MGC Pharma’s deal to pursue broader application of medical cannabis via a research deal with RMIT pushed its shares up 2.3 per cent on Wednesday.

Earlier this year, MGC teamed up with the university to work on genetics and breeding programs in the development of medical marijuana.

Now it has fleshed out that tie-up: it will fund work by RMIT to establish a medical cannabis database and conduct clinical trials on cannabis treatments for cancers, initially melanoma.

News of the deal, which is expected to see MGC fund a program estimated to cost a rumoured $1.5 million, pushed the shares ahead yesterday to a high of 4.7c before closing up 2.2 per cent at 4.5c.

This puts investors who took part in the $5 million raising in May last year priced at 4.4c just in the money. However, the backers of the $10 million raising at 6.5c earlier this year are still underwater.

“Melanoma is Australia’s national cancer,” says Dr Nitin Mantri, a senior lecturer in science at RMIT who will lead the program for MGC.

“The intention is to identify which strains of medical cannabis show the best efficacy in treating melanomas, and then seek to extend that to other cancers in the future,” he said.

There has been anecdotal evidence that medical cannabis has succeeded in melanoma lesions disappearing, he said, but there have yet to be any clinical trials to demonstrate which strain of cannabis works best.

RMIT has been working in the field of Chinese herbal medicines for close to 25 years now. Like medical cannabis, there are many anecdotal claims of success but limited scientific trials to validate the claims.