This pharma firm could profit big in a wide open field for cannabis-based pharmaceuticals…
Medical cannabis, that is, raw cannabis, its derivatives, and its analogs when recommended or prescribed by a licensed medical professional for therapeutic purposes, is a significant driver in the current explosive expansion of the broader marijuana industry.
In fact, some analysts suggest sales are increasing at a compound annual growth rate (CAGR) of 23.9% and will top $55 billion by 2024.
That’s an eye-popping market for investors. But finding an entry point may be more daunting and complicated than you might, at first, expect.
It begs the question…
Which segment of the medical cannabis market offers the most opportunity while still limiting risk?
Is it growers and suppliers of whole-plant products?
Is it manufacturers who transform cannabis plants into more controllable or easy-to-use forms of administration/ingestion, such as foods, beverages, capsules, lotions, or vapes?
Or is it companies that produce over-the-counter products containing hemp derivatives, such as CBD?
How do you find the best profit opportunities?
Prescription Cannabinoid Drugs
In the long run, this is where the real money is: the medical cannabis market subsector.
You can find in-depth analysis and the most current updates on all cannabis companies in this subsector in The Vault. With over 150 company reports and our easy-to-use rating system, you’ll know everything you need to know about the companies staking a claim in the soon to be $1 trillion U.S. Market. You’re free to give yourself this edge – the choice is yours.
In any case, the FDA has already provided a dependable and legal regulatory pathway to get these potent drugs into the hands of patients, and successful new drugs have demonstrated time and again that they can earn billions of dollars for their manufacturers – and make a lot of investors wealthy along the way.
This sector of the cannabis market is on track to grow 15 times faster than the overall industry. To find out more information, just go here now.
The path, of course, is not easy. In order to get marketing approval from the FDA for any new drug, you need to go through a standard set of studies in at least three phases (sometimes four) to prove the drug is safe and effective:
Phase-1 studies are done with 20-100 people, often healthy volunteers. The purpose is to demonstrate safety of the drug and begin to establish dosage.
Phase-2 trials use the new drug on several hundred sick patients to look at efficacy and side effects.
Phase-3 trials are done on 300-3,000 sick patients, and again they look at efficacy and monitor adverse events. Efficacy generally means a drug proves it can work better than placebo, or better than current drugs to treat a disease or condition. “Work better” means with 95% certainty.
The entire process can take 7-12 years. If – and that’s a big “if” – the new drugs prove safe and effective at every step of the way.
So, choosing a drug that is likely to complete the regulatory journey and then go on to achieve reimbursement status from insurance companies, not to mention the interest and confidence of prescribing physicians, can be tricky.
Generally, firms will present the data from these studies at scientific meetings and symposiums. Later, they publish them in a peer reviewed medical journal. So to evaluate the new drug, you’ll first need to go through the data releases and available poster presentations, and decide if the studies are well designed, properly randomized and executed, have meaningful endpoints, and achieve or fail to achieve those endpoints in a statistically significant and clinically meaningful way.
Obviously, all of this can be a challenge for investors unfamiliar with reading and evaluating scientific material.
So you may need some help. And that is one of the services we provide through our alert service, Biotech Insider Alert.
The Current State of Prescription Cannabis Drugs
So far, the FDA hasn’t approved any marketing application for raw cannabis in the treatment of any specific disease or condition. It has, however, approved one cannabis-derived and three cannabis-related prescription drug products.
The cannabis derived product is Epidiolex, which contains a purified form of the drug substance CBD for the treatment of seizures associated with two rare disorders: Lennox-Gastaut syndrome or Dravet syndrome in patients two years of age and older.
As for the cannabis-related drugs, the agency has also approved Marinol and Syndros for the treatment of anorexia associated with weight loss in AIDS patients. Both drugs include the active ingredient dronabinol, a synthetic form of delta-9- tetrahydrocannabinol (THC) which as I mentioned before, is the psychoactive component of cannabis.
The third cannabis-related drug, Cesamet, contains the active ingredient nabilone, which has a chemical structure similar to THC and is synthetically derived. It treats nausea and vomiting caused by cancer chemotherapy.
So, thus far, the list is short, but it demonstrates that the agency is ready and willing to approve cannabinoid drugs. It also suggests that the field is wide open and eager for new product candidates.
An Interesting Company
With a $2.74 billion market cap, ARNA falls into the small-to-mid-size range, which means it has plenty of room to grow.
With a Beta of 1.11 (slightly higher than average indication of volatility) and short interest at only 7.5%, the company is currently experiencing solid confidence among investors.
ARNA has a broad array of pharmaceutical products in its portfolio, a diverse pipeline of new products under development, and it’s in the early stages of its cannabis drug program. So it’s a mature company and offers a certain amount of investor protection as it’s unlikely to completely sink if a new drug fails in clinical trials. On the other hand, it offers great opportunity to folks interested in getting into the medical cannabis game at an early stage.
ARNA’s cannabinoid drug is called Olorinab (APD371). It’s administered orally and acts as a full agonist of the cannabinoid type 2 receptor (CB2). Agonists are drugs that fully activate molecular receptor sites on the surfaces of tissue cells. Cannabinoid type-2 receptors are sites that exist naturally in the human body and bond with molecules in cannabinoid substances. Olorinab is a cannabis related drug developed by ARNA, not a cannabis extract.
Arena is exploring Olorinab for development in several indications, including visceral pain. This compound, through its selectivity for CB2, is designed to provide pain relief without psychotropic effects and without the potential for dependence or abuse.
Thus far, the drug has undergone a randomized, open-label, phase-2a clinical trial to evaluate the safety, tolerability, and pharmacokinetics of two dose levels in the treatment of gastrointestinal pain due to either inflammatory bowel disease (IBD), aka Crohn’s disease and ulcerative colitis, or irritable bowel syndrome (IBS). Phase 2b planning is ongoing.
For investors, this is a great way to get into the explosively expanding medical cannabis market, with enormous upside potential and relatively small risk.
Advisory Board Member, National Institute for Cannabis Investors
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2 responses to “Pharma Firm Takes the Lead on Tailored Cannabis Treatment”
June 14 2019