Australian Cannabis Index | HMMJ Ploughs Ahead in Response to Biden Inauguration

With the Senate now under the control of Democrat Chuck Schumer, many believe that further cannabis legalization at the federal level is inevitable.

The Horizons Marijuana Life Sciences Index ETF (HMMJ) was the star of the show again last week, as US investors continued to demonstrate a strong reaction to the inauguration of Democratic President Joe Biden.

With the Democrats are now also poised to control the Senate as well as the House of Representatives, many industry experts believe that the possibility of cannabis legalization at the federal level could be closer than ever.

While it is likely that the first days of the executive and legislative agenda will be consumed by the emergent matters of the times, cannabis reform at the federal level provides a uniquely unifying opportunity for these disparate voices to coalesce and create a positive change.Brach Eichler Cannabis Law Co-Chair, Charles Gormally

In fact, while several cannabis legalization bills were previously tabled in the Senate—after successfully passing the House—each time they were stifled by the Republican majority.

However, now the Senate is under the control of Democrat Chuck Schumer, a New York Senator who has previously attempted to introduce cannabis legalization measures in his own state, only to see the proposed legislation shot down.

Additionally, President Biden also confirmed last week that he had nominated California Attorney General Xavier Becerra and Pennsylvania Secretary of Health Dr. Rachel Levine to serve as the US Department of Health and Human Services Secretary and Assistant Secretary, respectively.

The move drew considerable praise from cannabis industry advocates, as both candidates have a history of supporting marijuana legalization efforts.

"[Dr. Levine] is a trailblazer who successfully guided the implementation of Pennsylvania's medical marijuana program," American Trade Association for Cannabis & Hemp President Michael Bronstein said.

"Under Dr. Levine's leadership, the program expanded qualifying conditions based on science, added flower to help meet patient needs, and stood up a first in the nation marijuana research program."

"Pennsylvania is now one of the quickest growing and most consequential medical marijuana markets in the country in large part due to Dr. Levine's work."

As a result, the HMMJ surged past the competition and eventually closed out the previous week at 11.10, while the Australian Cannabis Index fell to 7.49.

The S&P 500 also continued to chart steadily compared to other indices—likely bolstered by the official departure of the Trump administrationwhile the AORD lagged behind.

This led to a slight pullback on Friday last week, as US equities underwent a mild decline after investors became uneasy about reports of a new potentially deadlier coronavirus variant. However, the market continued to remain relatively bullish about President Biden's $1.9 trillion stimulus plan.

Keeping this in mind, let's examine some of the ASX-listed shares that drove the market forward last week.

Medlab Clinical

The clear winner last week was the Australian biotechnology firm, Medlab Clinical (ASX:MDC), after the company announced that it had been granted clinical investigational new drug status by the US Food and Drug Administration (FDA) for its flagship cannabis-based formulation, NanaBis.

This is huge news, as NanaBis was developed to target cancer-related pain, which is an increasingly lucrative area of pharmaceutical research. In fact, in the global cancer pain market was estimated to account for approximately $5.53 billion in 2018 and is expected to grow to $7.54 billion in size by 2025—while exhibiting a CAGR of 4.5%—according to a study from Allied Market Research.

Receiving clinical IND status is a major milestone for our NanaBis™ program and a recognition of the robust clinical and real-world data backing NanaBis™ for cancer bone pain. We have now received clearance in the US, UK and Australia to commence clinical entry and are making preparations for study initiation later this year. A successful Phase III trial could see NanaBis™ as the first cannabis-based pharmaceutical containing THC in the United States.Medlab Clinical Managing Director, Dr Sean Hall

Achieving investigational new drug status from the FDA is also an important milestone for the company, as it will lay the groundwork for eventually launching a phase III trial in the US focused on evaluating the drug's potential as a form of monotherapy for metastatic cancer-induced bone pain (CIBP).

This symptom was chosen as it is the most common form of cancer-related pain, although the company has already confirmed that it plans to expand its use to other forms of cancer pain, pending further regulatory clearance.  

Earlier this month the Medlab also published a market update regarding its ongoing research, which saw the company announce that it had successfully advanced additional research to support the expanded use of NRGBiotic and MultiBiotic, along with its novel NanoCelle drug delivery platform.

"The completion of two clinical studies for existing nutraceutical products during the pandemic was a solid achievement in itself. We look forward to receiving results in early 2021, and expect that with this is additional evidence in hand we will be to drive increased uptake of these two products, which are already being sold in pharmacies, with additional medical claims," Medlab Clinical Managing Director Dr Sean Hall said.

