Cannabis deal completed ahead of human trial

Australian biotech company Medlab (ASX:MDC) has signed a significant cannabis supply agreement with Aphria, a Canadian-licensed producer of medical marijuana. Cannabis plant species, yields and a novel extraction process have been established between the two companies, allowing Aphria to produce for Medlab in a large-scale supply.

Aphria will grow and prepare the high-yield cannabis, made of a potent combination of CBD (cannabidiol) and THC (tetrahydrocannabinol) for Medlab in Canada, while Medlab will complete the manufacturing at a licensed Schedule 8 (S8) TGA-approved facility, likely to be in Australia. At this facility, the cannabis product will be combined with Medlab’s medicine delivery system, NanoCelle, which enables submicron-sized particles to be taken by mouth spray, allowing a swift and direct absorption of medicine into the bloodstream.

Medlab’s forthcoming human trial, for management of intractable pain with oncology patients, will apply cannabis whole plant extract of both CBD and THC in a 1:1 ratio with NanoCelle, making it the first trial of its kind. Medlab Managing Director Sean Hall said Aphria’s expertise in producing high-yield cannabis extracts of CBD and THC oil, along with the NanoCelle delivery platform, will allow the production of a precise, potent cannabis medicine.

“Our agreement with Aphria establishes a sustainable supply of consistent and active ingredients, which is important because precision and accuracy of the active ingredients are of primary concern as we are working to build a true pain management medicine,” said Hall.

Medlab’s trial will be classified as a Phase 1 crossover IIa trial, combining SAD (single ascending dose) and MAD (multiple ascending dose) studies. Commencement of the trial is subject to ethics approval at an Australian research oncology hospital and approval by both the TGA and NSW Health. The product formulation and the ability to export remain subject to approval by Health Canada.

Aphria CEO Vic Neufeld said the opportunity to create a product specifically for a human trial was a significant advancement in the use of medical cannabis.

“Aphria’s focus and keen attention to pharmaceutical protocols, embedded in all areas from seed to sale, has enabled Aphria to partner with an industry leader such as Medlab based in Australia,” Neufeld said. “We continue to deliver to our shareholders our vision to take the Aphria story, together with Health Canada’s regulatory advancements, to regulated countries that are moving toward medical cannabis as an alternate treatment for patients in need.”

Medlab (ASX:MDC) finished 1.45% higher at $0.35 yesterday, the day of the announcement. They were trading 4.29% higher at $0.365 as of around 2 pm on Tuesday.