For Australian medical cannabis company Cymra Life Sciences, there’s a major market opportunity in the use of clinically-backed cannabis solutions for chronic pain.
As it moves towards a potential ASX listing in the second half of this year, Cymra has a highly experienced board that us helping it to execute on a its targeted approach around genetic development and its clinical development program for chronic pain.
Cymra CEO Joel Hardy spoke with Stockhead this week, following the company’s recent success in obtaining a cultivation and manufacturing permit from the Office of Drug Control (ODC).
With these two permits, Cymra now has the clinical pathway to bring its products to market, with regulatory approval across the entire supply chain.
Unique market opportunity
In terms of where Cymra is focused for clinical development, Hardy highlighted that the company occupies a separate niche in the market compared to competitors jockeying for position in the over-the-counter CBD market.
For Cymra, clinically-backed cannabis solutions using THC (Tetrahydrocannabinol) – the psychoactive component of cannabis and potential analgesic– offer a more compelling market opportunity.
“That’s a key difference for us,” Hardy says. “We think CBD will be an over-the-counter drug someday but that’s not where we think the biggest market will be.”
Instead, Cymra is targeting the multi-billion dollar market for pharmaceutical opiate products used for pain relief. He cited post-COVID data out of the US, which showed that overdose fatalities from opioid products continued to rise in 2020.
“For long term chronic pain, we believe there is a huge unmet need in the market for chronic pain patients alongside the terrible long term addiction and side effects provides an opportunity for something like cannabis. And we plan to run clinical trials to prove that it’s a an overall better product than opiates as a second line therapy,” Hardy said.
“So instead of going to your doctor for, say back pain where they might prescribe an opiate that contains codeine – that’s a channel where THC products can potentially offer good pain relief with less harmful side effects.”
Cymra is planning to run a Phase 1B dose escalation study on its proprietary formulation as a 2nd line therapy for chronic pain in September and following that a large scale Phase II double blinded placebo controlled study in 2022.
He added it’s also a sector where early signs of government support are forming, through Australia’s large medical cannabis program, amid increasing urgency to reduce the impact of opiate addiction and give doctors an alternative option for chronic pain patients.
Genetic focus
Just as importantly, Cymra’s is focused on the breeding of patented genetics that will allow it to operate as a platform supplier to cultivators.
Hardy compared the model to established agriculture companies such as Nufarm (NUF:ASX ) Graincorp (GNC:ASX, Driscoll’s berries (US) and Costa (Australia).
“AgScience companies develop the genetics for a specific crop. And they sell that to farmers using a royalty model because it means those farmers can then generate a higher crop yield,” he explained.
“If you think about cannabis as an agricultural crop in the future, unless you’re doing very small batches it’s the same concept – you will always want a higher yield with lower labour costs.”
Importantly, Cymra’s recent permit gives it regulatory clearance to start developing high-yield plant genetics for THC crops, as well as CBD.
“As supply of cannabis increases, all cultivators will need to get more efficient,” Hardy says. “And in the race to generate more yield they’ll hopefully turn to someone like us.” “That’s where the market’s going, and as production gets more efficient, companies will either have to do their own breeding work, or potentially come to us for better genetics that are higher yield.”
Cymra is “currently the only company in Australia with a commercial permit performing genetic supply”, he said.
It adds up to a highly targeted approach to success, with a board that has deep industry experience in pharmaceuticals, nutraceuticals and genetics in a sector with high and complex barriers to entry while the regulatory environment for global THC legalisation remains is still tightly controlled.
Cymra planted its first commercial crop two weeks ago, and has imported the seeds to plant its first commercial crop using THC in the next few months.
This article was developed in collaboration with Cymra, 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.