These Two ASX-Listed Cannabis Biotechs are Working on a COVID-19 Treatment

As the COVID-19 pandemic stretches on, many companies are vying to come up with a treatment – including two ASX-listed cannabis companies.

Throughout the world, over 25 million cases of COVID-19 have been confirmed, with nearly 850K deaths attributed to the novel coronavirus. In order to mitigate the spread of the virus, over a third of the world's population has been placed on lockdown, and unemployment has skyrocketed in virtually every country.

In April alone, the United States lost over 20 million jobs, with the unemployment rate climbing to 14.7%, a rate not seen since the great depression. The virus sent stock markets into a sharp decline, in what has now been dubbed the 2020 stock market crash, as well as the coronavirus crash.

While the world has effectively ground to a halt, pharmaceutical companies and researchers are pouring their efforts into finding a treatment for the COVID-19 virus, with over 100 potential vaccines estimated to be in the works. As such, investors may seek to learn about, and invest in some of these companies in the hopes that they secure a treatment for COVID-19.

Here are two ASX-listed cannabis biotechs that have entered the race to develop a treatment for COVID-19, and here's how they're progressing.

MGC Pharmaceuticals (ASX:MXC)

MGC Pharmaceuticals Ltd (ASX: MXC) is a Europe-based, GMP-licensed biopharma company specializing in the production and development of phytocannabinoid-derived medicines.

Despite being a cannabis-centric company that utilizes cannabinoid medicines for a variety of conditions, MGC Pharma is developing a treatment for COVID-19 that contains no cannabis. The proposed treatment, known as ArtemiC, is a natural supplement formula based on Artemisinin, Curcumin and other supporting ingredients that share anti-infective, anti-inflammatory, immune-modulatory and antioxidant properties.

The company received Ethics Committee approval on the 17th April 2020 for its trials in Israel, which have since been geographically expanded to the Mahatma Gandhi Mission's Medical College & Hospital in India, where a full ethical review was undertaken with ethics committee approval received.

Additionally, MGC Pharma has also been selected by the World Health Organisation to participate in a global COVID-19 taskforce by reporting on the ArtemiC trial.

Currently, MGC is undergoing a Phase II placebo-controlled clinical trial to evaluate the safety and efficacy of ArtemiC, with recent interim results demonstrating a significant clinical improvement in patients infected with COVID-19.

As we've mentioned previously, MGC Pharma doesn't seek to eradicate COVID-19 with ArtemiC, but rather, the company's anti-inflammatory formula seeks to mitigate the inflammatory response that COVID-19 can trigger, known as a 'cytokine storm'.

Fatalities that result from COVID-19 are often due to the overactivity of the immune system and this cytokine storm response, which can lead to organ failure. By reducing this hyper-inflammatory response, the rate of hospitalizations from COVID-19 is likely to be greatly reduced.

Should MGC continue to see positive results with its treatment, the company has set up a binding term sheet with KS Kim for the sales and distribution of ArtemiC in Russia, Israel, the CIS and Balkan countries. Additionally, the company has begun the registration process for ArtemiC in Russia.

Incannex Healthcare (ASX:IHL)

Sharing MGC Pharma's goal of minimizing the likelihood that patients will suffer from a cytokine storm, Incannex Healthcare's IHL-675A aims to inhibit sepsis-associated acute respiratory distress syndrome (SAARDS), which also results from an overactivity of cytokine production.

According to Incannex, SAARDS is characterized by "widespread inflammation of the lungs, often called 'wet lung.'"

Currently, no treatment exists for SAARDs.

Though unlike MGC's ArtemiC, Incannex's formula contains the cannabis-derived compound cannabidiol (CBD) and hydroxychloroquine – the controversial drug touted by the U.S. President Donald Trump in March.

In July, Incannex announced that IHL-675A had achieved positive results from its pre-clinical animal trials, in which the company tested both CBD and Hydroxychloroquine (HCQ) on lab mice in order to determine their effects on cytokine production.

The trials found that both CBD and HCQ reduced serum cytokine levels, with CBD reducing cytokine levels in mice by up to 90% relative to the vehicle-treated mice.

The positive results from Incannex's recent pre-clinical animal study served were followed by an in vitro study on IHL-675A, which affirmed the inhibitive effects of CBD and HCQ on cytokine production.

IHL plans to move ahead with stage 2 of its in vivo animal study, and the company believes that successful results at stage 2 will make IHL-675A eligible for the FDA's 'emergency use authorization.'

Which of These ASX-Listed Cannabis Companies Will Come Out on Top?

The ramifications of finding a treatment for COVID-19 are huge, and mitigating the body's natural inflammatory response to the virus is generally considered the best way to get there.

There isn't a country on earth that has truly conquered COVID-19, but rather, most countries are anxiously awaiting another spike in both cases and fatalities.

As such, a return to normalcy is largely dependent on some kind of treatment for the novel coronavirus, and any company that can produce said treatment will certainly etch its name into the history books.

In the case of MGC Pharma and Incannex Healthcare, the ramifications of producing statistically significant improvements in COVID-19 symptoms would be enormous. Not only would it send their stock skyrocketing, but they would also become an overnight household name. Moreover, should Incannex's formulation achieve meaningful results, it would affirm cannabis's medicinal qualities on a larger scale than previously imagined.

Investors will want to keep an eye on these ASX-listed cannabis biotechs, as they may be sitting on the keys to the kingdom.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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