NetworkNewsWire Editorial
Coverage: In late October, President
Donald Trump called the ongoing opioid epidemic the “worst drug
crisis in American history” before declaring it a public health
emergency and pledging the nation’s full resolve in overcoming it.
These efforts could mark a changing of the tides as they relate to
opioid painkillers, and Big Pharma is already eyeing its next
moves. As reported by Reuters in June of this year, a handful of
major drug makers are exploring M&A opportunities within the
cannabis-based pain reliever market in hopes of cashing in on
rising demand for opioid substitutes and a variety of other
indications for which cannabis-based therapies show considerable
market potential. InMed Pharmaceuticals, Inc. (CSE: IN)
(OTCQB: IMLFF) (IMLFF
Profile), with its promising drug
development indications and noteworthy IP assets, is one biotech
that could be well-positioned to benefit from Big Pharma’s shifting
focus toward the cannabis market. As demonstrated by the holdings
and acquisition activities of CannaRoyalty Corp. (OTCQX:
CNNRF), Aphria, Inc. (OTCQB: APHQF),
Maricann Group, Inc. (CSE: MARI) and
Aurora Cannabis, Inc. (OTCQX: ACBFF), InMed’s
promising biosynthesis platform could put it on the radar of some
major names seeking entry into one the pharmaceutical industry’s
fastest-growing sectors.
Big Pharma’s mass entry into the cannabis space may well be on
the horizon, but most industry analysts agree that M&A activity
targeting existing cannabis biotechs, not internal research and
development efforts, will provide the primary entry pathway. This
reliance on M&A deals instead of R&D dollars has become a
driving trend in the pharmaceutical industry in recent years, with
the value of such transactions hitting $59.3 billion in 2015. The
cannabis industry, in particular, features a host of inherent
costs, including: dedicated real estate, facility maintenance, and
operating expenses, which are requisite for cultivation and
subsequent testing. When paired with risks of crop recalls and
ongoing concerns related to the use of fertilizers, pesticides and
herbicides to improve yields, these factors serve as sizable
barriers to entry for relatively inexperienced pharmaceutical firms
looking to cash in on the cannabis boom. Additionally, many of
these firms with strategic plans for overseas expansion will face
an increased level of regulatory burden on plant based
products.
These barriers to entry make InMed Pharmaceuticals, Inc.
(IMLFF
Profile), with its proprietary
in-house cannabinoid biosynthesis platform, an interesting
player in the cannabis biotech market. Biosynthesis mimics the
cannabinoid-creation process utilized by plants to create pure,
individual cannabinoids that are devoid of the
by-products and impurities found with extraction. InMed’s
method introduces the DNA of individual cannabinoids into E.
coli bacteria and leverages an advanced biofermentation
process that is both laboratory-based and tightly controllable.
This process virtually eliminates the quality and consistency
concerns that plague more traditional and antiquated extraction
techniques. Using this platform, InMed is capable of producing any
of the 90+ “downstream” cannabinoids that occur naturally in the
cannabis plant. With the value of the cannabidiol (CBD) market
alone in the U.S expected to hit $2.1 billion by
2020, the market potential of InMed’s biosynthesis IP is
substantial, and its development pipeline provides a taste of the
impact that this technology could have moving forward.
“This novel approach to the biosynthesis of cannabinoids is a
game-changer for drug development,” Dr. Vikramaditya Yadav,
Assistant Professor of Chemical and Biological Engineering at the
University of British Columbia and co-inventor of InMed’s
biosynthesis technology, stated in a recent news
release. “The importance of producing cannabinoids that are
identical to the naturally occurring compounds cannot be
overstated. Many drug development efforts with synthetic
derivatives have failed.”
InMed’s lead product candidate is INM-750, a cannabinoid-based
topical therapy being developed as a treatment for epidermolysis
bullosa (EB). An orphan disease with no known treatment and
significant unmet medical need, EB consists of a group of inherited
connective tissue disorders sharing a common manifestation of
extremely fragile skin that blisters or tears from friction or
slight trauma. With INM-750, InMed is attempting to harness the
well-documented anti-inflammatory, analgesic and would healing
properties of cannabinoid compounds to address these key disease
hallmarks. In early March, InMed announced its filing of an
international Patent Cooperation Treaty (PCT) application covering
INM-750, marking an important step toward providing intellectual
and commercial protection of the product as a topical therapy for
EB.
Joining INM-750 in InMed’s development portfolio are INM-085,
for the treatment of glaucoma, and INM-405, which focuses on the
pain-relieving benefits of CBD. As noted on the company’s website, INM-085
under development for the treatment of glaucoma, is a multi-target,
dual-mechanism of action therapy, utilizing multiple cannabinoids
for optimal efficacy. Implementing a proprietary polymer-based
formulation designed to enable simple, once-a-day application,
InMed’s INM-085 formulation could prove to be a game-changer in the
glaucoma treatment market, which is expected to exceed $3 billion
by 2023, according to research and consulting firm GlobalData. As
announced
late last month, InMed, in partnership with the University of
British Columbia, recently completed a study that was the first to
report hydrogel-mediated cannabinoid nanoparticle delivery to the
eye, with endpoints demonstrating enhanced drug uptake via the
cornea and lens.
