A blockbuster deal announced earlier this week could be a sign of a bright future for cannabidiol-oriented pharmaceutical companies.
On Wednesday, cancer therapy developer Jazz Pharmaceuticals PLC (NASDAQ:JAZZ) struck a US$7.2 billion agreement with UK-based GW Pharmaceuticals PLC (NASDAQ:GWPH), makers of childhood epilepsy treatment Epidiolex, the first cannabis-based medicine approved in the US.
Market watchers say the deal may lend further legitimacy to a growing segment of cannabis companies that focus on pharmaceutically produced products, like Canada’s Cardiol Therapeutics Inc (TSE:CRDL) (OTCQX:CRTPF).
READ: Cardiol Therapeutics is commercializing its THC-free cannabidiol formulation to treat heart disease
The Canadian specialty pharmaceutical company has developed a proprietary formula of ultra-pure pharmaceutical cannabidiol (CBD) that does not contain THC - less than 5 parts per million (ppm) - and consequently none of the psychotropic effects of THC.
Its flagship product, CardiolRx, is formulated to be one of the safest and most consistent CBD medicines available on the market. CardiolRx has been developed and manufactured to the highest standards of cGMP to ensure consistency, stability, and purity in every dose.
Cardiol’s stock has climbed 18.9% since the Jazz-GW announcement on Wednesday morning, a sign that investors are keeping a close eye on the Oakville, Ontario-based company.
CEO David Elsley hailed the deal, calling it a “major validation” for cannabidiol as a medicine.
“(This week’s) announcement is confirmation by the pharmaceutical industry of the value of GW’s franchise in pediatric medicines – they’ve done tremendous work in the area – but this really serves as a validation for all companies working in this new, important area of medicine,” Elsley told Proactive. “It’s a real tailwind for the industry and it’s going to shepherd in great things to come.”
READ: Cardiol Therapeutics completes Phase I trial of lead drug CardiolRx
Cardiol is also developing a proprietary subcutaneous formulation to uniquely deliver pharmaceutical cannabidiol to sites of inflammation in the heart associated with heart failure, a major healthcare burden in North America, costing the US healthcare system over US$30 billion a year.
While advancing important clinical trials in inflammatory heart disease, Cardiol is generating a near-term revenue opportunity in the growing Canadian medical cannabinoid market, currently exceeding $600 million annually, with its recently launched commercial product, Cortalex, the first THC-free extra-strength formulation of cannabidiol oil available across Canada exclusively online at Medical Cannabis by Shoppers.
What’s more, the company is advancing a Phase II/III double-blind, placebo-controlled clinical trial studying the potential and safety of CardiolRx in 422 hospitalized COVID-19 patients with a history of, or risk factors for, cardiovascular disease. The trial will take place at major US centres.
“We are in the early phases of an entirely transformational industry,” Elsley said. “This area of medicine is very powerful.”
Elsley noted that Cardiol’s work has demonstrated CardiolRx’s ability to protect cardiac tissue. “We believe this is the beginnings of an entirely new way to address heart disease and heart failure, which are devastating diseases that claim millions of lives a year,” he said.
The Jazz-GW deal is a definite indicator of how much appetite there is for cannabidiol-based treatments in the pharmaceutical industry. For Cardiol, which is valued at around C$132 million as of press time, there is still a lot of room to grow.
“At Cardiol, we’re taking the same molecule and formulating it pharmaceutically in both an oral and subcutaneous formulation to target the leading causes of death today,” Elsley said. “I believe this is recognition of the value that we’re bringing and is going to support both our efforts and those of other organizations doing work in other important diseases.”
Contact Angela at angela@proactiveinvestors.com
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