The term "medicinal marijuana" is currently undergoing a serious evolution. The discovery of the human body's endocannabinoid system has unlocked a wide new array of potential medical applications for the marijuana plant. Several promising young companies are currently hard at work isolating chemical compounds found in cannabis, extracting them, and processing them into medical treatments for serious diseases.
As a part of our special feature series The Future of Cannabis, we're highlighting companies for our readers to take a closer look at. There's a clear risk to investing in these companies at such an early stage in their development, but one that comes with the potential for big rewards if these companies take off.
So here's a look at five companies that could be argued to be among the "best of breed" within the biotechnology sector of the cannabis industry. To read more about this sector, checkout our feature article for week two of The Future of Cannabis, and visit The Future of Cannabis home page for links to all of the videos, articles, and interviews we're featuring.
GW Pharmaceuticals Plc (GWPH)
Market Cap: $1.94 billion
GW Pharmaceuticals is an established leader in the cannabis biotech sectorwith a treatment already on the market and more promising new drugs in its pipeline, making it a more stable investment compared to the small-cap biotech market.
The company traces its origins to 1988, when Dr. Geoffrey Guy and Dr. Brian Whittle obtained what was, at the time, the only cultivation license issued in the United Kingdom. They have certainly seized the opportunity, since. The company currently markets Sativex® for treatment of spasticity due to multiple sclerosis. Sativex® has been launched in 15 countries, including the United Kingdom, Spain, Italy, and Germany, and is receiving approval from another 12.
However, the current excitement surrounding GW Pharma is largely focused on their development of Epidiolex, which has Orphan Drug status for treatment of Dravet syndrome, Lennox-Gastaut syndrome, and tuberous sclerosis using CBD. GW Pharmaceuticals’ stock has been generating extraordinary returns for some time, rising 1000% over the past five years, including a 35% increase over the last year.
Insys Therapeutics, Inc. (INSY)
Market Cap: $2.31 billion
Insys Therapeutics is not exclusively committed to developing cannabinoid-based medications. It’s currently marketing Subsys, an opioid analgesic called fentanyl delivered via Insys’ sublingual spray drug delivery technology. Subsys is used to relieve peak pain for cancer patients, with the spray generating fast-acting results via transmucosal absorption..
However, Insys’ other three drugs, one currently on the market and two in the product pipeline, all utilize cannabinoids in their treatments. The Dronabinol SG Capsule is a generic version of AbbVie’s (ABBV) Marinol®. Dronabinol is a synthetic analogue of THC that is used to help stimulate appetite in HIV/AIDS patients as well as cancer patients undergoing chemotherapy.
Insys’ product pipeline includes a cannabidiol oral solution under develoment for the treatment of Dravet syndrome and Lennox-Gastaut syndrome under the Orphan Drug program as well as a Dronabinol Oral Solution that could have advantages over the Dronabinol SG Capsule.
Like GW Pharma, Insys has both promising drugs in its pipeline and money makers that are already on the market. Last year, the company more than doubled its revenue, following the previous year’s year-over-year revenue growth of nearly 550%, and looks on pace to significantly grow revenue again this year.
Zynerba Pharmaceuticals, Inc. (ZYNE)
Market Cap: $127.8 million
Zynerba, the successor company to AllTranz, Inc., is the most recent addition to the public cannabis biotech sector, and one of the few companies in the industry that went public through an initial public offering. AllTranz was bought and new management with significant expertise was brought on in order to run the company. Zynerba began trading on the NASDAQ exchange in August 2015 after closing its IPO.
Zynerba is dedicated to developing synthetic cannabinoid therapeutics for transdermal delivery for patients with significant unmet needs.The company is currently evaluating two patent-protected product candidates, ZYN002 and ZYN001. ZYN002 is the first and only synthetic CBD formulated as a patent-protected permeation-enhanced gel for transdermal delivery for the treatment of refractory epilepsy, Fragile X syndrome, and osteoarthritis. ZYN001 is a pro-drug of THC that enables transdermal delivery via a patch. Zynerba is studying ZYN001 in patients with fibromyalgia and peripheral neuropathic pain.
Nemus Bioscience, Inc. (NMUS)
Market Cap: $15.62 million
Nemus Bioscience is focused on discovering, developing, and commercializing novel and proprietary drug candidates utilizing cannabinoids.
Nemus is currently the only partner of the University of Mississippi for the development and commercialization of drugs derived from cannabis extracts or cannabinoids. The University of Mississippi is the only U.S. entity authorized by the federal government to cultivate cannabis on behalf of the federal government, as well as holding aDEA registration to conduct cannabis research and previous DEA registrations to cultivaite cannabis and manufacture extracts for the development of drug candidates. Nemus renewed its partnership with the University of Mississippi in July 2015.
Nemus is currently researching and developing five product candidates. TwoNB1111 for treating glaucoma and NB2221 for treating spasticity in multiple sclerosis, are in the preclinical stage. Three others,NB51R1 targeting anxiety, NB23R1 targeting epilepsy, and NB31R1 targeting methicillin-resistant Staphylococcus aureus (MRSA), are in the research stage.
Nemus has not yet generated significant revenues from its operations. However, through its partnership with the University of Mississippi and its management’s expertise in drug development, Nemus appears poised to take full advantage of the growing cannabis biotech opportunity.
InMed Pharmaceuticals, Inc. (IN:CNX) (IMLFF)
Market Cap: $5.78 million
InMed Pharmaceuticals utilizes a “network-based platform” for the identification of novel plant-based (including cannabis-based) therapeutics. This process utilizes comprehensive algorithms to integrate data from numerous bioinformatics databases, a database on the structure of currently approved pharmaceutical products, and an extensive database of over 200,000 phytochemicals (including phytocannabinoids) in order to more effectively and efficiently select active compounds for the treatment of targeted diseases.
InMed’s network approach allows it to save valuable resources (time and money, specifically) that are involved in the tenuous research and development process for drug identification. By leveraging data and analytics, InMed can sift through larger amounts of prospective drug candidates in order to more likely identify a viable therapeutic.
Currently, InMed has two products in its pipeline: INM-750 for the treatment of epidermolysis bullosa, and INM-085 for the treatment of glaucoma. INM-750 is a topical formulation based on polymer nanotechnology currently in the preclinical stage that is designed to suppress pathological skin growth, differentiation, and inflammation in epidermolysis bullosa. INM-085 contains a proprietary mixture of cannabinoids and non-cannabis-based active ingredients, also in a topical formulation, that has been designed to be applied directly to the eye. This formulation was developed through 12 months of discovery and preclinical studies in order to develop a safer formulation for lowering interocular pressure.
You can read more from our special program The Future of Cannabis here. To find out why Equities.com and Viridian Capital Advisors launched this program, be sure to read What is The Future of Cannabis?? This program was made possible by the support of our sponsors.Click here for a full list of our sponsors.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer