Biosynthesis Technology Could Transform Cannabinoid Production

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Sep 13, 2017, 08:30 ET

NEW YORK, September 13, 2017 /PRNewswire/ --

The upward trajectory of the cannabis industry has garnered comparisons to the Internet boom of the early 2000s, as North American sales are on pace to record a compound annual growth rate of 25 percent through 2021, according to Arcview Market Research (1). These comparisons are certainly attention-grabbing, but the full potential of the evolving marijuana market could be even larger. InMed Pharmaceuticals, Inc. (OTC: IMLFF) (CSE: IN) (IMLFF Profile), a Vancouver-based biopharmaceutical company, has developed a robust, high-yield biosynthesis process capable of enabling the manufacture of all 90+ naturally-occurring cannabinoids found in the cannabis plant. This could be a game changing development for companies operating within the burgeoning sector, including Axim Biotechnologies, Inc. (OTC: AXIM), GW Pharmaceuticals (NASDAQ: GWPH), Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) and pharmaceutical heavyweight Eli Lilly and Company (NYSE: LLY).

Perhaps the clearest way to demonstrate the potential of an effective cannabinoid biosynthesis platform is to study a more established product - bio-synthetic insulin. Healthline estimates that 29.1 million people in the United States have diabetes, with diagnosed cases costing the country an estimated $245 billion in 2012. Although the chronic disease accounted for nearly 1.6 million deaths in 2015, according to data from the World Health Organization, a scientific breakthrough in 1921 greatly improved the survivability of diabetes. As documented by a contributor to The Seed Investor, it was then that a team of Canadian researchers discovered a way to process pig pancreases into a human insulin replacement.

While this discovery certainly improved the outlook for diabetes sufferers, it was just the first step toward the insulin market as it exists today. Originally, pharmaceutical insulin was produced directly from the organs of pigs, with it taking roughly '5,000 pig pancreases to produce just eight ounces of insulin'. Put simply, this process was expensive and time-consuming, and, while producer Eli Lilly and Company certainly capitalized on the breakthrough, a discovery in the 1970s once again changed the game. A small biotechnology firm called Genentech used recombinant DNA techniques to successfully produce a bio-synthetic 'human' insulin, making it the first human protein to be manufactured through biotechnology. In addition to being significantly cheaper to produce than animal-derived alternatives, this synthetic insulin was shown to cause less allergic reactions in patients. Within a few years, biosynthetic insulin replaced the vast majority of animal-based alternatives, and the companies at the heart of the innovation have reaped the rewards. Genentech was acquired by Roche Holdings for $48 billion in 2009, while a 2014 report from Transparency Market Research predicted that the global insulin market will reach $32.24 billion by 2019.

Parallels between the insulin market of the 1960s and today's pharmaceutical cannabinoid industry are too clear to be ignored. Cannabis biotech companies are currently producing millions of plants each year in order to extract the cannabinoids that are central to their products and development candidates. However, maintaining the controlled conditions required to produce consistent plants is both costly and time-consuming, and competitive market conditions in drug development cost will see these pressures from growing and manufacturing expenses. Agricultural and Capital Expense cost are high, from Land, facility costs with high-efficiency lighting systems and sophisticated greenhouse production facilities, investors are pouring millions of dollars into pot production. The cost for the cannabinoids, the active pharmaceutical ingredients (API's) needed in cannabis drug development are staggeringly high. InMed Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF), with its innovative biosynthesis technology utilizing modified E-coli bacteria, could be approaching the introduction of a cheaper and better alternative for providing the API's in the massive industry's cannabinoid-focused segment following its filing of a provisional patent application pertaining to the technology earlier this week.

Potential benefits of biosynthesis of cannabinoids are wide-ranging, as InMed Pharmaceuticals notes in its corporate presentation. The cost savings versus traditional growing and extraction methods are certainly noteworthy (and they echo the benefits of bio-synthetic insulin nicely), but monetary benefits are just the tip of the iceberg. Because the cannabinoids produced using InMed's proprietary manufacturing techniques are bioequivalent to the naturally-occurring compounds, biosynthesis could enable enhanced quality control and purification. Importantly, the technology could be key in unlocking the minor cannabinoids that are currently economically unfeasible to produce and comprehensively study. The company estimates that its cannabinoid biosynthesis process, a method that's been likened to a 'pharmaceutical copy machine' for its ability to produce bioequivalent compounds.

"This novel approach to the biosynthesis of cannabinoids is a game-changer for drug development. The importance of producing cannabinoids that are identical to the naturally occurring compounds cannot be overstated. Many drug development efforts with synthetic derivatives have failed," Dr. Vikramaditya Yadav, Assistant Professor of Chemical and Biological Engineering at University of British Columbia, a co-inventor of the biosynthesis technology, stated in a recent news release (http://nnw.fm/Z30dH). "In our extensive experimentation, the E. coli system is more robust and more efficient for the manufacturing of cannabinoids as compared to other microbial platforms."

