASX investment opportunities in 2021.

Keep your eyes on the horizon

If you’ve spent any time out at sea, you’ll know one of the best ways to avoid seasickness is to keep your eyes on the horizon. That’s because the swells will move the boat you’re on, but the horizon stays constant. And our brains are wired to appreciate that sense of consistency.

If you’re a long-term investor, the horizon is your goal. And you’re better off ignoring the daily and weekly ups and downs the share markets will throw your way.

Ronald Temple is the head of US Equity at Lazard Asset Management.

Envisioning a choppy transition period over the next 6 months as developed nations begin to shift out of the pandemic investment environment that’s dominated so much of 2020, Temple recommends investors take that long-term view.

He adds that investors should focus “on bottom-up fundamentals for each individual security, while also avoiding the instinct to move too far out on the risk curve.”

Temple points to two major forces in a sort of tug of war with share prices, one pushing them higher the other lower:

On the positive side, the US election has passed with a market-friendly outcome and three COVID-19 vaccines appear to be within weeks of initial distribution, with more likely to follow. Typically, these events would be the signal investors need to shift out of defensive work-from-home beneficiaries into cyclical recovery plays.

However, major developed countries across the Northern Hemisphere are facing new record levels of COVID-19 infections, spurring new economic lockdowns and increasing the risk that many companies, particularly small businesses, might not make it to the other side of this pandemic.

Investors face a timing conundrum, indicating yet again that it is likely to be darkest before the dawn.

In Australia, that dawn looks closer than it does for most of Europe and the Americas.

Consumers ready to do the heavy lifting

Australia, alongside a handful of other nations like New Zealand, has been exceptionally successful at squashing the coronavirus spread.

While those efforts saved thousands of lives and many more illnesses, the months of severe lockdowns, particularly in Victoria, delivered plenty of economic pain.

But, provided Australia manages to keep the virus in check until vaccines are widely distributed, that pain could fade faster than hoped heading into 2021.

Shane Oliver is the head of investment strategy and chief economist at AMP Capital. He expects Australia’s economy will see another quarter of solid recovery to end the year. However, with Europe and the US struggling with record infection rates, their economies are likely to slow or contract with renewed lockdown measures.

Addressing the Federal Government’s Mid-Year Economic and Fiscal Outlook, due out later this week, Oliver says (quoted by the Australian Financial Review):

[Australia is] likely to see an upgrade to the growth outlook and a downgrade to the budget deficit projections reflecting stronger revenue flows and slightly less emergency spending than expected in the Budget… All things being equal this is relatively positive for the Australian share market and the Australian dollar.

Australia’s economic recovery into 2021 may be “uneven and bumpy”, as RBA governor Philip Lowe cautioned earlier this month, but consumers don’t seem bothered.

Consumer confidence in December is at 10-year highs, having climbed 4-months in a row.

Household savings levels are also at multi-year highs. And there’s plenty of pent-up demand from consumers who haven’t been able to spend on travel, dining out, or indeed shop in many brick-and-mortar locations.

With that in mind, the final weeks of December are expected to see a surge in retail spending.

According to Bloomberg:

The average Australian is expected to spend A$893 ($675) on Christmas this year for a cumulative total of A$17.3 billion, according to a late November survey by Finder.com – a comparison website — with greater spending on gifts than the 2019 survey signaled…

Analysis from economists at National Australia Bank Ltd, using their Cashless Retail Sales Index, suggests that national retail sales rose 3% in November from the previous month.

ASX 200 retailers cheer on the reopening

The reopening in Australia and New Zealand is welcome news to everyone. But few will be cheering louder than the owners and operators of some these nations’ largest shopping centres.

Like Scentre Group‘s (ASX: SCG) shareholders.

The retail property group owns and operates Westfield shopping malls across Australia and New Zealand. So, when the viral lockdowns saw shoppers forced to stay at home, Scentre’s share price collapsed.

From 12 February through to 24 March, Scentre Group’s share price dropped 63%. Since that low it’s rebounded 94%, leaving shares down 28% year-to-date.

In intraday trading today, Scentre’s share price is edging higher, up 0.2% at the time of writing.

More reading

• Top brokers name 3 ASX shares to sell today
• Which ASX 200 sectors performed the best in November? 
• Aussie companies blast ‘knee-jerk’ COVID-19 border closures

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The problems for casino operator Crown Resorts Ltd (ASX: CWN) continue to mount. This comes after it was reported that a class action lawsuit has been launched by a group of Crown shareholders who are alleging “misleading and deceptive” conduct by the company.

At the time of writing, the Crown share price has edged just over 1% higher to $9.82 despite the news report.

