WA medical cannabis player finishes year on a high after product milestone
AusCann’s shares soared more than 40 per cent on Thursday, after the Perth-based cannabis pharmaceutical company announced it was the latest player to run the regulatory gauntlet and produce a medicinal cannabis product.
The company has completed manufacturing and testing of its cannabinoid-based hard-shell capsules.
They are now undergoing clinical evaluation and the company expected the capsules to be available to the public in the first half of 2020.
AusCann’s (ASX:AC8) shares jumped 12 cents to 30 cents on Thursday but by Friday had simmered back down to 25 cents.
AusCann chief executive Ido Kanyon said the announcement was hugely important for the company, which outsources the cannabis to focus on the pharmaceutical side of production.
“It’s no longer on an R&D bench, it is no longer some work we are doing in order to prove a hypothesis, it was done with large scale manufacturing, which is a major milestone for us because as soon as you scale up you need to make sure everything you have on the way from raw materials to manufacturing is consistent and reliable,” he said.
“In this kind of emerging industry we basically are very innovative in our approach and today’s announcement along with the other good news that comes with it, it is a validation for our business model.”
Manufacturing medical products in Australia is no mean feat, with several licenses and approvals required from Australian agencies including the Office of Drug Control and the Therapeutic Goods Administration.
There are currently 25 companies licensed to manufacture medical cannabis in Australia.
Importing precursor products or exporting requires further approvals. There are 22 companies licensed to import medical cannabis to Australia.
Up to November 30 2019, the TGA has approved more than 24,000 applications from patients for medicinal cannabis products.
Current estimates put the demand for medical cannabis in Australia at about 250,000 patients and a market cap of about $1 billion by 2023.
Mr Kanyon believes these estimates are modest as access becomes easier and acceptability grows.
He said products like Auscann’s will be aimed at a larger population.
“If you take the management of chronic pain in Australia alone the data shows there are more than 3 million patients,” he said.
“There is quite a gap and definitely red tape and access is one of them.
“One of the main drivers for access is around medical acceptability … in terms of patients and the stigma that is associated with medicinal cannabis.
“I think we are seeing the first wave of patients now, it’s just the tip of the iceberg.
“The average 70-plus patients after years of prohibition will probably not jump into the doctor’s office and ask for medicinal cannabis but this will change over time.”
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