INM-405, though earlier in development than InMed’s leading
product candidates, has also shown promising proof-of-concept data.
Just last month, the company announced
results from pre-clinical testing suggesting that “peripheral
application of certain cannabinoid compounds, alone or in
combination, is effective in the treatment of craniofacial muscle
pain disorders, without any observed CNS side effects, and may be a
more desirable strategy than systemic pain-relief administration.”
As noted in a recent news release, InMed has already filed a
provisional patent application in the United States protecting
INM-405, as well as other unique compositions as cannabinoid-based
topical therapies for the treatment of pain. This program and its
related IP, when combined with InMed’s proven biosynthesis
platform, could place it firmly on the radar of Big Pharma players
and other holding firms interested in staking a claim in what could
be the next big thing in pain relief, particularly as the opioid
crisis continues to grab headlines.
When considering M&A activity within the cannabis industry,
the portfolio of specialized holding company CannaRoyalty
Corp. (OTCQX: CNNRF) is a good place to start. Describing
itself as “an integrated platform designed for commercialization in
three high-value segments of the global cannabis market,”
CannaRoyalty’s brands are divided into three unique categories –
research/IP, retail and industry infrastructure. Alongside North
American research groups BAS Research and Bodhi R&D Inc.,
Anandia Labs, in which the company acquired a 20
percent equity stake earlier this year, anchors CannaRoyalty’s
research/IP arm with its focus on cannabis testing, extraction and
genetics.
Similar limitations impact the likes of Aphria, Inc.
(OTCQB: APHQF), Maricann Group, Inc. (CSE:
MARI) and Aurora Cannabis, Inc. (OTCQX:
ACBFF). All licensed producers and distributors of medical
marijuana, each of these companies has demonstrated interest in
expanding its position in the cannabis market through investment or
acquisition in recent months. In mid-August, Aphria announced an
$11.5 million investment in Scientus Pharma, a
vertically-integrated biopharmaceutical firm conducting research on
cannabinoids with a special focus on commercializing
pharmaceutical-grade cannabinoid derivative products. Scientus
utilizes a patent-pending commercial scale microwave extraction
platform to formulate these products, meaning that traditional
cultivation operations, along with inherit concerns regarding the
potential use of fertilizers, pesticides and herbicides, still
impact development efforts.
In August, Maricann Group expanded its foothold in the cannabis
industry through its purchase of NanoLeaf Technologies Inc.
NanoLeaf is perhaps best known for its development, in partnership
with Vesifact, of a standardized dose soft gel capsule for
cannabinoid-based pharmaceutical Vesisob. Because cannabinoids are
fat-soluble compounds, they have characteristically low dissolution
rates and unpredictable oral availability. The presence of this
bio-delivery technology within NanoLeaf’s IP portfolio was noted,
in the announcing news release, as a key driver for Maricann’s
decision to purchase the company. This is a promising factor for
other industry upstarts with innovative bio-delivery IP targeting
the cannabinoid space, such as the proprietary hydro-gel
delivery mechanism employed by InMed’s INM-085 product
candidate.
Through its investment in Hempco in September, licensed medical
cannabis producer Aurora Cannabis once again highlighted the active
M&A scene in the cannabis industry. In a news release
announcing the investment, Aurora CEO Terry Booth noted that the
transaction served as a way of “securing a potentially material
source of raw CBD material for [Aurora’s] medical concentrates
business.” Per its investor
presentation, Hempco primarily sources farmed hemp seeds from
local Canadian farmers and processes them as a source of oils and
protein powders. While utilizing this infrastructure to extract CBD
for product development isn’t yet an option, Charles Holmes, CEO of
Hempco, highlighted it as a potential benefit moving forward,
stating “[I]f the current regulations prohibiting the extraction of
cannabidiol (CBD) from hemp products were to change, which we
anticipate will happen in the near to mid-term future, Hempco will
be very well positioned to capitalize on this opportunity through
its relationship with Aurora.”
The promise of cannabinoids as pharmaceutical products targeting
a wide range of currently-underserved indications has led to
significant M&A activity throughout the cannabis industry.
While the majority of market players have been forced to rely on
traditional cultivation operations to source the cannabinoids
needed to develop these products, forecast supply
shortages loom large, particularly in Canada. By dodging this
supply dearth and effectively eliminating quality concerns that can
plague cannabis cultivation operations, InMed Pharmaceuticals, with
its biosynthesis technology and promising development pipeline, has
established itself as a company to watch as Big Pharma begins to
set its sights on the future of pain relief and the increasing
value of biotechs to the cannabis industry.
For more information on InMed Pharmaceuticals
please visit: InMed
Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF)
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