A Green Fund exclusive interview with Dr. Richard Hopkins, Managing Director of Zelda Therapeutics.
Zelda Therapeutics Ltd is an Australian-based bio-pharmaceutical company that aims to treat important diseases and disorders using cannabinoid-based medicines.
Focusing primarily on sleep, pain, and anxiety, the three most common symptoms found when prescribing medicinal cannabis, Zelda's strategy is to develop plant-derived cannabis products that have the greatest medicinal impact possible.
Alongside their clinical trials, Zelda is also progressing a pre-clinical research program, examining the effect of cannabinoids in several types of cancer including breast, brain and pancreatic and other diseases such as diabetes.
In an exclusive interview with the Green Fund, the Managing Director of Zelda, Dr. Richard Hopkins spoke of the "unique position" that Zelda pharmaceuticals occupies within the cannabis space.
Their Purpose – Filling the Data Gap in the Industry
When asked why Zelda focuses on only a small range of specific ailments, Dr. Hopkins answered:
"What we've done at Zelda is said, "Okay, well what are the reasons people use medicinal cannabis in an unregistered prescribed domain?" Those three areas are pain, anxiety and sleep.
While all of these are challenging indications from a clinical trial perspective, in the case of insomnia, there's a lot of anecdotal evidence from patients to suggest that cannabis will work quite successfully."
Dr. Hopkins remarks that generating substantive results for these ailments can be easier said than done, despite the rising prescriptions of medicinal cannabis.
"With regards to pain and anxiety, it's a bit trickier, as these indications can be very subjective. Your idea of pain is very different than my idea of pain, and so to get quantitative measures you've got to be very smart and work with the best people to make sure you design your trials correctly."
This gap in qualitative data, that supports the clinical benefit of medicinal cannabis, is where Zelda aims to make their mark. While the market fleshes out, Dr. Hopkins argues that the data side of things remains lacking.
"Clinicians always ask the question, "I can prescribe you this for pain, but let me look to see what the clinical data … What clinical data there is to support this?"
"At the moment, there isn't any."
Zelda Pharmaceuticals is scheduled to be the first company using whole plant-derived extracts to generate data for trials surrounding insomnia, opioid reduction and autism, which all overlap with those major indications that people are using cannabis for, which is pain, insomnia and anxiety.
Given this lack of data within the cannabis industry, Dr. Hopkins remarks that Zelda must continue moving at "warp-speed" to maintain their first-mover status.
The first group to provide trust and data of a high standard to clinics, will, in turn, create a trustworthy brand, and meet the unmet needs of clinicians regarding the prescription of medicinal cannabis.
Dr. Hopkins believes Zelda will indeed be that first group, tactfully choosing pain, insomnia, and anxiety to focus on which are the three most prominent issues treated through medicinal cannabis.
And unlike conventional drug developers, Zelda's pharmaceuticals point of differentiation is the company's use of existing patient data.
Thanks to relationships with cannabis companies such as the German company 'Hapa Medical', and the American company 'Ilera Healthcare,' Zelda enjoys immediate access to upwards of 120,000 patients who they can distribute their products to upon clinical validation.
And in Australia, where the market is still relatively small, Dr. Hopkins says there is a lot of potential for clinical information.
"Right now there are maybe three groups in Australia who are working directly with patients and setting up clinics. We're really interested in the idea that if you set up a data-sharing agreement with any one of these enterprises, you'd get access in Australian to really high-quality information."
"Unlike Canada for example, when a doctor prescribes, you get the script, but you can get your cannabis from anywhere. You can go online and you order it, it makes it really difficult to then track the patient, determine how they've responded to therapy, all this sort of stuff.
"In Australia, it's the opposite, we've got very small patient numbers, but very, very high-quality data is collected on those patients. Understanding how well patients respond to Zelda products will help inform the design of future clinical trials"
And better yet, because of the unquenched thirst in the industry for a differentiated, clinically evaluated product, Zelda is in a unique front-line position.
Their Mission – Where Zelda is Headed
Contrary to the growing trend towards consolidation and vertical integration within the cannabis industry, Hopkins noted that Zelda is "agnostic" with regards to where they source their cannabis from, highlighting the company's need to be specialists:
"We've just got a singular focus in the company on clinical validation of medicinal cannabis."-Dr Richard Hopkins, Managing Director of Zelda Therapeutics Ltd
"The reason we try to keep simple is, if you're doing clinical trials, to really think hard about the strategic opportunities and to tap into the disruptive nature of what cannabis is doing, you can't be distracted by other activities in the company."
"I don't think it's easy to be vertically integrated and do all of those tasks well. That's just my view. We'd rather avoid the costs involved in cultivations, which is being commoditized, and focus instead on down-stream value-adding, which is where the highest returns are to be found."
This specialization, Hopkins argues, will be crucial for those in the Cannabis industry as it continues to mature and consolidate.
As a result of this need for specialization, Zelda has supply agreements with a German Company named 'Hapa Medical,' which are GMP–certified producers and wholesalers of high-quality full-spectrum extracts from medicinal cannabis flowers. Hapa supplies Zelda with CBD oils for their trials.
And with regards to Zelda's plans for commercialization, Hopkins mentions that this partnership with Hapa will play a role:
"We're going to enter into a distribution agreement with Hapa, to tap into their very formidable sales networks which stretch across the whole German market, to distribute our clinically validated product back into Germany, using their oils. There are a number of facets to that relationship which we're developing, all of which are good."
With roughly $1 million in the bank per quarter and their stocks sitting around 5 cents, Zelda doesn't immediately stand out as a heavy-hitter in the industry.
However, this is all slated to change once the products move along the production pipeline and into commercialization.
With outcomes to be revealed for many of Zelda's clinical trials later this year, the potential for growth within the company is massive.
"We've got the insomnia trial coming up this year, we'll do the opioid phase one this year, and most likely we'll commence to phase two this year as well, so there's a lot of stuff going on in the company, and we'll kick-off, hopefully, a phase one in autism should all the components come together.
"We then have a choice for insomnia. Depending on the data, if it's really clear and really strong, we can potentially think about phase three.
Having unlocked the value and had the market recognize what we've done, if you require that capital hopefully you can raise it at a much higher price."
And while the company awaits and anticipates positive outcomes for their trials, Zelda is also focusing on creating distribution and manufacturing partnerships in order to move seamlessly into the commercial phase.
"We'll be putting in place the distribution and the manufacturing partnerships, so the market will understand what markets we're going to move into, and how we're going to commercialize, that will all be visible. Then we just wait for hopefully a positive outcome to the trial."
While at the moment there is a lot of reputational risks for companies to align themselves with medicinal cannabis, this undoubtedly will change if Zelda can show positive outcomes for their trials, giving more leverage to the company, their products, and future partnerships.
In Australia alone, it is estimated that 1 in 5 Australians suffers from chronic pain.
And with pain as one of Zelda's main focuses, alongside anxiety and insomnia, the target market is seemingly limitless.
Their Execution – Full Steam Ahead
With a small, yet dedicated and experienced team, as well as positive predictions for the next 12 months of trials, it's highly possible Zelda may see its name in shining lights in the very near future.
The company occupies a unique and progressive space at the forefront of clinical cannabis research, with a growing number of partnerships along the supply chain that set Zelda up for a quick entrance into the commercial market following on from their trials.
It seems likely the company will experience sharp growth in the tail-end of 2019 and throughout 2020 if the clinical outcomes are positive as predicted.
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