SciSparc Ltd. (SPRC): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at a micro-cap clinical-stage firm, SciSparc Ltd., with only 2 employees as of late 2025, and you need to know if the risk is worth the potential reward. Honestly, the competitive landscape is brutal: with H1 2025 sales barely hitting $0.461 million and a market cap hovering between $3.89 million and $4.82 million, the company is fighting giants in CNS disorders while simultaneously battling low-cost substitutes in its wellness line. Below, we break down Porter's Five Forces to map out exactly where the pressure is coming from-from powerful customers waiting for approval to the high threat of existing drugs-so you can see the real-world risks baked into this tiny operation.

SciSparc Ltd. (SPRC) - Porter's Five Forces: Bargaining power of suppliers

When you look at SciSparc Ltd.'s supplier landscape, you see a clear split: highly specialized, high-stakes partners versus low-cost commodity providers. For a company this lean, the power dynamic tilts heavily toward the specialized vendors.

The reliance on specialized Contract Research Organizations (CROs) for critical clinical work, like the planned Phase IIb trials for its pipeline, definitely gives those CROs leverage. We know the global CRO sector saw rising demand in the first half of 2025, which tightens the market for sponsors like SciSparc Ltd.. When you are running complex, late-stage trials, finding a replacement CRO that already understands your specific cannabinoid-based drug protocols-like SCI-110 or SCI-210-is not a quick fix; it's a major operational hurdle.

Switching costs for key Active Pharmaceutical Ingredients (APIs) are also high, which is typical for proprietary cannabinoid-based drugs. If SciSparc Ltd. is locked into a specific synthesis route or supplier for the THC or CBD components of its lead candidates, that supplier holds significant sway over pricing and supply continuity. The company's focus remains on drug development programs such as SCI-110 for Tourette syndrome and SCI-210 for ASD and status epilepticus.

Here's the quick math on just how small the internal team is, which magnifies dependence on external partners. As of December 31, 2024, SciSparc Ltd. had only 2 employees. That means nearly every function-from R&D oversight to finance and legal-is outsourced or managed by a small core team, making the relationship with key service providers non-negotiable in the short term. What this estimate hides is the network of consultants, but the headcount itself is the hard data point.

Conversely, the bargaining power for commodity raw materials, likely tied to the former Online Sales segment, is low. While SciSparc Ltd. entered an LOI in late 2022 to sell a 50% interest in the subsidiary owning the Wellution™ brand for $3 million, any remaining hemp-based product sourcing would likely involve readily available inputs where SciSparc Ltd. is not a dominant buyer. This segment does not command the same critical supplier relationships as the clinical pipeline.

The supplier power structure is characterized by:

• High dependence on specialized CROs for Phase IIb execution.
• Significant switching costs for proprietary cannabinoid APIs.
• Low supplier power in commodity sourcing for non-core operations.
• The 2-person internal team structure amplifying external partner leverage.

Finance: draft a sensitivity analysis on CRO contract costs for SCI-110 by next Wednesday.

SciSparc Ltd. (SPRC) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for SciSparc Ltd. (SPRC) is highly segmented across its business lines, shifting dramatically based on the maturity of the product and the nature of the buyer.

Extremely high power from future large pharmaceutical partners for licensing commercial rights to drug candidates

When SciSparc Ltd. seeks to license commercial rights for its advanced drug candidates, the power shifts decisively to the potential large pharmaceutical partner. These partners control the massive capital, global distribution networks, and marketing muscle necessary to bring a drug to market successfully. The structure of potential deals reflects this power dynamic, often involving significant upfront payments contingent on future milestones. For instance, SciSparc Ltd.'s recent strategy in acquiring the GERD treatment technology from Xylo Technologies Ltd. suggests a model where commercialization relies on exclusive partnerships, following a precedent that involved a $3 million upfront payment for regional rights in Greater China.

This indicates that any future licensing agreement for SCI-110 or SCI-210 will likely see the partner demanding substantial concessions on royalty splits or milestone payments, given the high risk and cost of late-stage clinical trials and FDA/EMA approval processes.

Power is currently low since drug candidates (e.g., SCI-110) are pre-approval, with no large-scale sales yet

Currently, the bargaining power of customers in the pharmaceutical development pipeline is minimal because SciSparc Ltd. has no approved, large-scale revenue-generating drugs. The primary interaction is with clinical trial sites and investigators, not paying end-users or payers. The company is still in the development phase for key assets:

• SCI-110 for Tourette Syndrome is in a Phase IIb clinical trial.
• SCI-110 for Alzheimer's disease has a Phase II clinical trial completed.
• SCI-210 for Autism Spectrum Disorder is in a trial that commenced in the first quarter of 2024.

This pre-revenue status means SciSparc Ltd. is the party seeking validation and funding, not the price setter. The financial reality for the first half of 2025 underscores this early stage:

With trailing twelve months earnings around $3.7 million ending June 30, 2025, the company's current financial scale does not afford it leverage in negotiating with future pharmaceutical giants.

