While Australia is still lagging behind other countries in terms of the full-scale, recreational legalization of cannabis, the medicinal cannabis sector is starting to gain some traction.
Roughly seven people per day are being prescribed to medicinal marijuana in Australia, putting estimates at around $18 million for the industry itself. This is set to reach billions in the not-so-distant future, with medical marijuana applications skyrocketing in 2018. The TGA (Therapeutic Goods Administration) went from approving 97 applications between January and February in 2018, to 469 between August and September.
And, at the forefront of Australia's medicinal cannabis sector is Althea (ASX: AGH), a licensed producer, supplier and exporter of pharma-grade medicinal cannabis.
Founded in 2017, Althea has made tremendous strides in a relatively short amount of time.
The company was listed on the ASX in September 2018, and has raised nearly $20 million through $0.20 shares.
The company has already engulfed 20% of the Australian market, released an app to ease the cannabis prescription process for doctors and patients, and has received backing from the canadian-based cannabis company Aphria.
We've taken a very bullish approach to Althea here at the Green Fund, and so we decided to sit down with the CEO and managing director Josh Fegan to find out more behind the prominent company.
"I should say that Australia's going very well. May was another record month, so it's our first complete year and where we've come from May 2018 to May 2019's extraordinary. We're finding a lot of the wins are coming from our educational activities with doctors so now that it's been a length of time where the earlier doctors have seen the outcomes of treating patients with medicinal cannabis, a lot of those experiences have been very positive and they're now actually talking to one another, helping the drive."
A huge component of Althea's work boils down to education surrounding cannabis and it's medicinal benefits. They have been pursuing this with their web-based platform 'Concierge', which is designed to keep both medical professionals and patients informed on the latest information about cannabis, as well as how to prescribe the drug.
Available in a desktop and mobile app, Concierge expedites the prescription process, and since it was released has signed up 93 doctors and 511 patients as of April this year.
Alongside the app, Mr. Fegan informs us of Althea's 'Dinner Meetings' – educational events held for medical practitioners interested in prescribing cannabis.
"In Melbourne we had a dinner meeting in Camberwell about three weeks ago and we had 32 doctors attend. Half of them have already actually done Special Access Scheme applications on behalf of patients and many more are still certainly interested and will probably do so from that meeting, so it's a great result."
While the US has continued to make headway with its cannabis legislation, there are still a lot of hurdles that Australian practitioners face when prescribing patients – which is why such events are necessary.
Unlike most medicines, doctors must be an authorized prescriber or have made a patient-specific application via the Special Access Scheme if they wish to prescribe a patient with medicinal marijuana. The application then gets sent off to the Therapeutic Goods Association for pending approval.
However, this has proven ineffective for many doctors—who often lack information surrounding cannabis—which leads to a lack in confidence when it comes to prescribing patients the drug. This is where Althea's 'Concierge' App, and their dinner meetings come into play.
"Without the doctors you don't have the support of essentially the gatekeeper, so you could have the best product and the most product in the world and it does not mean anything because you'll never move any of it."
"If you get the doctors on side, they're going to write scripts and that results in sales but, better yet, we know we're helping patients each and every time one of these scripts is written, there's a good chance that someone's quality of live improves, so we're really happy."
– Josh Fegan, Co Founder and CEO of Althea
And with regards to doctors being gatekeepers, Mr. Fegan is on the money. Without a doctors approval, patients seeking medical marijuana will have to simply sit patiently.
"These are all doctors that either go that way through the adoption ladder end up in the Althea Concierge ecosystem and then eventually make themselves usable and available to potential patients to come and talk to them about Althea medicinal cannabis."
"So it's working, the program is complex and difficult, as it can be sometimes, just given the audience that we're talking to and dealing with, it's working, and it's starting to reward us with real dividends, while upping the engagement and interaction in doctors. And, as we know, higher engagement eventually results in patient numbers, which are growing faster than ever," Fegan said.
And, as the number of users of Concierge continue to climb, Mr. Fegan believes doctors will be able to gain the data from their patients to gain more confidence in the benefits of medicinal cannabis.
"Althea Concierge, which has grown steadily, has shown us that you don't need Phase III clinical trials and RCTs and all sorts of things to get doctors on board with a new therapy."
"All they need is good information and the tools to actually evaluate or observe the therapy for themselves and if it's a good, positive experience for them, they're more than happy to go on to prescribe again, not just to the original patient but to multiple patients and better yet, they talk to their colleagues about it and that's who they listen to," he said.
Althea currently has 5 medicinal cannabis products which have been given a 100% approval rate from the TGA, as well as recently receiving approval by Agriculture Victoria to cultivate hemp within the state, giving them a foothold on Australia's emergent hemp industry.
On top of their hemp license, Althea has also entered into an agreement with Tissue Culture Australia, who will work together to implement tissue culture techniques in order to maximize the quality and quantity of their low-THC hemp plants.
And while growth has been rapid, Mr. Fegan believes there are still "hundreds of thousands" of Australians that are eligible to be prescribed medicinal cannabis.
But, Althea doesn't intend to keep all of its' eggs in the same basket. The company also has licenses to cultivate and distribute their medicinal cannabis products abroad, leading them to the growing UK market. Though despite entering a new region, much of Althea's plans will remain the same.
"It's still very much about the medical education, first and foremost, bringing the doctors up that adoption ladder to a point where they are willing to prescribe. But from a distribution angle, we're prepared to do per patient imports, so what that means is the UK government have said we've got no problem with you exporting your product, Althea medicinal cannabis from Australia and keep patients on a named basis."
"There's a light at the end of the tunnel in that we will definitely get the import license for commercial quantities, and we'll probably be the first company to do so, because no one has been granted an import license in the UK yet," Fegan said.
In May 2019, Althea released a UK version of 'Concierge', while also partnering with the UK Scientific Drug Committee to release 'MEDIC' – an educational portal which centers on the endocannabinoid system (ECS) and the different symptoms for which medicinal cannabis can be prescribed. MEDIC hosts learning modules on anxiety, insomnia and the negative effects felt after chemotherapy.
In order to get the word out about MEDIC, Althea has also partnered with DrugScience to present meetings to UK healthcare professionals, which will be similar to the events that they already host in Australia.
Though according to Mr. Fegan, it would seem the interest surrounding cannabis in the UK dwarfs that of Australia. Since launching in the UK, Althea now has more employees in London than it does in it's hometown of Melbourne – a gap that is set to widen.
"The meeting in London booked out within a day, so we have 200 doctors coming to that meeting and then a meeting in Birmingham, which already has 68 registrations," he said.
"I'm very, very, very optimistic that we'll get to that thousand-patient mark in the UK by the end of the year. In fact, I've never been more confident than I am right now."
Needless to say, Althea is spreading it's reach far and wide by capitalizing on the emergent medicinal cannabis markets in both Australia as well as the UK, making the company one of the biggest players in the medicinal cannabis space.
And, as we have been in the past, we will remain bullish when it comes to Althea Stocks, as we see big things in store for the Melbourne-based company.