More about the lawsuit

The class action lawsuit has been launched by law firm Maurice Blackburn on behalf of a group of Crown investors.

The law firm is pushing for compensation for shareholders who lost money as the Crown share price fell in the wake of a series of revelations.

The Crown share price has fallen by over 18% this year with $500 million of market value being lost on 19 October alone. This occurred when it was revealed the casino was being investigated for potentially breaching money laundering laws.

The latest lawsuit claims that Crown engaged in misleading or deceptive conduct from December 2014 through to October 2020, telling investors it had effective controls in place to comply with anti-money laundering (AML) laws. This is despite the company conducting its affairs “contrary to the interest of members” in the period, according to the claim.

In a novel legal approach, the claim has asked the court to order Crown to buy back shares from affected investors at “fair value.”

Other problems facing Crown

This is not the first class action lawsuit made against Crown by legal firm Maurice Blackburn. Earlier this year, the law firm also launched a $1.3 billion lawsuit on behalf of Crown shareholders.

That lawsuit claimed the Crown share price dove by 14% in October 2016 after it was revealed 19 Crown employees were arrested and charged with gambling-related crimes in China.

The casino operator is also currently facing an inquiry by the New South Wales Government following an investigation by Austrac, which revealed the casino had paid illegal junket operators to attract high rollers from mainland China. Austrac is the Australian government intelligence agency set up to monitor money laundering, organised crime, and fraud.

That inquiry is ongoing, and will decide whether the company is fit to hold a license in NSW. The opening of Crown’s Sydney casino has also been delayed until February 2021, pending the outcome of the inquiry.

Last Friday, Austrac released its risk assessment of junkets operating in Australia’s gaming sector. The assessment reported that junkets posed a high level of criminal risk and harm to the community.

How has the Crown share price performed in 2020?

The Crown share price has fallen by 18.3% in 2020. Crown shares began the year at $12.02 before dropping to around $6 in March, as COVID-19 lockdown restrictions forced the closure of the company’s venues. The Crown share price has since recovered to today’s levels, but is still a long way off its 52-week high of $12.71.

The company currently commands a market capitalisation of around $6.6 billion.

More reading

• Crown Resorts (ASX:CWN) share price falls as Austrac calls junkets high risk
• Here’s why the Crown (ASX:CWN) share price is pushing higher today
• Crown Resorts (ASX:CWN) share price is up 6% despite Fitch downgrade
• ASX 200 rises again on Monday
• Why the Crown (ASX:CWN) share price is dropping lower again today

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 0.5% to 6,677.4 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

Emerge Gaming Ltd (ASX: EM1)

The Emerge Gaming share price is down 9% to 9 cents. Investors have been selling the eSports and gaming company’s shares after it provided another subscriber update for its MIGGSTER platform. Emerge Gaming has now surpassed 50,000 paid subscribers, with the majority on annual plans. However, this still represents only a fraction of the 6 million+ pre-registrations the company received.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 4% to $16.14. A number of travel shares have come under pressure today, possibly due to profit taking after some strong gains recently. Also weighing on Flight Centre’s shares is news that it has been dumped out of the ASX 100 index at the quarterly rebalance.

Medical Developments International Ltd (ASX: MVP)

The Medical Developments International share price is down 7% to $6.60. This decline has been driven by the completion of a capital raising. The healthcare company has raised approximately $25 million via a placement to new and existing investors in Australia and internationally. It raised the funds at an 8.5% discount to its last close price of $6.50 per new share. The proceeds will be used to support the commercialisation of its Penthrox product in Europe.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price has fallen 4% to $3.31. This morning the payments company released a trading update which revealed that transaction volumes are up 18% month to date on a same day on day basis. While this is solid growth, it is still trailing its pre-COVID growth rates.

More reading

• ASX 200 up 0.55%: Altium update, Afterpay jumps, NAB given ACCC approval
• The Emerge Gaming (ASX:EM1) share price is on a rollercoaster ride today
• Why the Medical Developments International (ASX:MVP) share price is sinking lower
• These are the 10 most shorted shares on the ASX
• Quarterly rebalance: Afterpay (ASX:APT) added to ASX 20, Kogan (ASX:KGN) joins the ASX 200

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Medical Developments International Limited and Tyro Payments. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and Medical Developments International Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Botanix Pharmaceuticals Ltd (ASX: BOT) share price is trading higher today on news the company has completed its phase 2a clinical study for BTX 1801.

In mid-morning trade, the Botanix share price was up 8% to 13.5 cents. It has since retreated to 13 cents, up 4% at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is currently up 0.4% to 6,915 points.

Botanix is a synthetic cannabinoid pharmaceutical company that focuses on dermatology and antimicrobial products. The BTX 1801 gel prevents surgical site infections by killing bacteria during surgery incisions. Botanix aims to combat the growing global antibiotic resistance that affects millions each year.