High power from individual consumers for the Online Sales segment due to low switching costs and product availability

For the segment involving the sale of hemp seeds' oil-based products, typically through Amazon.com Marketplace, the bargaining power of the individual consumer is high. These products compete in the nutraceuticals market, where switching costs are negligible; a consumer can easily move to a competitor's product with a single click. While SciSparc Ltd. owns a controlling interest in this subsidiary, the consumer dictates pricing through purchasing behavior. Specific revenue for this segment is not broken out, but it contributes to the overall H1 2025 sales of $0.461 million.

The power here is exercised through price sensitivity and platform reviews.

Institutional buyers (HMOs, government payers) will exert strong price pressure upon drug approval

Upon successful FDA or EMA approval for a drug like SCI-110, the power dynamic will flip again, moving to institutional buyers. Health Maintenance Organizations (HMOs) and government payers (like Medicare/Medicaid in the US) control formulary access and reimbursement rates for the vast majority of prescriptions. These entities are expert negotiators, focused on cost-effectiveness for large populations. Their leverage stems from their ability to exclude a drug from preferred status, effectively blocking patient access. While specific 2025 pricing pressure data is not public, historically, successful novel therapies face immediate demands for discounts, often in the range of 20% to 40% off the Wholesale Acquisition Cost (WAC) to secure favorable formulary placement.

SciSparc Ltd. will need to demonstrate significant clinical superiority over existing treatments to mitigate this inevitable price pressure from payers.

SciSparc Ltd. (SPRC) - Porter's Five Forces: Competitive rivalry

You're looking at the CNS disorder and pain management space, and honestly, the competitive rivalry SciSparc Ltd. faces is intense, dominated by large-cap pharmaceutical giants. These established players, like Johnson & Johnson, Eli Lilly, and Biogen, command massive research and development budgets and established distribution channels in areas where SciSparc Ltd. is trying to carve out a niche with its cannabinoid therapies. For instance, in the broader CNS Treatment and Therapy Market, which is projected to reach $136.3 billion in 2025, companies like Sanofi and Bristol-Myers Squibb are actively expanding pipelines in neurodegeneration and mental health care.

The financial reality for SciSparc Ltd. clearly reflects this competitive pressure. The company's interim financial statements for H1 2025, released on November 18, 2025, show that its sales for that period were only $0.461 million. That number confirms its minimal market share position when stacked against the multi-billion dollar revenues of its rivals. Also, the small market capitalization, hovering between approximately $3.89M and $4.82 million as of late November 2025, firmly establishes SciSparc Ltd. as a nano-cap industry player.

The competitive dynamic shifts when you look at the GERD device market, where SciSparc Ltd. is entering with the MUSE™ system following its intellectual property acquisition. Here, the rivalry is against established medical device behemoths. To give you a sense of the scale, Medtronic Plc holds a 20% share in the GERD device market, which is projected to grow from $1.3 billion in 2025 to approximately $1.9 billion by 2035. SciSparc Ltd. is aiming to replicate a licensing model that previously generated a $3 million upfront payment for Xylo in Greater China.

Here's a quick comparison mapping SciSparc Ltd.'s new GERD focus against a market leader:

The threat of new competition in this device segment is real, even as SciSparc Ltd. enters it. You have to consider the established players who already have deep regulatory experience and global reach. The anti-reflux device market historically featured dominant competitors like Johnson & Johnson, which offers the LINX® reflux management system. This means SciSparc Ltd. needs its differentiation to stick.

Consider the competitive factors SciSparc Ltd. must navigate in the GERD device space:

• Established players like Johnson & Johnson and Restech hold significant historical presence.
• Device development costs can range from $2.5 to $8.0 million.
• FDA approval processes add 18 to 24 months to development cycles.
• Implementation costs can extend by 30-40% due to training curves.
• The overall market CAGR is projected at 3.6% between 2025 and 2035.

SciSparc Ltd. (SPRC) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for SciSparc Ltd. (SPRC), and the threat of substitutes is definitely a major headwind, especially given the company's dual focus on clinical-stage pharma and online sales. Honestly, for a company with a market cap hovering around $3.96M as of late 2025, the sheer scale of the substitute markets is what you need to focus on.

High Threat from Existing, Approved, and Often Generic Drugs

For SCI-110, targeting Tourette Syndrome (TS) and Alzheimer's disease and agitation, the existing standard of care presents a formidable barrier. For Alzheimer's, the global drugs market is estimated to be valued at USD 5.64 Bn in 2025. Within that, established, often generic, drug classes already command significant share. For instance, Cholinesterase Inhibitors are projected to account for 40.5% of the Alzheimer's drugs market share in 2025. These existing treatments are accessible and have proven clinical benefit for symptom management, which is what most patients rely on today. On the generic side generally, the year-over-year (YoY) oral solid price change as of January 2025 was 19%, indicating a mature, cost-competitive segment that SciSparc Ltd. must overcome with superior efficacy data from its Phase 2b TS trial and ongoing Alzheimer's work.

