With a suite of more than 30 innovative medical products already commercialized to its name, Avicanna Inc (TSX:AVCN, OTCQX:AVCNF) has a track record of success when it comes to developing and bringing to market plant-derived, cannabinoid-based wellness, medical and pharmaceutical products.
The Toronto-based biopharmaceutical company currently makes sales in 18 international markets across four main market segments: medical cannabis and wellness products; CBD derma-cosmetic products; pharmaceuticals; and cannabis raw materials, seeds, and bulk formulations.
Avicanna CEO Aras Azadian told Proactive that the company’s focus on medical cannabis afforded it a greater reach in a less crowded market. “Recreational companies are substantially limited because they aren’t permitted to export and are generally confined to their local market,” he said. “In the United States, these products can’t even cross state lines.”
READ: Avicanna closes strategic non-brokered private placement offering of units for aggregate gross proceeds of approximately $2.782M
Azadian explained that Avicanna is not only competing with the cannabis sector but is looking to disrupt industries such as dermatology, oncology, and neurology “We’ve spent years on research and development and clinical development and have always been focused on this,” he said.
Avicanna is also exploring emerging opportunities outside the cannabinoid space, having recently made moves towards expanding its scope horizontally to include other next-generation alternative pharmaceuticals such as functional mushroom products. In July 2022, the company partnered with Emotional Intelligence Ventures to develop and commercialize Psilly branded functional, fungi-based products in the form of consumer-friendly and single-dosed products. “We see an exciting emergence of functional mushrooms or fungi products,” Azadian said.
Azadian believes that Avicanna can bring these superior, revenue-generating products to the market quickly. “We have a scientific platform that we’ve established for the last seven years that includes drug development, preclinical and clinical development, and commercialization, so we have a track record taking products from concept through research and development into various international markets."
Revenue drivers
As Avicanna executes its global commercialization strategy, Azadian said the company is set to achieve its 2022 revenue goal of $6 million. For the six months ending June 30, 2022, the company reported a 101% increase in year-over-year revenue to $2.14 million, supported by increased international and licensing revenue and commercialization progress in Canada. According to Azadian, the company is set to start generating revenue on the pharmaceutical side of the business early next year.
Another area of the business expected to drive revenue growth in the near term is re+PLAY, a CBD performance-based topical wellness and recovery brand created using Avicanna’s proprietary deep tissue technology for cannabinoid delivery that was recently endorsed by the National Basketball Players Association. Avicanna will earn royalties for its technology, supplying CBD in the US market, in addition to commercializing re+PLAY in Canada.
Azadian said this exciting development is just the beginning for Avicanna as the company ramps up its footprint in the functional consumer products space. “Our vision is to have functional consumer products such as sports recovery topicals available over the counterThis can be a significant revenue driver for us, especially in the coming years as pharmaceutical pathway products are expected to require more time.”
Current and future markets
Although Avicanna operates in 18 international markets, about 70% of its revenue comes from its Canadian operations where the company has 21 products available on the medical cannabis portal of the country’s largest pharmacy chain Shoppers Drug Mart. “Canada’s a very important source of revenue for us in terms of achieving profitability, establishing our brands, and fortifying a proof of concept in terms of how good these products are and how well they function for various clinical indications,” Azadian explained.
“Other markets are still in the relatively early stage, while Canada is a more mature market and we’re already seeing some higher traction in terms of sales and a faster route to market.”
READ: Avicanna highlights 101% year-on-year increase in revenue for the six months to June 30, 2022
In terms of expansion into new markets, Azadian said Avicanna is very well positioned to take advantage of emerging and growing medical cannabis markets worldwide. Giving the company an edge are its industry-leading and proprietary products, and its education packages which Avicanna provides to physicians in the medical communities of these emerging markets. “This is very important in terms of convincing naive physicians and the greater medical community that these products can help their patients,” Azadian explained. “We can also provide them with the preclinical work and clinical studies that we have in place, science and evidence they do not expect to see from cannabis-related companies.”
He added that the company offered physicians a full formulary of products, including capsules, tablets, sublingual sprays, transdermal gels, and localized creams with various ratios and doses of cannabinoids. “We have the full kit of products for patients across a broad range of indications,” Azadian said.
The company’s vertical integration model, with its established cultivation and extraction infrastructure in Santa Marta, Colombia, has also positioned it to offer competitively priced products in the international markets.
Research pipeline
On the research and development side, Avicanna is consistently pursuing drug development for a range of different indications, the most advanced being a topical cream designed to treat a group of rare skin diseases called Epidermolysis bullosa. The cream is currently enrolled in an observational real-world evidence trial at the Hospital for Sick Children (SickKids) in Toronto, which is expected to wrap up at the end of the year. “If the results are promising, we will proceed to a Phase II study and on towards orphan drug designation,” Azadian said.
The company is also developing products for epilepsy, multiple sclerosis, anxiety, and neuropathic pain. “It’s an extensive pipeline," Azadian said, "but what’s exciting is that most of these drug candidates have been already developed, characterized, and are commercialized or are near-commercialization in the medical cannabis channels, which acts as an incredible proof of concept."
Contact the author at emily.jarvie@proactiveinvestors.com
Follow her on Twitter @emilyjjarvie