Feature Image

Dr. Titus Insights: Biotechs and Cannabis

September 16, 2016

This week:

  • GW Pharma has numerous acquisition offers from bigger pharma
  • Insys Therapeutics Spends $500,000 to defeat cannabis recreational legalization in home state, Arizona
  • Canada to ask the US to re-think its ludicrous border policy re cannabis usage
  • Technical 420 mentions MJNA in a Biotech investing Article

 

Pharmaceutical industry leader GW Pharmaceuticals Plc (NASDAQ: GWPH, London: GWP.L) a developer of marijuana-based medications approved in Europe and Canada for Multiple Sclerosis muscular spasticity patients, announced this week that it is working with a large New York investment bank, Morgan Stanley.  The news came as a result of other drug manufacturers approaching GW Pharma with expressions of interest in a potential acquisition.  

Thanks to recent developments in the US marketplace with an emerging and highly coveted medication known as Epidiolex, numerous pharma companies have started to take notice of GW’s patents and potential pipeline of cannabis-based medications.  Epidiolex, which is undergoing clinical development and fast-track status in the US for the treatment of epileptic seizure reduction, has shown safety plus 44% efficacy so far in pivotal Stage 3 trials for the treatment of seizure disorders in Lennox-Gastaut and Dravet’s Syndrome children.

The move in hiring Morgan Stanley shows that GW is a coveted target for potential acquisition.  Although the identity of potential suitors has not been established, rumors abound that groups such as pharma giant, Pfizer are showing significant interest in such acquisition.  Thus cannabis and cannabinoid based therapeutics are quite possibly the next great arena for big pharma to develop blockbuster pharma medications for a wide variety of ailments and conditions.

Biotech stocks are notorious volatile and in recent months have been somewhat on the downside, as US Presidential candidates and members of Congress have roasted pharma companies for price-gouging.  GW’s move is the latest sign that the biotech stock sell-of may be over as deal-making is picking up.  Last month, Pfizer Inc. (PFE, NYSE) clinched a $14 billion acquisition of US cancer drug manufacturer Medivation, Inc. (OTC: MDVN).

It is believed that other players in the market for central nervous system treatments such as Biogen Inc. (OTC: BIIB) and Allergan Plc (AGN, NYSE) are searching for acquisition deals to build out their commercial presence in this sector; further to strengthen their research and development pipelines.

Current GW partners include Novartis, Bayer AG and Almirall.  Epidoolex is in late-stage clinical development for potential FDA approval as soon as next year (2017) and estimates from investment bankers Cowen & Co. show annual sales may exceed $800 million annually.  Epidiolex and its clinical development will be pivotal for GW Pharma, as sales of its approved Sativex product in 31 European countries plus Canada have been modest, producing only $2 million in revenue for the latest financial quarter.

The news that GW had hired New York investment bank Morgan Stanley sent GW shares sharply higher on Sept 7 2016 – with US OTC market price back over $100, representing a daily gain in excess of 20%.  GWPH came public in May 2014 with an IPO of $10 a share – so longer term investors have been significantly rewarded by holding shares of the company.

More on this story here: http://www.bloomberg.com/news/articles/2016-09-07/gw-pharmaceuticals-jumps-on-report-it-may-be-acquisition-target

 

In other cannabis and cannabinoid pharma news, Insys Therapeutics (NASDAQ: INSY), based in Chandler Arizona donated $500,000 to Arizonans for Responsible Drug Policy, as was reported by the Arizona Capitol Times.  This donation, five times as large as the next leading donation shows that big pharma wants to keep a damper on any furthering of a botanical cannabis product – as big pharma pushes for its piece of the overall cannabis pie.  

Insys’ only product is an opiate spray to treat pain for cancer patients, known as Subsys, however there are several cannabinoid based drugs in the pipeline, including a formulation of cannabidiol which would be used to treat pediatric epilepsy.

Insys said in a statement that it holds nothing against cannabinoids as long as they are used properly.  To quote their release in the Arizona Capitol Times: “We believe that all available medicines should meet the clinical standards set by the FDA.”