Very High Threat for the Online Sales Segment

SciSparc Ltd.'s Online Sales segment, which moves hemp-based products, faces an ocean of competition. The global nutraceuticals market was already valued at USD 500.62 billion in 2025, and the US market alone was anticipated to produce revenue of US$ 161.8 billion in 2024. This massive market is flooded with countless competing wellness products. To be fair, the online distribution channel within the US nutraceuticals market is expected to grow at a notable CAGR of 10.7%, but that growth benefits everyone, meaning SciSparc Ltd.'s hemp-based offerings are fighting for a tiny slice of a gigantic, rapidly expanding pie.

Here's a quick look at the scale of the substitute market for the Online Sales segment:

Non-Pharmacological Treatments are Viable Substitutes

For CNS disorders like TS, non-drug interventions are established alternatives. Deep Brain Stimulation (DBS) is a prime example, which is even being investigated for TS itself. The Deep Brain Stimulator market was projected to be USD 1.4 billion in 2025. You see, this isn't just theoretical; it's a multi-billion dollar industry with established procedures. For instance, approximately 12,000 DBS procedures occur in the United States annually. If SCI-110 fails to show compelling superiority over existing therapies or behavioral interventions, these procedural substitutes remain highly viable options for patients.

The MUSETM GERD Device Faces Substitution

SciSparc Ltd. recently announced a binding term sheet to acquire patents for endoscopic systems, including the MUSE™ system, to enter the GERD device market. This market itself is subject to substitution pressure. While the global GERD device market is projected to reach $3.03 billion by 2030, the MUSE™ system competes against established, traditional surgical procedures and other existing endoscopic devices. The threat here is that established surgical centers may prefer existing, well-understood procedures or devices with long-term outcome data over a newly commercialized system, even if the new system is less invasive. The company's plan is to replicate a successful commercialization model in Greater China across North America, Europe, and Latin America, but the established competition in those regions is significant.

The substitutes are large, entrenched, and growing. Finance: review the projected cost of goods sold for the acquired GERD IP against the established market pricing for competing endoscopic procedures by Q1 2026.

SciSparc Ltd. (SPRC) - Porter's Five Forces: Threat of new entrants

You're assessing the competitive landscape for SciSparc Ltd. (SPRC), and the threat of new entrants paints a dual picture, sharply divided by the company's two main operational areas: clinical-stage pharmaceuticals and nutraceuticals.

In the core pharmaceutical segment, the threat of new entrants is decidedly low. Honestly, getting into this space requires deep pockets and a tolerance for extreme regulatory hurdles. New players face massive research and development (R&D) costs and the stringent, multi-phase approval process mandated by the U.S. Food and Drug Administration (FDA). The capital intensity is clear; for the half year ended June 30, 2025, SciSparc Ltd. reported a net loss of $9.33 million, which starkly illustrates the cash burn required to advance drug candidates like SCI-110. This financial reality acts as a significant deterrent for most potential competitors.

The high capital requirement, evidenced by SciSparc Ltd.'s H1 2025 net loss of $9.33 million against sales of only $0.461 million for the same period, deters most new entrants who cannot sustain such early-stage development losses. It's a classic barrier to entry in biotech.

Conversely, the nutraceutical and hemp-based product market presents a high threat. This segment, where SciSparc Ltd. has a subsidiary focused on hemp seed oil-based products, has significantly lower entry barriers. As you know, the nutraceutical industry is generally not regulated as heavily as pharmaceuticals, meaning new entrants do not face the same pre-market approval or extensive clinical trial requirements for supplements. This ease of access means competition can spring up quickly, often based on lower pricing, especially from established global manufacturers.

Patent protection on key drug candidates offers SciSparc Ltd. a temporary, but strong, barrier against direct competition for specific treatments. For instance, the company is developing SCI-110 for Tourette Syndrome and Alzheimer's disease agitation. Furthermore, a U.S. patent application covering a combination therapy involving MEAI and PEA for binge behavior disorders was published as recently as October 20, 2025, providing a layer of exclusivity for that specific innovation.

Here's a quick look at the forces shaping the pharmaceutical entry barrier:

The contrast in entry barriers across SciSparc Ltd.'s business lines is stark:

• Pharmaceuticals: High capital, high regulation, patent defense.
• Nutraceuticals: Low capital, minimal regulation, high fragmentation.
• Hemp-based products: Exposure to low-cost competition from established players.
• Patent strength: Protects specific cannabinoid-based assets temporarily.

The existence of fringe players in the supplement space suggests that quality control can be poor, which is a risk for the entire sector, but it confirms that setting up a basic product line is relatively easy.

Finance: draft 13-week cash view by Friday.