Good news for pot stocks as US approves its first medical cannabis drug
Health & Biotech
America’s powerful Food and Drug Administration (FDA) has just approved the country’s first medical cannabis drug.
The regulator approved Epidiolex, an orally-taken cannabis drug for children who have two rare forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome.
The approval is a great sign for ASX-listed cannabis stocks — most of which are focused on medicinal products.
>> Scroll down for a table of ASX-listed cannabis stocks
But before it can be sold, the US Drug Enforcement Administration (DEA) will have to reclassify the drug from a Schedule 1 narcotic — alongside LSD and heroin.
The DEA will either need to reclassify cannabis generally, or just cannabidiol (CBD) which is the active component in Epidiolex and many other medical cannabis drugs.
Strong trial data from GW Pharmaceuticals helped push the drug through the process.
The drug has been studied in three randomised, double-blind, placebo-controlled clinical trials involving 516 patients with either Lennox-Gastaut syndrome or Dravet syndrome.
It proved to be effective in reducing the frequency of seizures, but was also accompanied by a range of side effects including sleepiness, diarrhea, sleep disorders, and infections.
Lennox-Gastaut syndrome and Dravet syndrome develop in childhood and are notoriously treatment-resistant. Most patients need multiple seizure medications and the syndromes come with high rates of early mortality.
“Controlled clinical trials testing the safety and efficacy of a drug, along with careful review through the FDA’s drug approval process, is the most appropriate way to bring marijuana-derived treatments to patients,” said FDA commissioner Dr. Scott Gottlieb.
“We’ll continue to support rigorous scientific research on the potential medical uses of marijuana-derived products and work with product developers who are interested in bringing patients safe and effective, high quality products.”
Australians going to the US
This is good news for Australian medical cannabis companies who are focused on the US.
Medlab Clinical (ASX:MDC) boss Sean Hall told Stockhead last week that he is meeting with the FDA in September and hopes to have their drug, Nanabis, approved for sale next year.
Botanix (ASX:BOT) founder Matt Callahan says their approach to making CBD drugs addresses the FDA’s specific concerns about data.
He says studies on their acne and dermatitis treatments are being conducted in accordance with FDA rules.
While Canada is the legal market for recreational and medical cannabis, the US is still much bigger.
Americans are thought to be buying about $US50 billion ($68 billion) worth of legal marijuana a year — a number expected to grow to $US75 billion by 2030, says research firm Cowen & Co.
By comparison marijuana will be a $US6.5 billion industry by 2020 in Canada, according to Canada’s biggest bank CIBC.
Right now recreational marijuana is legal in eight US States while medical cannabis is allowed in another 22 States.
That number could grow if President Trump ends a federal blanket ban on marijuana which currently conflicts with State laws.
Here’s a recent table of ASX-listed cannabis stocks:
Scroll or swipe for full table. Click heading to sort