Fast-Growing Cannabis Industry Drives Biotech Research, Innovative Medical Therapy Development

NetworkNewsWire Editorial Coverage / January 25th, 2018

The rapidly growing cannabis industry has spawned a range of diverse companies focusing on innovative technologies for cannabis cultivation, as well as the development of cannabis-based medical therapies for an array of diseases and ailments. The market has given rise to biotech companies with exciting advances in product formulation and delivery. At the cutting-edge of innovation, PreveCeutical Medical Inc. (OTCQB: PRVCF) (CSE: PREV) (FSE: 18H) (PRVCF Profile) has developed an innovative cannabidiol (CBD)-based nose-to-brain delivery system for the relief of a number of medical conditions. Another company, Lexaria Bioscience Corp. (OTC: LXRP) (LXRP Profile) has developed its own proprietary system for CBD-based therapy delivery. And with a market cap of over $3.6 billion, GW Pharmaceuticals plc (NASDAQ: GWPH) is an established giant in the cannabis biotech space developing plant-derived cannabinoid therapeutics. Canadian cultivator Canopy Growth Corp. (TSE: WEED) is an example of yet another company that could benefit from its therapeutic advances as the anticipated commercial availablity of pharmaceutical-grade cannabis products is met by greater demand.

The cannabis market is likely to surpass $31 billion by 2021, billowing from its value of $6.5 billion in 2016, according to a Brightfield Group report quoted by Forbes (http://nnw.fm/b75xW). A different report by investment bank Cowen & Co. estimates that the market will increase to $50 billion by 2026 (http://nnw.fm/wmv6C). This caliber of growth, to a large extent, is fueled by the increasing legalization of cannabis for medical and recreational use in Canada and in many states across the United States. As demand for cannabis-based medications grows, the market will become increasingly competitive, compelling companies to develop innovative therapies and delivery systems to gain more traction in the marketplace.

Diverse Portfolio Creates Multiple Market Opportunities

Headquartered in Vancouver, Canada, PreveCeutical Medical Inc. (CSE: PREV) (OTCQB: PRVCF) (FSE:18H) started out in 2009 as a partnership between established businessman and venture capitalist Stephen Van Deventer, and entrepreneur Kimberley Van Deventer. The synergy of the pair’s respective aptitudes led to the creation of Cornerstone Global Partners, a venture capital and business development company.

Today, PreveCeutical is a life science company that researches and develops innovative solutions for preventative and curative therapies through a combination of organic and Nature Identical™ products. With the preventative healthcare technologies market expected to reach $432 billion by 2024 (http://nnw.fm/UF8u8), the company has made a strategic decision to focus on warding off illness in the medically acute areas of diabetes, obesity, pain management, neurological disorders and cancer.

By maintaining a diverse portfolio of novel compounds and products, PreveCeutical is able to compete in several niches of the health care industry, including immunity-boosting sciences and medicinal cannabis.

PreveCeutical has a product, CELLB9®, an oral dilute solution utilizing select peptides from the blue scorpion, found only in the Caribbean region. PreveCeutical’s “Nature Identical” research team is building on proprietary chemistry to produce controlled venom peptides that it hopes will be able to halt the progression of cancers, while also exploring the peptides’ potential in responding to other medical concerns related to pain management, metabolic disorders, cancers, cardiovascular conditions and infectious diseases.

PreveCeutical is currently in a joint venture with Sports 1 Marketing to focus on the therapeutic potential of the Natural Identical venom’s peptides and proteins to treat mild brain injury concussions in athletes.

The company is also currently working with four leading Australian research centers to develop a curative therapy for diabetes and obesity. This is a novel four-year program selectively targeting the gene that encodes for the protein PTP-1B, implicated and over-expressed in both Type-2 diabetes and obesity.

Globally, over $800 billion is spent on diabetes, with one person dying every six seconds from the disease (http://nnw.fm/2OqnS) in 2014, presenting to PreveCeutical significant market opportunity and the potential to alter the diabetes landscape.

Notably, PreveCeutical’s innovative gene-silencing technology would effectively disable the genetic signal that leads to over-production of PTP-1B. This would bring this protein down to safe, normalized levels that would prevent the body from storing excessive fat.

PreveCeutical’s Groundbreaking Sol-Gel Delivery System

PreveCeutical in November announced its approval from the Environmental Hazards Unit of the Queensland Government (the Australian state-level authority) to acquire, store and use high-quality dried cannabis plant extracts, paving the way for the company to advance its R&D program for the commercialization of a new system for administering the drug (http://nnw.fm/47wwI).

