Stock Analysis & Valuation SciSparc Ltd. (SPRC)

• Previous Close: $0.74
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	39.50	5231
Intrinsic value (DCF)	2.69	263
Graham-Dodd Method		n/a
Graham Formula	47.57	6320

Strategic Investment Analysis

Company Overview

SciSparc Ltd. (NASDAQ: SPRC) is a clinical-stage pharmaceutical company specializing in cannabinoid-based drug development. Headquartered in Tel Aviv-Yafo, Israel, the company focuses on innovative treatments for neurological and neuropsychiatric disorders. Its pipeline includes SCI-110 for Tourette syndrome, obstructive sleep apnea, and Alzheimer's disease-related agitation; SCI-160 for pain management; and SCI-210 for autism spectrum disorder and epilepsy. SciSparc has strategic partnerships with Procaps for manufacturing and Sheba Medical Center for clinical research, positioning it as a key player in cannabinoid therapeutics. With a market cap of approximately $3.3 million, SciSparc operates in the high-growth biotechnology sector, targeting unmet medical needs with its proprietary drug formulations. The company, formerly Therapix Biosciences, rebranded in 2021 to reflect its expanded focus on cannabinoid science.

Investment Summary

SciSparc Ltd. presents a high-risk, high-reward investment opportunity due to its clinical-stage pipeline and focus on cannabinoid-based therapies. The company's revenue of $2.88 million in FY 2023 is overshadowed by a net loss of $5.12 million, reflecting the capital-intensive nature of biotech R&D. With a negative EPS of -$72.15 and an operating cash flow of -$5.1 million, the company relies heavily on funding to advance its clinical trials. However, its partnerships with Procaps and Sheba Medical Center provide validation for its technology. Investors should weigh the potential of its novel cannabinoid treatments against the inherent risks of clinical-stage biotech investing, including regulatory hurdles and competition.

Competitive Analysis

SciSparc competes in the niche but growing cannabinoid pharmaceutical market, differentiating itself through targeted neurological applications. Its competitive advantage lies in its proprietary cannabinoid formulations and strategic collaborations, which accelerate clinical development. However, the company faces significant competition from larger biotech firms with deeper pipelines and greater financial resources. SciSparc's focus on Tourette syndrome and Alzheimer's agitation addresses underserved markets, but its success hinges on clinical trial outcomes. The company's small market cap and limited revenue streams make it vulnerable to funding challenges, though its partnerships mitigate some risk. Its pipeline's novelty provides first-mover potential in specific indications, but regulatory and commercialization hurdles remain key challenges.

Major Competitors

• GW Pharmaceuticals (GWPH): GW Pharmaceuticals, acquired by Jazz Pharmaceuticals (JAZZ), was a leader in cannabinoid-based drugs, notably Epidiolex for epilepsy. Its strong commercialization capabilities and FDA-approved products give it a significant edge over SciSparc. However, its focus on broader indications may leave niche markets open for SciSparc.
• Cronos Group (CRON): Cronos Group focuses on recreational and medicinal cannabis, with less emphasis on pharmaceutical development. Its strength lies in branding and distribution, but it lacks SciSparc's targeted clinical pipeline for neurological disorders.
• Tilray Brands (TLRY): Tilray is a diversified cannabis company with global operations. While it has a broader market presence, its pharmaceutical segment is less specialized than SciSparc's, which focuses on specific neurological conditions.
• Zynerba Pharmaceuticals (ZYNE): Zynerba specializes in transdermal cannabinoid therapies for rare neurological conditions. Its focus on Fragile X syndrome and autism spectrum disorder overlaps with SciSparc's pipeline, but its delivery method differs, creating distinct competitive dynamics.