RX.V · BioSyent 16.18 CAD +0.10 (+0.62%) 2026-SEP-18 09:30 EST

BioSyent is a small Canadian drug company — about $167 million in total value, share price $14.50 — that does something unusual: it never invents anything. Inventing a drug costs hundreds of millions and usually fails; and when it works, the patent eventually expires and generic copies destroy the profits (drug people call that the "patent cliff"). BioSyent skips both problems by doing what's called in-licensing: it finds a product that someone else already developed and got approved — usually in Europe — and buys the right to sell it in Canada, then sells it through its own small sales team of reps who visit pharmacies, hospitals and specialist doctors. No laboratory, no research gamble, no cliff. The only thing that can go wrong is bad selling. It has now been profitable for 63 quarters in a row — nearly sixteen straight years.

Until recently the company was really one product: FeraMAX, an iron supplement, which Canadian pharmacists have recommended more than any other for eleven years running and which was about 70% of all revenue. That is a dangerous amount of eggs in one basket, and it is why, the authors argue, nobody paid attention to the stock. Two things changed that in eighteen months. In March 2026 BioSyent bought Oral Science, a dental-hygiene supplier, for $25.5 million; it sells into more than 6,000 dental clinics — roughly four in every ten in Canada — and did $31.2 million of revenue last year, growing 15% a year. The price paid was 6.3 times the target's annual operating profit (and under 5 times once you account for the inventory and receivables that came with it), which for a business growing at double digits is cheap. And in May 2026 Health Canada approved Thyconvi, the first liquid version of levothyroxine — the standard thyroid medicine — available in Canada. Between them, FeraMAX has dropped to about 40% of revenue. Same company, far less fragile.

The Thyconvi story is the clearest illustration of how this management team thinks. The rights cost an upfront fee of 50,000 euros — a rounding error — for a product addressing one of Canada's biggest chronic prescription categories. Tablets have been around for decades, but some patients genuinely cannot use them: people who struggle to swallow (about 2.5% of the population), children, and people whose bodies absorb tablets inconsistently. Management thinks it could eventually reach $10 million of annual sales; the authors think $5–20 million. And here is the discipline that matters: the plan assumes provincial governments never pay for it at all. To get on a province's approved-drug list you must offer a steep discount, and management decided that isn't worth it — so the whole forecast is built on patients and private insurers paying directly. Any government coverage that does happen is a free bonus on top.

Two more things the authors like. First, alignment: the CEO, René Goehrum, personally owns about a fifth of the company — so when he decides whether to raise the dividend, buy back shares or do a deal, he is spending his own money. Over 14 years revenue has grown about 20% a year, earnings per share about 18%, and the number of shares outstanding has fallen 20% (buybacks mean each remaining share owns more of the business). Anyone who bought when he took over in 1999 at 20 cents has made 72 times their money. Second, valuation: the stock trades at about 8.5 times its expected 2027 operating profit (the "EV/EBITDA" multiple — roughly, what you pay for each dollar of yearly operating cash earnings, counting debt). If the company keeps executing, the authors think a business like this deserves 10–12 times, which — combined with profit growth — gets them to a fair value of $22 to $30 a share versus $14.50 today. There is also unpriced upside in PerioMonitor, a chairside gum-disease test Oral Science invented that gives results in minutes instead of sending a swab to a lab; it is already approved in the US and management is shopping it to a global partner.

The risks are honest ones. The biggest is a competitor called Accrufer, launched in early 2025 by a private company, Kye Pharmaceuticals — the first and only prescription oral iron in Canada. That distinction is structural, not cosmetic: because FeraMAX is legally classified as a "natural health product" rather than a prescription drug, provincial drug plans and many insurers simply cannot cover it, while Accrufer is eligible. So far Accrufer looks to be attracting new patients rather than stealing FeraMAX's, and FeraMAX still grew in 2025 — but the authors call it "the single largest watch-point." Beyond that: Thyconvi's launch is unproven, the newly bought Oral Science depends heavily on its founder and on one Swiss supplier that is itself going through a leadership change, and the stock is extremely thinly traded — a typical day sees only about 5,000 shares change hands, with just one analyst covering it. That thinness is a double edge, and the authors say so plainly: it is precisely why a business this good can be this cheap, but it also means you cannot build or exit a meaningful position quickly, and small news moves the price hard. This is a multi-year, patience-required holding, not a trade. Disclosure: the authors and Forterra own the shares, and have committed not to trade them for ten business days after publishing.