Check Up: The FDA refuses to give CBD a green light, but market doesn’t seem to care

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• The FDA declined regulate CBD-based supplements and food, citing safety reasons
• CBD products have grown exponentially in the marketplace
• We take a look at what it all means for the cannabis industry

The US FDA announced last week that:

“….a new regulatory pathway for CBD is needed that balances individuals’ desire for access to CBD products, with the regulatory oversight needed to manage risks.”

What it means is that the FDA is essentially throwing up its hands on cannabidiol (CBD) products – saying that CBD doesn’t fit the type of supplements or food additives it typically monitors.

The FDA claimed that science is lacking on the safety of long-term CBD use, and said  that if any regulation is needed, Congress should manage it.

To understand what it all means, we need to first understand what CBD actually is.

CBD is the non-psychoactive compound derived from either hemp or non-hemp flowers, and has been used in a variety of ailments such as joint pain.

In 2018, the US Congress passed into law the Agriculture Improvement Act.

This law removed hemp from the federal Controlled Substances Act, effectively legalising CBD only if it comes from hemp.

(Note a few states have not removed hemp from their controlled substances acts, so legality differs across states).

The difference between hemp and marijuana (or cannabis) is in their psychoactive component, tetrahydrocannabinol, or THC. THC is also a type of cannabinoid or CBD.

Hemp has 0.3% or less THC, meaning hemp-derived products don’t contain enough THC to create the “high” traditionally associated with cannabis.

Cannabis meanwhile contains both CBD and more THC than hemp, and medical research on cannabis has been severely restricted by US federal law.

The US Drug Enforcement Agency still categorises cannabis as a Schedule 1 substance.

This means cannabis is treated by the Agency as if there is no accepted medical use, and a high potential for abuse.

Despite this lack of a green light, CBD products have grown exponentially in the marketplace, where they could be found in anything from energy drinks to pet food.

Health risks

In its report, the FDA said CBD poses risks to animals, and people could be unknowingly exposed to CBD through meat, milk and eggs from animals fed CBD.

Acccording to the FDA, the use of CBD raises various other safety concerns, especially with long-term use.

“Studies have shown the potential for harm to the liver, interactions with certain medications and possible harm to the male reproductive system, ” said the FDA.

“CBD exposure is also concerning when it comes to certain vulnerable populations such as children and those who are pregnant.”

The question now becomes whether Congress can step in and provide the necessary direction.

Paige Figi, executive director for the Coalition for Access Now (CAN), said that she disagrees with the FDA’s intention to develop a complex, burdensome and expensive new regime for CBD product regulation.

“A pathway already exists,” she said.

“Dietary supplement regulation provides consumers with the assurance that through independent testing and accurate labeling the products they consume are safe.

“Congress must pass legislation providing for FDA dietary supplement regulation that prevents the FDA from overriding state authority, and provides American consumers with what they want and need.”

The market seems to have brushed away this development, and the Global Cannabis Index has risen by 5% since the news broke out.

To the ASX….

Best and worst performing ASX biotechs over the past month

Mesoblast (ASX:MSB)

Mesoblast rose 11% on Wednesday after saying that it has resubmitted to the US FDA its Biologics Licence Application (BLA) for the approval of remestemcel-L in the treatment of children with steroid-refractory acute graft versus host disease (SR-aGVHD).

The resubmission contains substantial new information as required by FDA in the Complete Response Letter (CRL) received in September 2020 to the BLA for remestemcel-L.

Mesoblast has responded to the CRL and the further guidance it has received from the FDA, and has also generated and provided new data and analyses in the resubmission which the company believes provide substantial evidence of remestemcel-L’s effectiveness in pediatric SR-aGVHD.

Antisense (ASX:ANP)

Antisense also surged on Wednesday after it reported initial positive muscle functional data from a DMD mdx animal study assessing the use of the combination of antisense (ASO) to CD49d, with a dystrophin exon skipping restoration drug.

Results showed positive outcomes and statistically significant effects on muscle function endpoints using this drug combination.

Patent application has now been filed to protect the use of the combination treatment, with results on further ongoing investigation anticipated by Q1 of this year.

Universal Biosensors (ASX:UBI)

UBI has recruited the last patient and completed enrolment for its 360-patient “Xprecia Prime” PT/INR blood coagulation clinical study.

The clinical study protocol was discussed at a FDA Pre Submission meeting and patients were enrolled accros the prescribed PT/INR measuring ranges. The study was conducted at five clinical sites in the US.

The study is designed to provide clinical evidence as to the performance and safety of Xprecia Prime, and will be used in UBI’s 510K submission to the FDA, which is expected to be lodged during Q1 2023.

Additionally, UBI has launched its fructose biosensor test, which is the fourth test on the Sentia wine testing platform.

At the same time UBI has relaunched its glucose test, which is the partner test used with fructose to measure Total Residual Sugar during the winemaking process.

Regeneus (ASX:RGS)

Regeneus fell 13% yesterday after receiving a notice of termination from Kyocera.

in August 2020, Regeneus entered into a licence and collaboration agreement with Japan’s Kyocera for Kyocera to exclusively develop and commercialise Regeneus’ stem cell platform technology Progenza for the treatment of knee osteoarthritis in Japan.

Regeneus has since received aggregate upfront and milestone payments of approximately $7.1m.

The agreement included development targets and target dates agreed by the parties, including creating procedures for the manufacture of Progenza for the clinical trial to be held in Japan, which was expected to be achieved in Q4 2022 or Q1 2023.

Kyocera has failed to meet this development target.

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