ASX cannabis stocks making almighty push for approval with clinical trials
Winning approval for cannabinoid products is a monumental task, with none having reached over-the-counter status. But these ASX stocks are working on it.
In theory, cannabinoid products can be sold over the counter at pharmacies, but more than two years after Australian rules changed, no company has managed to clear tough regulatory hurdles.
The good news is that many ASX stocks are well advanced with trials that could open the door to lucrative markets in Australia, the US and elsewhere.
It’s about scientific proof of a treatment embraced by many cultures in the past.
For thousands of years, the plant has been recognised for its medicinal attributes.
Dating as far back as 2800BC, cannabis was employed in the treatment of diverse health conditions and was included in Emperor Shen Nung’s ancient pharmacopoeia.
Nung is considered the father of Chinese medicine and believed to have invented the treatment of acupuncture.
But cannabis hasn’t been without its controversies and throughout much of the 1900s was largely demonised and as a consequence out of favour for medicinal use.
However, stigma associated with cannabis-based medicine and health products is well and truly abating.
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In light of the increasing global recognition of medicinal cannabinoids, Australia’s Therapeutic Goods Administration (TGA) reclassified low-dose cannabidiol (CBD) from a prescription medication (Schedule 4) to a pharmacist-only medicine (Schedule 3).
The decision enabled TGA approved low-dose CBD containing products included on the Australian Register of Therapeutic Goods (ARTG) for use in adults, to be supplied over-the-counter (OTC) by a pharmacist, without a prescription from February 2021.
As well as being on the ARTG, must meet an allowed dosage of 150mg a day.
It all sounded good in theory but there are still no TGA cannabinoid approved products that meet the Schedule 3 criteria.
The requirement that all Schedule 3 cannabinoid medications have to be included on ARTG has faced criticism, given that scientific proof of efficacy is a primary prerequisite, and that requires arduous, expensive and time consuming clinical trials.
Trials are generally divided into three phases with Phase 1 focusing on safety, Phase 2 testing for effectiveness and Phase 3 examining whether the new drug is an improvement on existing treatment.
Worth reading Clinical Trials 101: How to know your placebos from blinded studies
Medicines not included on the ARTG are known as unapproved medicines and according to the TGA have not been evaluated by the authority for quality, safety and effectiveness.
Unapproved CBD medicines can continue to be accessed via the Special Access Scheme (SAS) or Authorised Prescriber (AP) scheme on prescription only.
The list of cannabis companies providing medicinal cannabis products under the SAS and AP schemes is long.
“There is an abundance of cannabis derived products available in Australia, including CBD products,” Neurotech (ASX:NTI) executive director Dr Thomas Duthy told Stockhead, adding he’d noticed a significant uptick in fines issued by the TGA to companies making false or misleading medical claims relating to their cannabis-derived products.
Furthermore, Duthy said that since July 2023, under the TGA’s TGO 93 cannabis reforms, manufactured products for sale had to comply with good manufacturing practice (GMP) which may be an impost for some companies who source overseas material.
“We find it difficult to understand where the sustainable competitive advantage lies for such products unless it’s cost-related,” he said.
“Hence, we are following the more time-consuming and more expensive regulated drug product pathway for NTI164 noting the substantial back-end rewards on offer, if successful.”
There are several ASX stocks keen to find validation for their cannabinoid products through clinical trials and gain approval by regulators including the TGA and US Food and Drug Administration (FDA).
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BOD AUSTRALIA (ASX:BOD)
BOD is in pole position to have the first Schedule 3 CBD product in the Australian market after this month announcing positive preliminary results from its Phase 2B Can-Rest Insomnia trial.
Complete results are expected in the next few weeks, including secondary and tertiary endpoints which include relief from anxiety and stress.
The trial examined effects of BOD’s Schedule 3 CBD formulation on insomnia symptoms in 208 participants over eight weeks.
Participants were randomly assigned to receive daily doses of CBD at 50mg, at 100mg, or a placebo. The primary endpoint was the comparison of Insomnia Severity Inventory (ISI) scores for each dose against the placebo.