The company believes its Sol-gel platform will be the first FDA-approved, CBD-based nose-to-brain delivery system of its kind to provide relief for pain, inflammation, seizures and neurological disorders. PreveCeutical’s proprietary nasal formulations will be designed for use by both adults and children. The company expects to have this delivery platform fully tested, approved and primed for deployment to licensed medical cannabis companies in 2019.

PreveCeutical’s Sol-gels are taken via nasal administration. They gel rapidly on contact with mucosal tissue, paving the way for direct nose-to-brain delivery. By circumventing first-pass metabolism in the stomach, intestines and liver, bioavailability may be dramatically improved, even compared to other nasal sprays and alternative delivery systems. The gel stays in the nasal passages, providing controlled CBD release while maintaining activity for up to seven days. Its ease of application, long-lasting effects and absence of negative side-effects may make it attractive for patients over other delivery systems.

The Company’s Development and Management Team

PreveCeutical Medical’s research team is led by Dr. Harendra Parekh, Ph.D., based at the Pharmacy Australia Centre of Excellence (PACE) at the University of Queensland. He is joined by Chief Science Officer Dr. Makarand Jawadekar, Ph.D., who has 28 years of experience in R&D with Pfizer Inc. They are supported by research collaborators, Dr. Rakesh Veedu and Professor Grant Ramm. Dr. Veedu is an emerging international expert in molecular medicine, while Professor Ramm is currently head of a leading medical research institute in Brisbane, Australia.

PreveCeutical also partners with industry experts and companies in its drive to establish a leadership position in the preventative health sciences sector. Its research and development partnership with the University of Queensland’s commercialization company, UniQuest, grants PreveCeutical rights to all intellectual property arising from projects created by the partnership.

The Company’s management team has extensive experience in research, product development, deep corporate strategy development and leadership in capital markets. PreveCeutical is re-capitalizing to fund its ambitious research and development program. Following a private placement completed in July 2017, the company expects the next round of financing to close in mid-February.

A recent Crystal Equity Research report summarizes the company’s differentiated endeavors in health care, highlighting PreveCeutical’s ability to raise the capital needed to execute its business plans.

“Our bullish view on PreveCeutical Medical is influenced by the Company’s plans to bring novel therapeutic compounds to the market at a time when the preventative health care market is entering a period of rapid growth. Management has demonstrated the ability to garner investor support and raise capital at a critical time in its development agenda, a recognized key to success for any health sciences company. Management has also been successful in securing research and development talent through a strategic relationship with a respected and successful academic institution,” reads the report (http://nnw.fm/Ho4v2).

Industry Comparables

Another innovative biotech, Lexaria Bioscience Corp. (OTC: LXRP), has developed disruptive delivery technology that facilitates healthier ingestion methods, lower overall dosing and higher effectiveness of lipophilic active molecules. The company out-licenses its delivery platform, which has multiple patents pending in more than 40 countries. Patents have been granted in the United States and Australia for the use of its DehydraTECH™ delivery technology. This provides increased intestinal absorption rates, faster delivery to the bloodstream and taste-masking benefits for orally administered cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine and other molecules.

London-headquartered GW Pharmaceuticals plc (NASDAQ: GWPH) focuses on discovering, developing and commercializing new therapeutics across a wide range of disease areas using its proprietary cannabinoid product platform. The company commercialized the world’s first plant-derived cannabinoid prescription drug, Sativex®, for the treatment of spasticity due to multiple sclerosis. Together with its U.S. subsidiary, Greenwich Biosciences, GW is proceeding with an orphan drug program for childhood epilepsy. It has filed a New Drug Application (NDA) with the FDA for its CBD-based drug Epidiolex for the adjunctive treatment of Lennox-Gastaut Syndrome (LGS) and Dravet Syndrome. Other products in its development pipeline include compounds in Phase 1 and 2 trials for glioblastoma, schizophrenia and epilepsy.

Canopy Growth Corp. (TSE: WEED) offers distinct brands and curated cannabis varieties in dried, oil and capsule form. The company operates seven cannabis production sites with more than 665,000 square feet of production capacity, which includes over 500,000 square feet of GMP-certified production area. It has global reach, with operations in seven countries across four continents. Canopy Growth educates healthcare practitioners and the public on cannabis. Through its partly owned subsidiary Canopy Rivers Corporation, the company builds its portfolio of stable investments by incubating new entrants to the cannabis market. Canopy Health Innovations, another partly owned subsidiary, focuses on research for commercial opportunities and IP development.

These companies are rising to the challenges presented by the increasing consumer demand for cannabis-based products. They are positioning themselves to assume leadership positions in their respective sectors of the cannabis industry to realize maximum value for their shareholders.