The Unique Challenges Facing Cannabis-based Pharma




In June 2018, the FDA approved the first-ever pharmaceutical derived from the cannabis plant, Epidiolex (cannabidiol, CBD). GW Pharmaceuticals’ lead therapeutic reduces the frequency of seizures associated with two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome. The oral solution is approved for use in patients 2 years of age and older.

In the U.S., marijuana is a Schedule 1 drug, along with heroin and LSD. Three months after its approval, as required by law, Epidiolex was rescheduled to a Schedule 5 drug, the lowest restriction classification, due to its low potential for abuse. The approval was seen as a breakthrough by the leaders of the growing number of pharmaceutical companies working to bring cannabis-derived pharmaceuticals to market. That’s because these companies face a unique tangle of legal, scientific, and societal challenges — and they believe GW is paving the way for them to follow.

GW’s leadership, while enjoying the recent victory, is not getting ahead of itself. The company’s CEO, Justin Gover, noted, “The last few years have been tremendously exciting for this company, but it has taken a long time and a lot of learning. It took us 20 years to become an overnight success.” GW’s accomplishment was celebrated by the industry as a whole, says Eyal Barad, CEO of Cannabics Pharmaceuticals. Barad’s company, founded in 2004, is developing cannabinoid-based precision therapeutics for the treatment of cancer. “There is a whole industry being developed in front of our eyes. It’s really the Wild West.”

Gover says the first challenges he faced were financial, but rooted in societal views of marijuana and scientific skepticism over being able to meet FDA requirements using a botanical as source material. Gover wrote the business plan for the company in 1999 and then set about trying to raise the initial round of funding. “It wasn’t the easiest company to get off the ground. Back then, the notion of taking an illegal plant, which was essentially known for its recreational effects, and trying to create a prescription medicine from this source was seen as a huge risk and challenging undertaking for good reason.”


The biggest challenge facing companies looking to bring a cannabis-based pharmaceutical to market in the U.S. is the legal classification of marijuana as a Schedule 1 drug. Handling or shipping marijuana products in any way is a federal offense. For most startups, getting approval in the U.S. is the ultimate goal and the first step toward global commercialization. But, because of U.S. federal laws, even U.S.-based companies choose to conduct R&D in other countries, while those that are based elsewhere have plans to move to the U.S. when preparing to file for FDA-approval. Such is the case with GW. The company was founded in the U.K., where R&D was not hindered to the same degree as in the U.S. Still, the company had to obtain licenses to be able to do research using cannabis plants. “We had to form relationships and build a reputation of trust with regulators so that they knew our interests were truly led by science,” said Gover. Today, GW has 500 employees in the U.K. and about 250 based at the company’s U.S. subsidiary, Greenwich Biosciences, in Carlsbad, CA.

Likewise, Cannabics is a U.S.-based company whose licensed R&D takes place in laboratories in Israel. Barad says the U.S. is missing out. Israel has had medical research regulations in place for 10 years, while the U.S. Senate Bill H.R. 5520, called the VA Medicinal Cannabis Research Act of 2018, is awaiting a vote. “We are not touching the product or plant in the U.S. But, there is plenty of other work to do in the meanwhile.” Barad says Cannabics will be poised and ready when marijuana is downgraded from Schedule 1 status. “As time passes, more and more people and the governments they elect are realizing that the cost of incriminating people is too high, while the potential of collecting taxes is phenomenal. It changes cities, states, and countries. We are watching it happen in Canada.” The kind of work GW has being doing for 20 years was not possible in the U.S., says Marc Ullman, of counsel to Rivkin Radler in New York. “It’s no accident GW is based in the U.K.” Ullman has represented clients in the herbal trade and analytical laboratories who have FDA and DEA compliance concerns relating to the products they sell and the services they provide. “The federal government remains extremely hostile to anything having to do with marijuana, in particular the DEA.” Many banks refuse to handle funds from marijuana-based companies, Ullman says. Shipping source material is also illegal.

“It took us 20 years to become an overnight success”

Justin Gover
CEO, GW Pharmaceuticals


Conducting clinical trials takes on a whole new level of complexity when a company must ensure that physicians and study participants aren’t going to be arrested for taking part in the trial, says Guy Chamberland, CEO of Canada-based Tetra Bio-Pharma. “You need to have controlled substance approval for the physician and make sure there is no diversion of the drug.” Chamberland says he spent a considerable amount of time in 2016 working through such regulatory requirements. “Today it is routine, but back then we had to think about permits to ship even within Canada. You can’t just move it around.”

In November 2018, Tetra Bio-Pharma announced the signing of a joint venture with Altus Formulation to formulate, develop, and deliver cannabinoid-derived therapeutics using abuse-deterrent technology, breakable sustained- release tablet technology, and nanotechnology to enhance the solubility of its THC and CBD products. Tetra Bio-Pharma plans to file an NDA with the FDA in 2019 for its lead compound PPP001 that it proposes as an alternative to the opioid fentanyl in the management of breakthrough cancer pain. Despite the stigma, Tetra has chosen to keep THC in some of its products. “We believe a lot of the pharmaceutical benefits of cannabis are associated with THC,” Chamberland says.


The complex science behind botanicals also presents its own challenges. “The first thing you need to do is identify the specific chemical entity that is going to achieve the desired result,” Ullman says. “With botanicals, that is really hard, because these plants are usually efficacious as a naturally occurring cocktail.” In recognition of this challenge, the FDA has developed a specific pathway to market for botanical drugs, though only two have been approved to date with a third about to enter Phase 3 clinical trials. GW has shown that it is possible to pull out one of these naturally occurring compounds and identify a positive effect. They synthesize it in a highly purified form and shepherded it through the drug-approval process.

For its part, Cannabics is looking to use novel drug-screening tools and artificial intelligence to better understand cannabinoids’ effect on various types of cancer cells. This presents a Big Data challenge. “There are over 100 different kinds of cannabinoids found in marijuana. Maybe eight are under study,” says Barad. Likewise, cancer is not one disease. “We found various apoptotic effects on different cancers.” Recently, the company has been granted a patent in Israel on its core technology of screening the effectiveness of cannabis compounds on human biopsies. “As we get into that testing, we are beginning to understand the complexity. There are huge amounts of data.” For example, drug sensitivity tests require 8,000 parameters be measured per cell.

Gover says the field of cannabis-derived therapeutics requires an understanding of risk and the ability to manage it. “This is an industry full of relentless challenges and obstacles.” However, the history of cannabis compels industry leaders to take on these challenges. “The unique opportunity here is that this is a plant that has been used medicinally for literally thousands of years,” said Gover. This history is reason enough for companies such as GW to consider and pursue the possibility of new and novel therapeutics sourced from the cannabis plant.


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