ISI scores were collected at baseline, week 4, and week 8. The trial also assessed sleep using smartwatch data and measured anxiety and stress using the DASS-21 questionnaire.
Of 208 participants, 194 completed the study, and 208 were included in the intent-to-treat analysis, while 180 were part of the per protocol analysis.
BOD says analysis of the primary endpoint on the per protocol population, showed a statistically significant benefit of CBD 100mg compared to placebo when tested at the 0.05 statistical significance level. A significance level of 0.05 indicates a 5 per cent risk that the results occurred by chance.
CEO Jo Patterson said BOD planned to continue commercialisation discussions and meetings with the TGA.
“The trial completion marks a significant breakthrough for Bod for our uniquely formulated Schedule 3 CBD product,” she said.
“The singularity of this product is in its soft gel format – utilising a patent protected encapsulation technology, presents enormous opportunity both through existing permitted pathways, and through other global markets.
“As we know, sleep is so central to our health and wellbeing, and the birth of this new product is certainly an exciting journey not only for our business but the cannabis market more broadly.”
NEUROTECH (ASX:NTI)
NTI – following in the footsteps of 2023 biotech market darling Neuren Pharmaceuticals (ASX:NEU) – has its proprietary broad-spectrum cannabinoid drug therapy NTI164 being investigated as a treatment for Rett syndrome.
In March this year NEU announced that its large US pharma partner Arcadia Pharmaceuticals (NASDAQ:ACAD) had received FDA approval for its drug trofinetide, now marketed under the name Daybue.
NTI’s proprietary broad-spectrum cannabinoid drug therapy NTI164 is being investigated across three clinical trials in pediatric patients suffering from autism, Rett syndrome and PANDAS/PANS, which are neurological disorders characterised by elevated neuroinflammatory processes.
“We believe NTI164 is ideally suited to lower and therefore improve clinical symptoms as has already been shown over 52 weeks of daily treatment in our Phase 1/2 trial in autism,” Duthy says.
“We are developing NTI164 as a therapy for predominantly rare pediatric neurological disorders, where safe and effective therapies are lacking.”
He said that unlike most other companies manufacturing cannabis-derived treatments, NTI was going down the drug development route to show NTI164 was safe and effective in clinical trials, to satisfy regulators such as the TGA and FDA.
“This ultimately allows Neurotech to make a substantiated medical claim and achieve superior pricing for NTI164 along with potential reimbursement from private or government payers,” he said.
“A working example of our strategy would be a drug called Epidolex, which is pure CBD oil from a cannabis plant which has been developed and approved for two rare epileptic disorders called Lennox-Gastaut and Dravet syndromes.
“This drug generated sales of $US736 million in 2022.”
Duthy said NTI164 was only available to patients under a clinical trial, or “in the case of our initial Phase 1/2 clinical trial in autism, to those patients who completed the trial and wished to continue under a special access scheme arrangement with their doctor”.
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MGC PHARMACEUTICALS (ASX:MXC)
European-based MXC has conducted and finished several trials of its medicinal products including:
- A clinical study undertaken into the effect of its epilepsy treatment CannEpil on driving performance (it was found to be safe)
- A Phase 2 trial for its dementia treatment, CogniCann, which demonstrated full safety and preliminary efficacy profile moving to Phase 2B
The company also has had several research papers published with leading institutions including RMIT on “the pathophysiology and the therapeutic potential of cannabinoids in prostate cancer”.
“As a pharmaceutical company, MGC recognises the importance of conducting clinical trials on its products as future medicines,” CEO and managing director Roby Zomer told Stockhead.
“Our intention is to provide medicines that are safe and effective, ensuring both patients and doctors have the assurance that, today, tomorrow, and in the years to come, patients will receive the same safe and effective treatment without any changes.
“Furthermore, if we want the industry to be viewed more as a life science industry, we need to bridge the gap in research and invest in more clinical evidence to support the legitimacy of using cannabis as medicine, following GMP and GCP (good clinical practice) guidelines.”
“MGC sees the Australian space as great hub to conduct its studies and take it forward to the US FDA approvals afterwards.”
