Rhinomed does US deal to put cannabis up your nose
Anti-snoring company Rhinomed has clinched a 12-year cannabis licensing deal with a New York company, in what is the first US medical marijuana contract for an Aussie pot stock.
The deal is for Rhinomed’s (ASX:RNO) anti-snoring nose stent Mute, which Columbia Care are going to adapt to use to deliver a slow-release dose of cannabis for, initially, sleep apneoa, pain control and PTSD.
The stock rose 17.5 per cent on Monday morning to touch 33.5c, after a run up that began in June this year.
The company is the first listed Australian pot stock to open a direct, revenue generating pathway into the still-restricted US medical cannabis market.
Elixinol Global (ASX:EXL), the first profitable pot stock here, is working successfully in the US but in the hemp sector, not medical cannabis.
Cannabis is illegal federally in the US but legal recreationally in eight States and in Washington D.C., medically in another 22 States, and nine more are expected to legalise one or the other by 2020.
By licensing its technology, Rhinomed has removed a key barrier to entry to the US market — it’s not actually dealing in pot.
Show me the money
Rhinomed will receive a “double-digit” royalty per product sold and a “double digit” share of the net profits from retail sales.
It says it’s too early to guess how the deal will affect 2019 revenue, and won’t reveal the size of the fees earned.
Any new intellectual property to come out of the agreement will be jointly owned by both companies.
The nose stent will join Columbia Care’s other drug delivery methods, which include pills, a liquid that is taken under the tongue, and a vaporiser for oil.
Rhinomed CEO Michael Johnson says there is a large commercial opportunity in the nasal stent-cannabis delivery field.
“Nasal delivery of cannabinoids opens up a new and exciting market opportunity and has the potential to set a new standard by providing a better and more reliable and repeatable dosing experience,” he said.
Rhinomed’s Mute anti-snoring nose stent has been the fastest-growing product in the Nasal Strip category in the US, growing at 299 per cent during the period. It is sitting as the fifth most popular brand overall.
Who’s who in the US
There are six pot stocks operating or looking to operate in the giant US market, especially since the FDA approved the first cannabis drug earlier this year, Epidiolex.
Medlab Clinical (ASX:MDC) is taking a dossier about its cannabis drug NanaBis to the FDA this month to start the process towards approval in the US.
eSense-Lab (ASX:ESE) is trying to crack the edibles market with chocolate that has the medical benefits of cannabis ‘terpenes’, or odiferous oils, without the parts that get you high.
Chapmans (ASX:CHP) owns a stake in a company that owns a stake in a convertible note to Aunt Zelda’s in California.
And Botanix Pharma (ASX:BOT) is looking to run clinical trials for its dermatitis drug in the US, saying kick-off talks a month ago with the FDA went well.