December 04, 2022

Voyageur Pharmaceuticals strategy is to remove the middleman and supply radiographic contrast media direct from mine to the X-ray center

Sourcing raw materials is one of today’s biggest problems, as a result companies are looking to have more localized supply chains. Some companies are going one step further and securing their own raw materials to become 100% vertically integrated. This typically removes most of the supply chain risk and lowers the products cost, making the company more resilient to supply chain disruptions and more competitive. In the case of pharmaceutical products it can also potentially remove any risks of contaminated or poor quality supply, a key factor for products going inside the human body.

Today’s company, Voyageur Pharmaceuticals Ltd. (TSXV: VM) (“Voyageur”) is doing this in the radiographic contrast medium business by developing barium sulphate and iodine generic radiographic products for the healthcare market (contrast medium in X-rays, MRI & CT Scans).

Voyager is building a vertically integrated contrast medium supply business

Voyageur is unique, as it plans to source its own main ingredients from its own mineral deposits. Voyageur is building a business model that will allow it to be a fully integrated company in the radiographic market place.

Voyageur plans to build all the required infrastructure to become 100% self-sufficient with all manufacturing. Voyageur owns a 100% interest in three barium sulfate projects and has interests in a potentially high-grade iodine, lithium & bromine brine project located in Utah, USA.

The Frances Creek Barium Sulfate Project

The Frances Creek Barium Sulfate Project is the most advanced of the barium sulphate projects and Voyageur has recently raised funds to progress the project including preliminary economic assessment, pre-feasibility and a Frances Creek development study. The Project has 700 m of strike and is open in all directions. It has been drilled along a total of 220 m of strike, 90 m of true vertical depth, resulting in 166,210 tonnes of Indicated Resource grading 37.75% barium sulfate and 195,578 tonnes of Inferred Resource grading 35.4% barium sulfate.

The Frances Creek Barium Sulfate Project is located near the town of Radium Hot Springs, British Columbia, Canada

Source: Company presentation

Health Canada approvals and USA FDA device registrations in the pipeline

Voyageur has already recently announced two Health Canada approvals and issuance of product licenses for MultiX Ba and Radiographic Barium Contrast and has received approval from Health Canada for MultiX thick barium sulfate suspension as well as plans to move forward with FDA device registrations for the U.S. market. The FDA has only recently changed barium sulphate from a drug to a device, thereby making it easier to get approval for its uses in humans for contrast material used in X-rays.

Voyageur’s business strategy

Voyageur’s strategy is to generate near-term cash flow while building out quarry operations.

  • Phase 1: Source third party raw materials and use contract manufacturers to launch Voyageur’s brand. AVL Calgary facility to produce barium contrast, marketing and sales. Voyageur has begun to work on expansion of registrations in other jurisdictions outside of Canada. (USA, UK, Europe, Asia Pacific, Africa, Latin America, Australia).
  • Phase 2: Prepare Frances Creek deposit for bulk sample and API/barium contrast manufacturing plant. Once achieved, bulk sample expected to replace all third-party barium and allow for 100% production of contrast media material to be controlled by Voyageur, resulting in potentially highly competitive pricing.

Current status of Voyageur’s projects

Next steps

Source: Company presentation

Closing remarks

As the global population ages demand for X-rays, CT-scans and MRI’s is only increasing and that also means demand for contrast media.

Voyageur is different from other contrast media suppliers in that they are building a vertically integrated business to source materials from the mine all the way to the X-ray center. Their strategy aims to control supply and reduce costs by removing all the middlemen; thereby reducing price, delivery risk and increasing profitability. Voyageur state once achieved that they will be “the only pharmaceutical radiographic contrast company to utilize its own mineral resource”.

It’s not every day you get to buy into a development stage mining and pharmaceuticals company with a low market cap. Investors get the opportunity to benefit from two developing businesses in one – the mines and the pharmaceuticals business. Most interesting, especially considering that Voyageur Pharmaceuticals Ltd. trades on a market cap of just C$13 million. One to watch.

Disclaimer: The author of this post may or may not be a shareholder of any of the companies mentioned in this column. None of the companies discussed in the above feature have paid for this content. The writer of this article/post/column/opinion is not an investment advisor, and is neither licensed to nor is making any buy or sell recommendations. For more information about this or any other company, please review their public documents to conduct your own due diligence. To access the disclaimer and other important legal notices, click here.

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