Links between Eli Lilly's early ventures in the synthetic insulin market and InMed's current forays into cannabinoid biosynthesis were reaffirmed by InMed's January 2017 appointment of Martin Bott to its board of directors. Following Bott's appointment, market analysis firm CFN Media called the move "a strong vote of confidence for InMed's future." Bott has worked at Eli Lilly for nearly 30 years prior to his appointment to the InMed board, overseeing the drug giant's investment of more than $1 billion into biosynthesis research. As InMed President and CEO Eric A. Adams noted in a news release following the addition, "Martin Bott has established a significant leadership position in financial and business expertise with one of the world's leading pharmaceutical companies. His depth of knowledge in navigating the complexities in healthcare finance and operations on a global level will be invaluable to InMed."

InMed's intellectual property portfolio also includes a promising drug development pipeline targeting unmet medical conditions using non-THC cannabinoids. The company's lead candidate, INM-750, is currently being evaluated as a topical treatment for epidermolysis bullosa, an orphan pediatric disease, characterized by extremely fragile skin, that has no currently approved therapies. InMed estimates the market potential of INM-750 at $1 billion, with phase I clinical trials scheduled to begin in 2018. The company is also developing INM-085 for the treatment of glaucoma, a serious eye disease with a global market valued in excess of $5 billion. INM-085 is currently being evaluated in pre-clinical studies. These drug candidates further strengthen InMed's position within the burgeoning cannabis sector, providing an additional application for its groundbreaking biosynthesis platform.

The activity of other cannabis industry players highlights the huge market potential of InMed's novel approach to cannabinoid biosynthesis. Axim Biotechnologies, Inc. (OTCQB: AXIM) is currently developing a diversified and robust clinical pipeline of cannabinoid-based products. Its most advanced program is its phase II clinical trial of its MedChewRx™ chewing gum for the treatment of irritable bowel syndrome. Axim anticipates completing this trial in the near-term and advancing toward a pivotal phase III clinical trial by early next year.

Coinciding with this advancement, Axim has made numerous moves in recent months to secure the needed supply of cannabinoids required to evaluate the efficacy of its development pipeline. In addition to importing pharmaceutical-grade hemp oil from Italy, Spain and Denmark, Axim recently purchased land in the Netherlands in order to facilitate the construction of a state-of-the-art manufacturing facility. Per the company's website, "Axim is in the process of developing a unique extraction and freeze-drying technology for production of molecularly/genetically controlled-therefore extremely pure-pharma-grade cannabinoids extracted from industrial hemp." As noted in a November 2016 news release, this platform will focus primarily on the extraction of THC, the most commonly known cannabinoid derived from the cannabis plant.

GW Pharmaceuticals (NASDAQ: GWPH) is well-known within the cannabis industry as the company behind the world's first prescription drug derived from the cannabis plant, Sativex®, which is approved for the treatment of spasticity due to multiple sclerosis in 28 countries worldwide. The company's lead cannabinoid product candidate is Epidiolex®, a liquid formulation of pure plant-derived cannabidiol being developed for the treatment of a number of rare childhood-onset epilepsy disorders. As noted on its website, GW is currently in a "unique position to develop and manufacture plant-derived cannabinoid formulations worldwide at sufficient quality, uniformity and scale," but some analysts have expressed doubt regarding the sustainability of this model. In an article published last year by Seeking Alpha, a contributor noted the recent fall in CBD prices concurrent with increasing supply. "The popularity and history of cannabis growing, combined with the large amounts of arable land, cheap pharmaceutical manufacturing, and cheap labor in India should scare anyone invested in hemp farming," the article states. "The price-points we are seeing now don't seem sustainable." Synthetic cannabinoids, as produced through InMed's proprietary biosynthesis platform, could provide a long-term solution to this issue.

The recent activity of Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE) reiterates the potential marketability of InMed's platform. Zynerba's shares plummeted to 52-week lows last month after the company announced disappointing top-line results from its phase II study of ZYN002, marketed as the first and only synthetic CBD formulated as a patent-protected permeation-enhanced gel for transdermal delivery through the skin and into the circulatory system. As noted on its website, Zynerba's product candidates are "synthetically manufactured per FDA/CGMP regulations" in an effort to "provide consistent potency and eliminate impurities in the product." Similar to InMed's biosynthesis platform, Zynerba's manufacturing techniques offer several advantages over botanically-derived cannabinoids, dodging "the natural resources and security measures required to grow Cannabis, as well as the strict batch controls required by regulatory agencies in pharmaceutical manufacturing."

A report published by the National Institutes of Health affirms that cannabinoids have a very high therapeutic index with low toxicity, and the market is currently filled with companies looking to translate these benefits into returns for shareholders. Since the 1980s, when Eli Lilly and Company (NYSE: LLY) developed a synthetic THC product called Nabilone to treat nausea associated with chemotherapy, demand for biosynthetically-produced cannabinoids that are bioequivalent to those that occur naturally within the cannabis plant has been on the rise. InMed Pharmaceuticals could be approaching this breakthrough with its robust, high-yield biosynthesis process, presenting an enticing opportunity for investors looking to capitalize on rising demand for cannabinoid-based pharmaceuticals.

Editorial Sources:

Arcview Research http://nnw.fm/OHz8c

For more information on InMed Pharmaceuticals, Inc. please visit: InMed Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF)

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