"In all, we have invested in building a solid, evidence-based foundation for populations with significant unmet needs, whilst the COVID-19 impact caused some delays and removed the ability to travel, global business development has continued."

"In October this year we brought on a New York based business development consultancy team to help us partner NanaBis™, and whilst early, this appears fruitful; moving forward we are expecting to widen our US and EU presence to increase partnering opportunities across the entire MDC portfolio."

Disclaimer: Past performance is not an indicator of future performance.

Creso Pharma

Creso Pharmaceuticals (ASX:CPH) saw its share price climb to 0.25 on 19 January, after the company revealed that it had received another new purchase order for its line of animal healthcare products, anibidiol.

The repeat order was made by one of Creso's existing commercial partners, Virbac Switzerland, and is valued at a little under $250,000 (AUD).

We are very pleased with the recent developments and receipt of a number of purchase orders for both the anibidiol® and cannaQIX® product lines. These Pos highlight the significant growth that we are witnessing for our offerings, across a range of large markets where there is considerable opportunity to scale."Creso Pharma Commercial Director, Jorge Wernli

The news provoked a positive response from investors, as it is the latest in a series of purchase orders that the company has managed to lock down in recent weeks, which also included an additional three orders for anibidiol that were valued at $401,4491 (AUD).   

"These new orders also underscore our ability to supply products in spite of very challenging circumstances which have developed as a result of the COVID-19 pandemic in a fast and flexible manner," Commercial Director Jorge Wernli said.

"Our capabilities to generate and deliver ongoing POs, and deliver a record start to FY2021 leaves Creso in a very favourable position to capitalise on the fast growing demand we are witnessing for our offering and the large market opportunity the health sector represents."

And earlier this month the company secured a $320,000 purchase order from Pharma Dynamics South Africa, a subsidiary of Lupin International (NYSE:LUPIN).

Pharma Dynamics currently distributes Creso Pharma's hemp-based products throughout South Africa and is in the process of working to extend its distribution to Namibia, Botswana, Zimbabwe, Swaziland, Lesotho, Angola, Mozambique, and Uganda.

Creso Pharma have also stated that they are confident the deal will lead to additional opportunities in the African market in the coming months, as it continues to work with Pharma Dynamics to "establish a broader footprint" and increase the size and volume of subsequent purchase orders.

Disclaimer: Past performance is not an indicator of future performance.

Ecofibre

The share price for Ecofibre (ASX:EOF) received another boost—reaching 1.98 per share by Tuesday last week—after news broke that the company's health division, Ananda Health, had entered into an exclusive distribution alliance with Medisca.

Under the terms of the agreement, Ananda will be given access to Medisca's network of prescribers, pharmacists, and healthcare providers across the US.

We could not be more proud to partner with the global leader in the pharmaceutical compounding industry. MEDISCA has over 30 years of experience in the industry and both of our organizations have core values that are deeply aligned around education, quality and customer care. This partnership is one of the most important milestones in the professionalization of the CBD industry. This is the first time a multinational distributor will be carrying ingestible hemp-derived CBD products.Ananda Health CEO, David Neu

The full range of Ananda's products will be made available to the US MEDISCA network—which constitutes over 5,000 pharmacies—from the beginning of February 2021.

At the same time, both companies have also pledged to work together to establish a commercial presence in the Australian market under the SAS B program.

"To ensure that we can provide our pharmacists the best-in-class CBD product range we are very pleased to announce our exclusive distribution partnership with Ananda Health," MEDISCA Global Strategy and Innovation Senior Vice President Panagiota Danopoulos said.

"MEDISCA has been closely monitoring the CBD segment over the past several years and we have seen awareness and demand increase for compounding pharmacists across many geographies."

"CBD is an exciting new category that still requires significant research and education to ensure it can help as many patients as possible. In conjunction with Ananda Health, we are very excited to be able to give our pharmacists access to the research, tools and training to improve patient outcomes."

The agreement is currently set to run for 3 years, while also allowing for an additional 2-year extension. Once six months have elapsed from the contract start date a minimum sales target will also be established, which will be considered an essential requirement if the company is to pursue the 24-month contract renewal.

Ananda will have exclusive distribution access to the United States, Canada, and Australia. However, Medisca is able to dispense the products to other parts of its extensive network on a non-exclusive basis.

Disclaimer: Past performance is not an indicator of future performance.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.