An opposing view is presented by J.P. Holyoak, the chair of Arizona’s recreational cannabis legalization effort, who mentioned that Insys is opposing recreational cannabis legalization within the State because this would cut into company profits. Holyoak commented about Insys, “they want to be able to push their far more addictive, far more harmful and far more dangerous opioid drugs.”

More on this story here: http://mjbizdaily.com/pharma-firm-fights-az-rec-legalization-measure/

 

This week a Business Insider article was published regarding Canada’s citizens who wish to enter the USA – and the present US Border policy that bars entrance by Canadians into the US who admit to having used marijuana for recreational purposes.  Thus Canada will ask the US to “rethink its ludicrous marijuana policy”, especially in light of potential Canadian nationwide legalization of marijuana for recreational use which is expected to occur during the spring of 2017.  

In 2014 a British Columbia resident, Matthew Harvey was stopped at a US Border crossing point in Washington State where US Customs and Border Patrol agents asked him about his recreational marijuana use.  Harvey, who was 37 at the time and who had a permit to use medical marijuana, said that he smoked cannabis recreationally as a teenager – was detained and questioned for six hours before being denied entry to the US and barred from further entry.

According to the Canadian Broadcasting Company, Harvey mentioned, “that I was inadmissible because I admitted to smoking marijuana after the age of 18 and before I received my medical marijuana license.”

In an interview with the CBC, Canadian Public Safety Minister, Ralph Goodale said that the situation needed to be addressed – particularly in light of uneven marijuana restrictions in the US.  “We obviously need to intensify our discussions with our border authorities in the United States, including the Department of Homeland Security,” Goodale said last Thursday Sept 8th 2016.  

He went on to say, “this does seem to be a ludicrous situation” noting that marijuana was legal for both medical and recreational use in Washington State as well as “three or four other jurisdictions in the US”.  “There are certain ironies about the current American position that we will certainly be very vociferous in putting before them,” Canadian Public Safety Minister Goodale added.

To further reference some of the shortcomings of the two countries’ marijuana policies, Goodale offered this quote: “the present marijuana regime that has existed now for many years in both Canada and the United States has clearly failed Canadian and American young people because North American teenagers are among the biggest users of marijuana in the western world.”

For review, the US Controlled Substances Act lists marijuana as a Schedule I drug, meaning it has no official medicinal use.  The U.S. DEA has balked at rescheduling marijuana on several occasions, including efforts that failed to reschedule last month, August 2016.  However a senior policy adviser to Democratic Presidential candidate Hillary Clinton has mentioned that Mrs. Clinton would reschedule cannabis should she win office – in order to allow more research to be performed.

In Canada, current Liberal Prime Minister Justin Trudeau campaigned on a promise to legalize recreational marijuana – a policy stance that won favor of voters in last year’s Canadian election.  The Trudeau government has said that it will introduce recreational marijuana legalization legislation by the spring of 2017.

More news here: http://www.businessinsider.com/r-canada-to-press-us-on-ludicrous-marijuana-border-policy-2016-9?r=UK&IR=T

 

Technical 420, a cannabis stock watching service recently published an excellent article titled: 3 Overlooked Benefits of Cannabis that Could Improve Life for Millions.  

Mentioning potential benefits for Cancer, Fibromyalgia and Epilepsy patients, the article mentions that since the DEA balking at cannabis rescheduling last month (August 2016) the cannabis and cannabinoid-based biotech stocks have “been soft”.  The article mentions that some of the weakness in cannabis stocks has “been overdone”.

Stocks mentioned include GW Pharmaceuticals, Insys Therapeutics, Zynerba, Cara Therapeutics and Medical Marijuana Inc.  Technical 420 has seen that our company, Medical Marijuana Inc., is a diversified holding company that offers 4 divisions dedicated to nutraceutical sales of hemp-based non-psychoactive cannabidiol and then two divisions that are in pharmaceutical development: AXIM Biotech and Kannalife Sciences, Inc.  Although both MJNA divisions are at early stage, it is interesting to see Technical 420 consider our company to be in the “stocks to watch” category – alongside these active pharma development enterprises.

More here: https://technical420.com/cannabis-article/3-overlooked-benefits-cannabis-could-improve-life-millions#

 
To good health,

Stu

Stuart W Titus, PhD

President & CEO

Medical Marijuana Inc. (OTC: MJNA)