Special Report: CannPal has plenty of cash as it takes the next step up to commercialisation.

CannPal (ASX:CP1) has closed the financial year with a solid bank balance and an eye on its shift from pre-revenue biotech to money-making machine.

The $12m animal health biotech company had $1.91m in the bank at the end of the June quarter, and an estimated R&D refund of $690k to look forward to in the next few months.

After years in the development cash-desert, CannPal is revving up two separate commercialisation efforts this year.

Its hemp-derived cannabidiol (CBD) oral skin and immune health nutraceutical supplement DermaCann is expected to start commercialisation as early as the second half of this year.

And CannPal has started a small scale commercial trial for a new joint health supplement using a CSIRO technology on Amazon, under a new direct to consumer brand.

CannPal managing director Layton Mills says fiscal 2020 has been a transitional year for the company.

“We are now progressing with the registration of DermaCann, our first cannabinoid-derived and clinically validated animal health product, which we believe would be the only veterinary product globally, to receive regulatory approval for lawful sale by veterinarians to pet owners,” he told Stockhead.

“This is a significant flag in the sand for CannPal and is especially exciting considering how large the dermatitis market is for dogs.”

Furthermore, the company’s fiscal responsibility has put it in a strong position as it begins to commercialise products.

“We have managed to remain adequately funded to continue with momentum during these uncertain times, positioning us to take advantage of the commercial opportunities presently available as a result of our diligent work,” Mills said.


Moving to sales

The quarter saw the release of positive results for a clinical study for Atopic Dermatitis with DermaCann, which showed the treatment substantially reduced the symptoms of Atopic Dermatitis in dogs.

CannPal will use the data to support registration of DermaCann in multiple markets as an approved veterinary nutraceutical for healthy skin and immune support for dogs with dermatological skin conditions.

A submission will be sent to the APVMA (Australian Pesticides and Veterinary Medicines Authority) in the second half of this year and CannPal is in advanced discussions with partners in markets that may not require product registration due to the relaxing of regulations for hemp-derived CBD.

In January CannPal also won the global exclusive rights to commercialise CSIRO’s MicroMAX microencapsulation technology in animal therapeutics.

MicroMAX  is designed to encapsulate microscopic droplets of oil in a special food grade material, to protect bioactive ingredients from oxidation, and help deliver them to the gastrointestinal tract for better absorption.

CannPal is using it initially for a joint health supplement which it has started selling into the US, using Amazon as a cost-effective route to customers given it’s one of the leading distribution channels for pet supplements there.

The supplement contains a natural anti-inflammatory formulation derived from hemp and other plants that act to support the endocannabinoid system to promote better joint health for dogs.


Building the IP pipeline

CannPal continued work in the quarter on its pipeline of animal health candidates, with work almost finished in the Phase 2A and 2B pilot studies for CPAT-01, the Company’s lead drug candidate in development for pain and inflammation in dogs with osteoarthritis.

“We have generated a considerable amount of data on our CPAT-01 drug candidate for pain and inflammation, including clinical studies in over 130 dogs,” Mills said.

“This will enable us to explore partners to continue the development for this exciting product, which was one of our core promises to shareholders in our IPO.”

The company completed its Phase 2B Pilot Target Animal Safety Study, a three-month clinical trial evaluating high dose ranges of CPAT-01 to confirm a broad safety profile for the drug candidate.

Outcomes will provide an indication of the expected outcome from the pivotal six-month study with the final report to be delivered in the third quarter 2020.

The company has also completed the live phase of its pilot Phase 2A Dose Determination Study to investigate the efficacy of varying CPAT-01 doses in dogs diagnosed with osteoarthritis. The data generated from this study will provide key insights into the effects of CPAT-01 for pain and inflammation associated with osteoarthritis, which will be used to determine next steps.


This article was developed in collaboration with CannPal, a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.