GWPH - Investing in Cannabis Biotech Stocks
Thanks to the emergence of the marijuana investing space, new plays are being brought to the market for public capital to support.
As such, some marijuana companies have turned to the medical sector as a source of inspiration to find the benefits of the cannabis plant against various diseases.
Here, the Investing News Network (INN) offers investors a closer look at the state of the cannabis biotech market and which companies are grabbing the attention of investors.
The marijuana industry offers investors novelty plays in various spaces including emerging medical efforts.
Investing in the marijuana space has turned to be a volatile play for shareholders.
With the emergence status of the market and the reliance on new jurisdictions through arduous legalization processes, the stock market for these companies has shown dips and rallies at unexpected times.
This is starting to change as the leaders of the space continue to separate in market capitalization and with the types of partners acquired from established industries.
The potential entry of institutional investors in the marijuana space also inches closer, potentially bringing more stability.
Biotech, and life science investing as a whole, has proved to be designed as a long-term play for investors seeing value in the development of medical research and clinical trials.
And while marijuana investing is gaining some stability, outside of a few leading stocks, the market still experiences extreme volatility.
Unlike the extremely volatile cannabis space, biotech plays often aim to become a long-term hold for shareholders. As trials for products evolve, critical moments arrive for investors with trial approval and launch of new drugs or products.
The pipelines for these companies are designed to offer a variety of working models for biotech companies and provide investors with multiple candidates that could accelerate with a trial approval.
In March, a Canadian biopharmaceutical firm released data from a consumer study showing patients are willing to trust doctors if evolved medical cannabis therapies are offered.
Steeve Neron, senior vice president of marketing and medical affairs with Tetra Bio-Pharma (TSXV:TBP,OTCQB:TBPMF), told INN the results of standardized clinical trials with marijuana-based medicine will be the ultimate test for consumers.
Neron added Canadians would require for these treatments to be covered by a public or private insurance.
In Canada, patients have been able to access medical cannabis from licensed producers (LPs) such as Canopy Growth (NYSE:CGC,TSX:WEED) or Aurora Cannabis (NYSE:ACB,TSX:ACB).
Medicinal marijuana has even found its way to the online shelves of one of Canada’s largest pharmacy retailers: Shoppers Drug Mart, a Loblaw Companies (TSX:L) subsidiary.
GW Pharmaceuticals opens the door to fellow biotech companies
The relationship between the cannabis and biotech markets received a boost in 2018 when GW Pharmaceuticals plc (NASDAQ:GWPH) obtained an approval from the US Food and Drug Administration (FDA) for its cannabidiol-based (CBD) medicine.
Called “epidiolex,” this medicine is designed to treat seizures related to Lennox-Gastaut syndrome (LGS) or Dravet syndrome in patients two-years old or older.
As is the strategy with multiple drug trials, GW focussed on a rare disease to target with epidiolex.
In February, as part of a quarterly update to shareholders, GW disclosed over 4,000 patients had completed enrolment forms during the first two months of sales for epidiolex.
The pharmaceutical firm secured net sales for epidiolex of US$4.7 million from November to December last year.
“We are pleased by the high level of physician and patient demand for Epidiolex, and by the number of payors that have already made favorable coverage determinations for the product,” Justin Gover, GW’s CEO, said in the press release.
This landmark approval signaled a target for emerging cannabis-based medicines developing cannabinoids in the plant for advanced treatments.
Since the approval of epidiolex by the FDA, a positive sentiment on CBD transformed into a bullish stake in the entire CBD sector.
Neal Gilmer, marijuana analyst with Haywood Securities, previously told INN he was bullish on the entire CBD space thanks to the amount of anecdotal information already swaying consumers.
Stocks to follow in the market
As part of its collection of stocks The Marijuana Index, tracks companies immersed in the biotech sector using cannabis in some form.
As defined by the index regulators, these companies “must have a material involvement in the cannabis or hemp industry to be included.”
Here are some of the stocks the index tracks in the biotech space based on largest market capitalization:
- Cara Therapeutics (NASDAQ:CARA)
US$18.37/ Market Cap: US$754.57 million/ Year-to-date: +26.17 percent increase
Thus traditional biotech company is also exploring possibilities with the use of cannabis thanks to the preclinical development of CR701, a test novel therapeutic designed for neuropathic pain.
- Corbus Pharmaceuticals (NASDAQ:CRBP)
US$6.70/ Market Cap: US$440.98 million/ Year-to-date: +2.29 percent increase
Corbus is a synthetic drugmaker working on cannabinoids for drug development. Its candidate Lenabasum is a synthetic cannabinoid currently in trial for dermatomyositis, cystic fibrosis and systemic sclerosis, according to CNBC.
- Insys Therapeutics (NASDAQ:INSY)
US$4.14/ Market Cap: US$319.30 million/ Year-to-date: -4.83 percent decrease
Recently this specialty pharmaceutical company informed shareholders of positive test results from a pharmaceutical-grade CBD oral solution to treat refractory pediatric epilepsy.
- MediPharm Labs (TSXV:LABS,OTCQB:MLCPF)
C$3.45 / Market Cap: C$302.09/ Year-to-date: +87.78 percent increase
With the rise of medical grade, cannabis extraction services have become key for the marijuana space. As such MediPharm offers buyers with pharmaceutical-grade cannabis oil and concentrates. The company also offers cannabinoid isolation and purification services.
- 22nd Century Group (NYSE-A:XXII)
US$1.97/ Market Cap: US$238.07 million/ Year-to-date: -26.22 percent decrease
This company is primarily a tobacco venture working on cigarettes with nonaddictive levels of nicotine. As part of a partnership the company has been working on similarly modified cannabis products.
- Cardiol Therapeutics (TSX:CRDL,OTC Pink:CRTPF)
C$5.99 / Market Cap: C$137.68/ Year-to-date: +39.30 percent increase
This biotech company is working on the development of pharmaceutical cannabinoids for the use in its nanotherapeutics programs for heart failure. As par of its active development pipeline the company holds a variety of candidates dependant on CBD.
- InMed Pharma (TSX:IN,OTCQX:IMLFF)
C$0.57/ Market Cap: C$105 million/ Year-to-date: +46.15 percent increase
This pre-clinical stage biopharmaceutical company researches cannabinoid therapies in combination with other drug treatments.
- Zynerba Pharmaceuticals (NASDAQ:ZYNE)
US$4.97/ Market Cap: US$102.82 million/ Year-to-date: +33.60 percent increase
This pharmaceutical company is focused on the development of synthetic cannabinoid therapies. Zynerba is working on a trial to evaluate the use of its CBD candidate product in patients aged three to 17 with Fragile X Syndrome.
- Cure Pharmaceutical Holdings (OTCQB:CURR)
US$3.87/ Market Cap: US$101.27 million/ Year-to-date: +46.21 percent increase
This company operates in the life science space thanks to its key oral thin film for medical uses. In terms of cannabis work, Cure plans to use its technology for delivery of cannabinoids.
Investor takeaway
When considering marijuana stocks, investors don’t have to be limited to pure growers. At the rate the industry keeps advancing, plays in the medical market from cannabis companies are offering investors novelty growth plans.
The legalization movement across the globe and the early seen benefits of medical marijuana for patients are set to continue pushing the cannabis industry for medical use.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: MediPharm Labs and Cardiol Therapeutics are clients of the Investing News Network. This article is not paid-for content.