Emerald Clinics breaks into UK medical cannabis market; shares surge 179pc
Health & Biotech
Health & Biotech
Emerald Clinics (ASX:EMD) has made its foray into the lucrative UK market after inking a deal with a subsidiary of a major medical cannabis company.
Emerald is partnering with Canopy Growth subsidiary Spectrum Biomedical and will deliver a product registry providing Spectrum insights into its cannabis-based medicines in treating various medical conditions.
This includes the safety and pharmaceutical effectiveness but also the cost effectiveness of the treatments.
Emerald already has a partnership with Canopy Australia, but this is the company’s first major deal in the UK and Europe.
Under the deal, Emerald will be paid a design and development fee of $270,000 up front as well as a patient fee of $542 per person.
Shares in Emerald have lagged since it made its debut on the ASX in February at 20c per share.
But shares jumped as high as 179 per cent on Monday morning, hitting a one-day peak of 12c.
Speaking with Stockhead, Emerald boss Michael Winlo admitted investors may have had their doubts that cannabis data could be as lucrative as selling cannabis medicines.
But he believes they may now be starting to realise the value in cannabis data.
“I do hope they take that away because it’s certainly been our strong conviction, that this is a real business model,” Dr Winlo said.
“We know that there’s a strong interest and desire for high-quality, real-world evidence to support drug registrations, to support cost payment decisions.
“And so this is well earned recognition that there is value in what we’ve been doing and so that’s encouraging.”
Emerald chairman Stewart Washer told Stockhead last week that for medicinal cannabis to become mainstream, more clinical data was a key factor.
Emerald has a network of clinics where it captures and aggregates data that can be used to evaluate the safety and efficiency of cannabinoid medicines.
“At the moment medical cannabis hasn’t broken into mainstream medicine because if you look at the sales, they’re still tiny,” Washer said.
“They’re hundreds of millions of dollars but that’s not even a small percentage of something like Lipitor (cholesterol lowering drug) or one of the big pharmaceutical drugs.
“So if you say ‘look we’ve got a treatment for insomnia’ and have real clinical evidence around that you can potentially crack through into mainstream medical markets.”
Given this rising need for more solid clinical data, Dr Winlo believes more international deals, including in the UK, are in Emerald’s future.
The UK medicinal cannabis market is expected to reach almost £1 billion ($1.82bn) by 2024.
“It effectively initiates the expansion of our clinical service into the UK which is also exciting and allows us to start pursuing that in the coming weeks and months,” Dr Winlo said.