NetworkNewsWire Editorial
Coverage: Morgan Stanley’s research
team in January 2017 forecast that biotech-pharmaceutical companies
– with a combined $75 billion in cash on hand – would strategize to
boost revenue growth through mergers and acquisitions of smaller
companies with high-potential product pipelines (http://nnw.fm/mN24x). Growth via strategic acquisition
makes more sense to cost-conscious Big Pharma than does shelling
out $2.55 billion (http://nnw.fm/3Qr3S) to develop a new drug in-house.
With growing interest in the convergence of cannabis and medicine,
companies like InMed Pharmaceuticals, Inc. (CSE: IN)
(OTCQB: IMLFF) (IMLFF
Profile), which has an innovative
biosynthesis technology that addresses the regulatory concerns
associated with consistent pharmaceutical-grade cannabinoids and
logistical constraints on development, may find themselves on the
radar of Big Pharma. Mid-tier cannabinoid developers such as
Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) and
Axim Biotechnologies, Inc. (OTCQB: AXIM) are also
developing cannabinoid-based therapies, possibly on track for the
same opportunity seen in the $847 million acquisition of Scioderm
by Amicus Therapeutics, Inc. (NASDAQ: FOLD).
According to Thompson Reuters, pharma deals in 2015 increased 94
percent to $59.3 billion over the prior year, which adds weight to
Morgan Stanley’s projections, and GW Pharmaceuticals’
(NASDAQ: GWPH) position as the leader of the Marijuana Index
biotech sector demonstrates how biotechs continue to drive
value in the broader, acquisition-hungry pharmaceutical sector.
Global pharma and life sciences M&A values slumped over 60
percent in Q3 of this year, as compared to Q2, in all
subsectors except biotech, according to Pricewaterhouse
Coopers. Large companies losing revenue amid expiring patents and
facing costly R&D is a pattern
baked into the biotech market. As such, the acquisition of
revenue-producing biotechs as a solution is a trend that will most
likely hold fast in upcoming years. Such a robust, underlying
market environment is great news for cannabinoid biosynthesis
pioneer InMed
Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF), the
developer of a proprietary, scalable biosynthesis process capable
of manufacturing all of the more than 90 naturally-occurring cannabinoids at pharmaceutical
grades in-house – a rare and possibly unattained ability for
everyone else in the industry. What this means is that InMed
provides a solution to a main hindrance of U.S. FDA approval of
cannabinoid-based therapies: producing consistent,
pharmaceutical-grade cannabinoids that are identical to those found
in nature.
This capability also enables InMed to cost-effectively produce
its own high-yield cannabinoids for its product pipeline, rather
than outsourcing cultivation as does industry giant GW
Pharmaceuticals and other cannabis-focused biotechs. InMed’s lead
product, INM-750 (http://nnw.fm/0Q5ia), is a topical product designed to
treat epidermolysis bullosa (EB), a rare disease of the skin’s
connective tissues, for which there is a significant unmet medical
need and no currently approved treatments. INM-750 contains a
combination of biosynthetically-produced cannabinoids carefully
selected to modulate levels of the key keratins (proteins) that are
absent in EB patients and, thereby, it is hoped, modulate the
disease itself. INM-750 is also designed to address the numerous
symptoms of EB such as inflammation, wound healing, skin
regeneration, itching, and pain.
Because INM-750 will be the first therapy of its kind, InMed
filed an international Patent Cooperation Treaty (PCT) application
to commercially protect this valuable IP across the participating
151 PCT member countries. Given the well-documented multi-mechanism
anti-inflammatory, analgesic and wound healing properties of
various cannabinoid compounds, as well as InMed’s emerging
pre-clinical data on the use of cannabinoids for the treatment of
EB, the company is taking all the necessary steps to lock in access
to what it sees as a potential $1 billion global market. InMed has
even tapped advanced human tissue-engineering company ATERA SAS of
France to develop 3D
human skin models engineered from cells of EB patient biopsies
in an effort to aid in the investigation of INM-750’s impact at
ultra-structural cellular and molecular levels via in vitro models
using both normal skin cells and EB-derived skin cells.