ZELIRA THERAPEUTICS (ASX:ZLD)
ZLD rocked the medical world in May when it said that it had come up with an alternative drug for diabetic nerve pain that performed better than Pfizer’s Lyrica.
Zelira successfully completed a multi-arm head-to-head study of its proprietary diabetic nerve pain drug ZLT-L-007 against the multibillion-dollar annual revenue drug Lyrica.
The study, approved by the US IRB (institutional review boards), showed that ZLT-L-007 – a cannabinoid-based oral capsule – was safe and well-tolerated, meeting the primary endpoint for safety with no serious adverse events (SAE).
The study also met its secondary endpoints, including significant decreases in Visual Analog Scale (VAS) and Short-form McGill (a pain rating questionnaire) scores, among others.
According to research, the global diabetes drug market was worth at least $US62 billion in 2022, and is projected to double by 2032.
As many as 50 per cent of people with diabetes suffer from nerve pain, and half of all amputations annually are associated with the disease.
ZLD now plans to progress ZLT-L-007 into further formal clinical trials on a path towards regulatory approval.
ZLD is raising funds through the HOPE SPV (special purpose vehicle) to progress its proprietary cannabinoid-based medicine for autism spectrum disorder through the necessary clinical trial and development program, with the intention of achieving formal FDA approval. To date, $US11.85 million of the total $US35 million sought has been committed by investors.
INCANNEX HEALTHCARE (ASX:IHL)
IHL has the world’s largest portfolio of patented medicinal cannabinoid drug formulations and psychedelic treatment protocols.
IHL has an upcoming pivotal (Phase 2/3) study of its novel cannabinoid combination for patients with obstructive sleep apnoea, after promising Phase 2 results were released last year.
Results found that IHL-42X reduced the apnoea hypopnea index (AHI) by an average of 50.7 per cent versus baseline assessments, and 25 per cent of participants experienced greater than an 80 per cent reduction in AHI measure.
IHL is also looking at the effect of its anti-inflammatory drug for arthritis.
The company announced in July it had received approval from HREC for the lead site, Emeritus Research in Victoria, for the Phase 2 blinded, placebo controlled clinical trial to determine the safety and effect on pain and function of IHL-675A in patients with rheumatoid arthritis.
The Phase 2 trial follows a successful Phase 1 trial, where IHL-675A was observed to be well tolerated.
The company is placing a significant importance on the US, given that it’s the largest pharmaceutical market in the world, with plans to redomicile its shares to the States on the Nasdaq exchange.
IHL CEO Joel Latham told Stockhead its focus revolved around getting its drugs registered with the US FDA following successful clinical trials.
“We also have other early stage cannabinoid assets which we plan to take to trial in the future,” he says
“We see ourselves as a fully fledged biotech so we want to develop novel treatments with are clinically and scientifically validated to achieve registration with the major health regulators globally.”
EMYRIA (ASX:EMD)
EMD’s proprietary ultra-pure synthetic CBD capsule EMD RX5 is targeting psychological distress as an OTC medication.
Managing director Michael Winlo said its Phase 3 clinical trial is active but on hold while the company optimises the manufacturing of its product.
“We’re more than half way there and will be in a position to provide an update once our optimisation work is completed,” he says.
“We have a commercialisation partner with Aspen Pharmacare Australia, who will help with registration, sales and distribution.
“For EMD RX5 to become an accepted, recognised therapeutic we need to put strong evidence behind its use and demonstrate where it works best so trials are the responsible path to do clinically and make sense from a commercial perspective over the long term as well.”
The company also has high-potency CBD capsules EMD RX7 and EMD RX9, which it plans to advance through clinical trials for prescription indications.
AVECHO (ASX:AVE)
AVE recently undertook a $6 million capital raise to advance its Phase 3 TPM-enhanced CBD capsule to manage the symptoms of insomnia.
AVH’s Phase 3 study testing its oral CBD soft-gel capsule will compare nightly CBD doses of 75 and 150mg CBD with placebo for their ability to improve sleep.
The company said manufacturing the capsules for the trial was under way at Procaps Group (USA), with clinical supply expected to be available soon.
Originally published as ASX cannabis stocks making almighty push for approval with clinical trials
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