Emerald Clinics Enters UK Cannabis Market with Spectrum Biomedical Deal

Under the terms of the agreement, Emerald Clinics will receive a design and development fee of approximately $270,000 from Spectrum Biomedical upfront, along with $542 per patient.

The Australian healthcare provider, Emerald Clinics (ASX:EMD), has officially entered the UK market, after inking a valuable deal with Canopy Growth (TSE:WEED) subsidiary, Spectrum Biomedical.  

The agreement will see the companies partner to deliver a product registry aimed at providing key insights into various aspects of its cannabinoid-based medicines, including safety profiles, patient cost-benefit ratios, and overall efficacy.

It effectively initiates the expansion of our clinical service into the UK which is also exciting and allows us to start pursuing that in the coming weeks and months. I do hope they take that away because it's certainly been our strong conviction, that this is a real business model. We know that there's a strong interest and desire for high-quality, real-world evidence to support drug registrations, to support cost payment decisions. Emerald Clinics Managing Director, Dr Michael Winlo

Under the terms of the agreement, Emerald Clinics will receive a design and development fee of approximately $270,000 from Spectrum Biomedical upfront, as well as receiving $542 per patient analysed under its product investigation.

When news of the deal broke earlier this week it caused shares in Emerald Clinics to spike by almost 180%—after suffering a moderate decline following their debut on the ASX in February 2020—as it represents the company's first entry into the highly lucrative UK market.

Although Emerald already has a partnership in place with Canopy Australia, its penetration of the UK cannabis industry may allow the company to establish a beachhead for expansion to further European markets, which has led to a considerable renewal of interest from investors.

"And so this is well earned recognition that there is value in what we've been doing and so that's encouraging," Emerald Clinics Managing Director Dr Michael Winlo said.

"We are honoured to embrace this opportunity to work with Spectrum Biomedical UK and the Canopy growth team to realise the potential for a Real-World Evidence asset which will help to progress the commercialisation and regulatory acceptance of its medicinal cannabis products."

"The evidence and data gathered by Emerald is of exceptional quality and depth, and therefore relevant to licensed producers, regulators, prescribers and importantly, the end patient. We expect to generate more deals with corporate partners to deliver on our IPO goals and to expand our unique RWE model globally."

The final fee under Emerald's initial contract with Spectrum Biomedical is currently capped at $723,000, while the product registry is expected to be successfully delivered within a 24-month time frame.

As part of the deal Emerald Clinics will get to maintain independence in how it delivers therapeutic care to patients, which means that it also retains the right to establish either its own UK-based clinical network, or to partner with another existing healthcare provider.

And according to Emerald Clinics chairman, Stewart Washer, generating further clinical data is potentially the only real way for medicinal cannabis to reach full mainstream acceptance in the healthcare community.

"At the moment medical cannabis hasn't broken into mainstream medicine because if you look at the sales, they're still tiny," Washer said in an interview with Stockhead.

"They're hundreds of millions of dollars but that's not even a small percentage of something like Lipitor (cholesterol lowering drug) or one of the big pharmaceutical drugs."

"So if you say 'look we've got a treatment for insomnia' and have real clinical evidence around that you can potentially crack through into mainstream medical markets."


This pot stock could reach new heights in 2020 due to Coronavirus

The COVID-19 pandemic is showing no signs of slowing down, and as global markets enter meltdown many cannabis companies are feeling the effects of capital crunch.

While the market crash will continue for some time, it represents a golden opportunity for investors who are capable of riding out the volatility until share prices rally.

Luckily, one pot stock has developed antimicrobial drug that can already treat two superbugs while limiting their ability to develop antibiotic resistance.

Investors can also start picking up shares at rock bottom prices, as global investor sentiment continues to dampen thanks to COVID-19.

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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.

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