With a market cap of just over US$45 million, InMed boasts a
rare position as the owner of proprietary biosynthesis and
bioinformatics technologies (http://nnw.fm/e069N) and is developing the technology
to produce commercial quantities of cannabinoids without the
production and maintenance costs and pitfalls associated with
chemically-derived cannabinoid synthetics. InMed’s approach to
developing biosynthetic cannabinoids combines the inherent safety
and established efficacy of natural drug structures with the kind
of quality-controlled pharmaceutical manufacturing required by the
FDA. This process also grants the company direct access to
overlooked minor cannabinoids that are currently economically
unfeasible to extract from the plant. Combining these advantages
with the company’s ability to rapidly identify and develop
additional indications such as the company’s INM-085 for the >$5
billion glaucoma market, or INM-405 for pain, results in all the
right ingredients to potentially make InMed one of the sector’s
next big stars or M&A targets.
As noted earlier, the Scioderm acquisition is a hallmark
demonstration of the potential for companies with clinical success,
as at one point it was in a similar position before being acquired
by Amicus Therapeutics (NASDAQ: FOLD) for nearly
$850 million. Scioderm’s development of Zorblisa™, its only asset
that was a promising topical wound-healing agent for EB patients,
made a natural and accretive opportunity for Amicus’ IP portfolio.
Notably, Scioderm’s acquisition in 2015 by Amicus followed phase 2b
study results from 42 patients. JP Morgan and Cowen estimate peak
sales for a product in EB to treat only the symptoms will be
USD$900 million-$1.2 billion (http://nnw.fm/fL6VH).
This acquisition story not only emphasizes the value of biotech
to the pharmaceutical industry, but also demonstrates the potential
for cannabinoid-based candidates from companies like InMed and
Zynerba Pharmaceuticals (NASDAQ: ZYNE), which is
focused on transdermal synthetic cannabinoids such as ZYN002, a
first-of-its kind synthetic cannabidiol formulated as a
patent-protected and permeation-enhanced gel. ZYN002 has been
granted Orphan Drug Designation in a genetic developmental and
cognitive syndrome known as Fragile X and is also being developed
as a treatment for refractory epilepsy and osteoarthritis of the
knee. ZYN002 recently met its primary endpoint in an open label
exploratory phase 2 clinical trial, with a 46 percent improvement
in patients’ total ADAMS score (Anxiety, Depression, and Mood
Scale). This clinical-stage cannabinoid developer was recently
added to the Russell 3000® Index. Zynerba is currently valued at
$130+ million.
Axim Biotechnologies (OTCQB: AXIM) announced in
an October release news of the USPTO’s allowance of the company’s
December 2015 patent filing for an “ophthalmic solution comprising
cannabinoids for the treatment of glaucoma and symptomatic relief
of conjunctival inflammation.” This notice of allowance extends the
company’s already firm footing in cannabis-based pharmaceutical,
nutraceutical and cosmetic products. Its position has been
established by such products as the company’s CBD-based, controlled
release chewing gum CanChew+®, as well as the combination CBD/THC
gum MedChew Rx®. Axim has a market cap of $350 million.
GW Pharmaceuticals (NASDAQ: GWPH) is a great
example of the kind of success possible in in today’s biotech
space. GW Pharmaceuticals’ share price has increased over 1,000
percent from humble beginnings in 2013 when the company closed its
IPO at $8.90 per share. Since then, it has transformed into a
sector powerhouse with a market valuation of more than $2.8
billion, trading in a 52-week range of $92.65-$136.95. This
share-price performance precedes the anticipated receptivity by
both the health care market and the FDA to indications such as the
company’s Epidiolex® (plant-derived cannabidiol) for severe,
orphan, early-onset, treatment-resistant epilepsy syndromes,
including Dravet syndrome and Lennox-Gastaut syndrome (LGS). The
company has received Rare Pediatric Disease and Orphan Drug
Designations for Epidiolex in both syndromes, as well as Fast Track
Designation in Dravet syndrome, and it recently completed the
rolling submission of a New Drug Application for Epidiolex as an
adjunctive treatment of the seizures associated with both (http://nnw.fm/C2ybx). With three phase 3 Epidiolex
safety and efficacy studies under its belt, each of which met
primary endpoints with good tolerability, GW Pharmaceuticals
continues to establish itself as a vanguard for cannabinoid
therapeutics.
Whether it is commercial success with a novel drug to satisfy an
unmet medical need or a buyout by a major player in the sector that
wants to forego the risk and cost of developing a new drug
in-house, the future looks bright for successful cannabinoid
therapy innovators amid robust and ongoing biotech M&A
activity. The cannabinoid medicines game is just getting started,
and there are already projections for the global medical marijuana
market alone to reach some $55.8 billion by
2025, growth which is said to be due, in large part, to the
mounting number of therapeutic applications of the drug.
For more information on InMed Pharmaceuticals,
visit: InMed
Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF)
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