Cannpal Animal Therapeutics Ltd (ASX: CP1) shares have not had the best start to life on the Australian share market following their admission this morning.
The latest pot stock to list on the market did so at 20 cents per share, but at the time of writing its shares are down 10% to 18 cents.
What is CannPal Animal Therapeutics?
As the name implies, unlike Auscann Group Holdings Ltd (ASX: AC8) and Cann Group Ltd (ASX: CAN), CannPal is focused purely on the companion animal side of the medicinal cannabis market.
It is a leader in cannabinoid derived animal therapeutics and is developing medicines to provide veterinarians with clinically validated and standardized therapeutics to treat companion animals in a safe and ethical way.
CannPal closed its IPO early and oversubscribed on September 22, raising the maximum subscription of $6 million.
According to management, the money raised is partly being used to fund the clinical phase of the CannPal's lead drug candidate CPAT-01.
CPAT-01 is being developed as a regulatory approved treatment for pain in dogs and an alternative to Nonsteroidal Anti-Inflammatory Drugs (NSAIDs).
NSAIDs are the most commonly used treatments for pain in companion animals in a market estimated to be worth more than $1.4 billion globally, but come with a long list of side effects.
The remaining funds have been allocated to the research and development of other pharmaceutical and nutraceutical products in the company's pipeline, intellectual property strategy, and operational costs.
Should you invest?
Considering the size of the market that the company is attempting to disrupt, if CPAT-01 is approved and adopted by veterinarians, then CannPal could generate significant revenues.
However, it is still some way of making that a reality. So for now, I would suggest you keep it on your watchlist and wait to see how the CPAT-01 story unfolds.
