• Slow progress of acceptance in legal and medical circles globally has seen ASX cannabis stocks face volatility
  • MGC Pharmaceuticals says after a “significant transformation” in recent years, it’s distancing itself from  cannabis classification
  • Bioxyne is looking to submit its first clinical trial to a human research ethics committee (HREC) in January 2024

There was a time when pot stocks were an investor favourite on the ASX.  Much as lithium has become a market darling in the energy transition,  demonised cannabis and psilocybin were seen as transitioning from an illegal drug substance to a legal one with greater potential use in the medicinal sphere.

However,  slow progress of acceptance in legal and medical circles worldwide has seen ASX cannabis stocks face volatility.  Australia legalised the use of medicinal marijuana in 2016, but recreational use remains illegal except in the ACT.

Meanwhile, the Victorian Government is looking to commence a trial to assess the driving abilities of medicinal cannabis users.

From July 1, 2023  changes by the Australian Therapeutics Administration (TGA) saw psychiatrists authorised to prescribe products containing 3,4‑methylenedioxy‑methamphetamine (MDMA) and psilocybin for use in psychedelic-assisted psychotherapy to treat specific mental health conditions, including post-traumatic stress disorder (PTSD) treatment-resistant depression (TRD)

Worth reading – MDMA and magic mushrooms have arrived: Australia lets psychs find a new way for happy to fight sad

In the US – the world’s largest healthcare market – the Department of Health is recommending a downgrade of marijuana’s scheduling. Additionally, a bipartisan group of US senators is advocating for state-legalised cannabis businesses to access finance through the SAFER Banking Act.

While developing medicines incorporating cannabinoids or psilocybin as active pharmaceutical ingredients (API) there are ASX companies trying to shake the categorisation as a merely a pot stock, whether to counter social stigma, regulatory ambiguities or broaden their appeal to investors. Here’s Part One of the ASX pot stocks that want to be known for much more.


MGC Pharmaceuticals (ASX:MXC)

MXC managing director and CEO Roby Zomer told Stockhead the European-based biopharma has undergone a significant transformation in recent years, distancing itself from the classification of a cannabis company, “which is still prevalent in the Australian market”.

“In a series of announcements, we have eliminated non-core activities and removed the legacy of cannabis from our operations,” he says.

“While we do produce medicines that incorporate cannabinoids as active pharmaceutical ingredients alongside non-cannabinoid APIs, it’s essential to understand that this doesn’t categorise us as a cannabis company.”

MXC is currently undertaking a dose-finding study for CimetrA, which is a phyto medicine based ingredients from curcumin and Boswellia serrata that has demonstrated effectiveness in arresting the cytokine storm in Covid-19 patients in late-stage trials.

It is also progressing Phase II studies of its phyto medicine based on phytocannabinoids called CannEpil, for the treatment of refractory epilepsy, which accounts for ~25% of the people diagnosed with epilepsy.

MXC’s strategic focus includes an initial entry into the lucrative US market by submitting IND applications for CimetrA and CannEpil to the US FDA.

Zomer says the decision to move away from the cannabis industry was driven by the observation that much of the sector remained focused on adult use rather than evolving into the pharmaceutical realm.

“This shift made it challenging for doctors to confidently provide patients with the medical remedies they require,” he says.

“In response, MGC has redirected its efforts to leverage our knowledge, experience, and field results, working closely with doctors and patients to develop medicines that undergo rigorous clinical trials and, ultimately, receive marketing authorisation.”

Zomer says it’s important to note that the cannabis industry is not fading away; it continues to serve people’s needs as access improves.

“However, MGC’s focus is on being a pharmaceutical provider rather than a part of the traditional cannabis industry,” he says.

“This strategic shift aligns us with other pharmaceutical companies, emphasising our commitment to delivering medicinal solutions.”


Bioxyne (ASX:BXN)

CEO Sam Watson told Stockhead BXN subsidiary Breathe Life Sciences hope to become the first company certified by the TGA in Australia to manufacture psilocybin and MDMA medicines under good manufacturing practice (GMP), not just for clinical trials but for commercial supply to patients via special access pathways.

“We have our GMP inspection and site audit end of this month, and following this we hope to receive manufacturing licences for the above and also various cannabis products,” he says.

Watson says BXN is also working with medicos and health practitioners to submit its first clinical trial to a human research ethics committee (HREC) in January 2024.

“Our trials, if approved by HREC, will be the some of the first revenue-generating large population (500-1000 participants) interventional studies of psilocybin,” he says.

“Our aim is to launch the first study of psilocybin in participants with cancer related depression and treatment resistant depression.

“We hope to show significant efficacy from just a single dose of psilocybin, repeated every six months.”

The company then intends to compare the efficacy and safety of psilocybin versus selective serotonin reuptake inhibitors (SSRIs) in patients with general depression.

“If we can demonstrate a single dose administered alongside guided therapy once every six months works better than daily SSRIs, the plan will be to work quickly to get our psilocybin drug registered on the ARTG as an approved treatment,” Watson says.

“This is potentially a multi-billion-dollar opportunity, and will put us years ahead of the US biotechs and psychedelic companies.”

In medical cannabis BXN is already supplying, via approved pathways, prescription THC and CBD in various forms, such as flower under its Dr Watson brand and oral mucosal oils.

And in Japan BXN has been a sponsor and supplier to Green Zone Japan and the Midori No Wa project, working with epileptic children.

In the UK BXN is a leading supplier of raw materials, novel food and consumer health products such as CBD and nootropic mushrooms, and plant based wellness products. The company is also looking at further growth opportunities in this sector.

“We believe that life sciences is not just about drugs and medication, treating disease, but about preventing it,” Watson says.

“Our brands symbolise alternate, new age, natural, botanical wellness.”

Watson says BXN wants to be a global leader in longevity, health, and lifestyle with medical studies showing the efficacy of their treatments.

He says BXN is a small high growth company, that has demonstrated profitability, is globally positioned, ahead of the curve on novel therapeutics, but trading at a tiny fraction of its potential.

“Looking at our US peers like Compass Pathways, atai Life Sciences, they’re trading at multi-hundred million valuations with little or no revenue,” he says.

“We’re trading at only ~2x and I think this is because people haven’t heard of us yet, which we are working on changing.”


The MXC and BXN share price today:


At Stockhead, we tell it like it is. While MGC Pharmaceuticals and Bioxyne are Stockhead advertisers, they did not sponsor this article.