What’s driving the Botanix share price higher?

The Botanix share price is on the move after the company advised that all 60 of its participants have completed the BTX 1801 phase 2a clinical study. The purpose of the trial was to evaluate the safety, tolerability and efficiency of BTX 1801 for the prevention of surgical site infections.

As the data is being collated, the company plans to update the market with its report in early 2021.

Furthermore, the results will be used to support a fast-track designation and new drug application with the United States Food and Drug Administration (FDA).

Timeline of BTX 1801

In April this year, Botanix received a major boost from the FDA’s Office of Antimicrobial Products. BTX 1801 was awarded with a qualified infectious disease product status. This allows a five-year regulatory exclusivity, meaning generic products cannot enter the market. Furthermore, the company was given priority FDA review and faster two-way communication.

Last month, Botanix completed a pre-investigational new drug (IND) meeting with the FDA. The productive appointment gave the company an opportunity to seek advice and clarification on what’s required to initiate clinical studies.

In addition, the company received feedback on the drug development plan for BTX 1801 to fast-track its FDA process.

Management commentary

Commenting on the BTX 1801 progress, Botanix president and executive chair Vince Ippolito said:

There has not been a new class of antibiotic for the treatment of gram-positive bacteria in more than 30 years and serious staph and MRSA infections have become very difficult to treat.

The company has worked diligently to complete the BTX 1801 Phase 2a study despite the significant disruption caused by the COVID-19 pandemic by conducting the study in Western Australia.

About the Botanix share price 

The Botanix share price has been surging higher since COVID-19 stormed the world earlier this year. From a low of 2.3 cents in March, the Botanix share price reached a 52-week high of 15 cents 2 weeks ago.

More reading

• ASX 200 Weekly Wrap: ASX 200 hits a 6! Thank iron ore
• Hydrix (ASX:HYD) share price falling despite positive AGM update
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Pointsbet Holdings Ltd (ASX: PBH) shares have slumped almost 8% in morning trade. The falling Pointsbet share price has come despite no market sensitive announcements out of the company or significant news regarding the sports betting sector. 

Pointsbet peers unchanged

Pointbet’s gambling and sports betting peers have been largely unchanged today with the Tabcorp Holdings Limited (ASX: TAH) share price down just 0.25% and United States-listed bookmaker, Draftkings Inc (NASDAQ: DKNG) closing flat last Friday. This is a far cry from the significant drop seen in the Pointsbet share price this morning.

Sports betting continues to develop in the US 

The US sports betting scene continues to develop in favour of bookmakers. States across the board continue to set monthly records for sports betting handles. Indiana set a third consecutive record month after its gaming commission reported $251.4 million wagered in November. Pointsbet re-launched its Indiana operations back in July 2020 with a first quarter FY21 turnover of $14.3 million in the state.  

The Pointsbet share price bigger picture 

Despite today’s falls, the Pointsbet share price has still surged more than 500% since its IPO back in June 2019. Even after the initial COVID-19 selloff in March, the Pointsbet share price is still up more than 150% year to date. 

The company announced a significant media partnership with NBCUniversal back in August. This deal is estimated to be worth at least $500 million as Pointsbet has committed to spend US$393 million in progressively increasing amounts over the 5-year media partnership, together with incentives payable to NBCUniversal for customer referrals. NBCUniversal has also put skin in the game with a 4.9% shareholding of Pointsbet. 

Pointsbet initiated a A$303 million capital raising at $6.50 per share to fund the deal. The entitlement offer represented a significant 48.9% discount to the closing price of $12.73 on Wednesday 2 September 2020. Shareholders also received one new option for every two shares issued under the entitlement offer. These new options are exercisable at $13.00 and expire on 30 September 2022. As a result of its capital raising, the company’s corporate cash balance sat at $436.5 million as at 30 September 2020.

Looking ahead 

Pointsbet successfully launched in Colorado in November this year and plans to launch in Michigan in the third quarter of FY21. Furthermore, the company also plans to debut its iGaming product in Michigan in the same period and in New Jersey the second half of FY21.

More reading

• The Pointsbet (ASX:PBH) share price is up 170% in 2020. Here’s why
• Why the Afterpay (ASX:APT) share price and these ASX stocks could get a boost next week
• Why has the PointsBet (ASX:PBH) share price gone nowhere since August?
• The 13 ASX shares that could have doubled your money in 2020
• Why Afterpay, Goodman, MedAdvisor, & PointsBet shares are dropping lower

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Pointsbet (ASX:PBH) share price just crashed 8% appeared first on The Motley Fool Australia.

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