Incannex secures landmark deal, reinforcing position as a global medicinal cannabis and psychedelic powerhouse

Incannex announces key acquisition plan to strengthen its position as a global leader in the cannabinoid, psychedelic, and combination pharmaceutical sector.

Medicinal cannabis and psychedelic clinical development company Incannex Healthcare (ASX:IHL) has snapped up the leading cannabinoid biotech company APIRx, for US$93 million (A$125m) in a deal that will supercharge Incannex’s technical and drug development capability.

APIRx was established as a corporate entity in the Netherlands to amalgamate the intellectual property assets of medicinal cannabinoid pioneers, and APIRx co-founders Dr George Anastassov and Lekhram Changoer.

It is a massive asset.

Trailblazers, Anastassov and Changoer have collaborated since 2003 and in that time have developed the world’s largest privately-held patent portfolio of pharmaceutical cannabinoid inventions, ideas and products.

APIRx focuses on research and development of prescription pharmaceutical cannabinoid medicines. It has 22 active pre-clinical and clinical projects at various stages of development.

Promising therapy candidates

APIRx has been working on cannabinoid treatments for pain management, dementia, Parkinson’s disease, restless leg syndrome, gastrointestinal diseases, periodontitis, addiction disorders, skin, and ophthalmic conditions.

Anastassov and Changoer previously licensed their technology to AXIM Biotechnologies, where they were part of the lead management team, overseeing an all-time-high market capitalisation of ~US$1.2B in 2017 before the assets were again fully privatised under the ownership of APIRx.

Several pre-clinical studies and clinical trials over the APIRx therapeutic candidates have been undertaken to justify the intellectual property portfolio, which includes 19 granted patents and 23 pending patents.

Key patents relate to sustained oral mucosal delivery of cannabinoids and cannabinoid combinations (through chewing gum), oral care cannabinoid compositions That’s toothpaste), cannabinoid ophthalmic solutions (likely eye-drops), topical compositions containing cannabinoids (soothing unguents) and cannabinoid extraction technologies.

Medicated chewing gums

One focus of the combined APIRx and Incannex group will be ongoing development of APIRx’s CheWell, CanQuit and CanQuit-O cannabinoid combination medicated chewing gums (MCGs) to treat cannabis addiction, nicotine addiction and opioid addiction.

Opioid addiction in the United State is a huge problem and one that needs accessible solutions.

MCGs are fast acting as they release the active ingredients into the oral mucosa, reducing the potential for gastric intolerance amongst patients. They are also an extended-release dosage form. These qualities, amongst others, make MCGs an excellent delivery system for medicinal combinations designed to treat addiction disorders and pain.

An example of a successful MCG is over-the-counter nicotine chewing gums.

Strategic Rationale

The acquisition of APIRx is an opportunity tostrengthen Incannex’s position as a market leader at the forefront of cannabinoid and psychedelic treatment development.

It will expand Incannex’s addressable market globally by more than US$400 billion annually while also expanding the Company’s technical capacity with some of the industry’s longest standing, best-known scientists.

As well as adding a large portfolio of intellectual property, the acquisition will expand Incannex’s drug delivery capability to include APIRx’s patented delivery technologies.

Anastassov and Changoer are experienced clinical researchers with medical and scientific backgrounds who will be employed by Incannex on a full-time basis following completion of the acquisition.

Anastassov and Changoer are experienced with liaising and negotiating with the U.S. Food and Drug Administration (FDA), having undertaken numerous pre- investigational new drug (IND) meetings, and opening two IND applications for the MedChew RL and the MedChew Dronabinol medicinal product candidates.

Furthermore, APIRx has strong relationships with international academic institutions and research hospitals including Mount Sinai School of Medicine, New York, University of St. Andrews (UK), Free University of Amsterdam (NL), University of Wageningen (NL), and Mauritsclinics (NL).

Incannex and Victoria’s Monash University recently announced they would collaborate on ground-breaking research to advance treatment for severe forms of anxiety disorders using virtual reality combined with psychedelics.

Incannex postions for major global play

“With many sizeable, addressable markets and intellectual property spanning a multitude of unmet medical needs, we’re positioning Incannex to be a significant player in the pharmaceutical sectors of the future,” he said.

“I’m excited by this acquisition opportunity on multiple fronts and look forward to working with the APIRx team to deliver on our vision of providing treatments which will make genuine differences to the lives of millions of people”.

Anastassov said their extensive experience and broad IP asset base is perfectly positioned for further development and expansion within Incannex.

“Both companies have proven track records to deliver innovative projects and the goal of this transaction is to create the global leader in the cannabinoid, psychedelic, and combination pharmaceuticals space,” he said.

“We intend to do this by innovatively addressing conditions for which there are only modest, or no safe and effective, treatment options.”

Changoer said APIRx is bringing new drug delivery technologies backed by patents that, when combined with Incannex’s existing intellectual property, will result in the company being a state-of-the-art, industry-leading cannabinoid and psychedelic platform.

“A post-acquisition Incannex will also have greater presence in the United States and Europe, which may benefit the Company to more efficiently undertake multi-site clinical trials that will ultimately be required for FDA clinical trial programs aimed at drug approval”. Changoer said.

Next steps in deal

The deal remains subject to shareholder approval. In anticipation of completion the Incannex medical and scientific team are assessing APIRx projects to best prioritise development of the APIRx therapeutic candidates.

Incannex anticipates budgeting approximately A$5 million of expenditure on the APIRx product suite in the first 12 months.

However, the budget may be re-assessed to up to A$10M following the conclusion, in April, of the loyalty option offer, that could raise up to a~A$28M in development capital for the Company.

This article was developed in collaboration with Incannex, 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.