The latest aspirant to the bulging listed medical cannabis sector is bow-wow-wowing to a new trend of developing veterinary drugs over human therapies. But there are regulatory implications for all the pot stocks.
Putting a new slant on the term dopey animals, CannPal is girding to list next month with a focus on cancer-related pain, which means leaving in the psychoactive component tetrahydrocannabinoil (THC).
The ‘hounds on hooch’ play shapes up as a stern test of the listed dope sector, which has seen a reality check on sky-high valuations in last few months. But given CannPal’s $6m raising is likely to close early and oversubscribed, punters are still receptive to a decent pitch.
CannPal will be the first ASX-listed pure-play animal health pot stock and – as far as we can see – the only one globally. Despite the hype around the medical dope sector, there are no approved animal drugs and only one authorised whole-of-plant human drug, the multiple sclerosis spasticity treatment Sativex.
Animal health has the advantage of a faster route to regulatory approval, while still being a huge addressable market. The truth about cats and dogs is that pets are living longer, which means that close to half of all dogs and one-third of cats die from cancer.
In the US alone there are 78m dogs, 86m cats, not to mention several hundred million cat memes. Doting owners spend $US60bn a year on these four-legged dependents, yet there’s a paw-city of treatments for many ailments.
CannPal has launched an offer to raise $6m at 20c apiece, ascribing a total market valuation of $18.5m.
Company founder Layton Mills says pain is the obvious target because the current non-steroidal treatments “come with a huge laundry list of side effects and toxicity.”
CannPal’s lead candidate, CPAT-01 is targeting osteosarcoma (bone cancer) pain in dogs, but is also investigating broader canine pain as well as appetite stimulation and joint health (no pun intended).
CannPal awaits ethics approval to begin a local safety pilot study in collaboration with the veterinary research organisation Invetus. The study will treat at least 48 dogs (beagles and fox hounds if you really need to know) with THC and cannabinoils. In the US CannPal has won the confidence of the Centre for Vet Medicine, the Food & Drug Administration’s animal health arm that waived the usual $US100,000 new drug application fee.
Mills says US medical cannabis regulation is at an inflection point because a new human epilepsy treatment called Epidiolex is in advanced phase-three trials (while European regulator approved Sativex in 2010, it is not FDA approved).
Results from a phase-three clinical trial for GW Pharma’s Epidiolex focused on Dravet syndrome, a rare form of childhood epilepsy and showed impressive results in reducing the incidence of seizures.
If the FDA approves the drug after an expected application, the whole legal status of cannabis in the US may have to be reviewed.
While several states have legalised weed for medicinal and recreational purposes, cannabis remains classed as schedule one: the most serious category of illegal substances along with the likes of heroin, ecstasy and LSD.
Meanwhile, plenty of pet owners are treating their pets on the sly with either legally or illicitly procured dope. As for the vets, the dearth of clinical research means they’re reluctant to voice an opinion on whether mulling up for Molly is a good idea or not.
Locally, fellow ASX-listed Creso Pharma is also pursuing animal health applications, but in hemp-derived nutraceuticals (such as food additives).
CannPal itself has a “strategic collaboration” with the ASX listed Zelda Therapeutics to share clinical data, but with Zelda pursuing human applications.
Further reflecting the tight nature of the sector, Zelda’s co-founder, Mara Gordon is on the CannPal board. The CannPal offer is backed and advised by the Perth-based Merchant Opportunities Fund, which holds 27.5 per cent of CannPal and a likely 19 per cent post-listing.
The fund also invested in the first ASX-listed cannabis stock Phytotech (now MMJ Phytotech).
The offer was to have closed on Oct 6, with a proposed Oct 19 listing date.