ANANDA Developments has today announced the acquisition of MRX Global in a deal set to transform the company’s offering.
The £2m acquisition deal will see the Aquis Stock Exchange-listed cultivator not only significantly accelerate its road to revenue generation, but also acquire the rights to a CBD formulation that has just been approved for two Phase II clinical trials in the UK with £1.55 million of grant funding.
The trials are thought to be the first two cannabis randomised control trials (RCTs) in the UK since GW Pharmaceuticals’ trials for Epidyolex and Sativex, and Ananda says it is ‘very hopeful’ that its product could soon be funded for prescription on the NHS.
Ananda’s CEO Melissa Sturgess told BusinessCann: “We see this as the final step in fleshing out Ananda into being a proper pharmaceutical company that can deliver sensible medicines… This is a really big step closer to NHS funding.”
The deal
MRX Global and its subsidiary MRX Medical, previously Montana Global, were set up by Ms Sturgess and her business partner in 2019.
The company was originally set up to produce CBD as a food supplement, but was unable to scale commercially.
“It really didn’t get commercial legs, as a lot of these CBD businesses didn’t. But it became increasingly apparent that actually the work that we put into a formulation was applicable to medical cannabis.”
This proprietary methodology reportedly allows MRX to formulate cannabis medicines that are ‘essentially THC free’, making them well suited for research purposes.
Its compound MRX1 is now set to be provided by the company for two upcoming RCTs carried out by the University of Edinburgh into the effects of CBD on endometriosis and chemotherapy-induced peripheral neuropathy (CIPN).
The RCTs have now received £1.55 million in grant funding. While the grant funding is subject to ‘final contractual agreements and governance approvals’, the studies’ directors are reportedly confident the funding will be secured.
According to Ms Sturgess, it was this milestone that made the acquisition commercially viable for Ananda.
“Ananda was, and still is, very small, and it didn’t really have the capacity to acquire a business that was so early stage and high risk.
“It wasn’t until we got these clinical trials with the University of Edinburgh, and those funding requests were granted, that we realised this is real. If the regulator likes it, then this has got legs.”
Subject to shareholder approval, Ananda will purchase 100% of the issued share capital of MRX Global for £2.02m, satisfied by the issue of 673.8k new ordinary shares at a price of 0.3p per share.
Alongside this new share issue, Ananda has also raised £326,200 in new capital to ‘support its acquisition and provide working capital’.
‘Progression’ of Ananda’s business model
In May 2022, Ananda told BusinessCann that it was pursuing a ‘best, not first’ strategy for its cultivation operation in Lincolnshire and, thanks to an ‘unlimited debt facility’, was in no rush to bring products to market.
Now, however, the company has significantly accelerated its route to revenue generation, with MRX’s CBD oil reportedly commercially ready.
“We’ll be able to launch the first of these formulations in the next couple of months. We’re just finalising agreements with clinics and talking to prescribers about the medicine,” Ms Sturgess explained.
However, Ananda maintains that its long-held strategy to bring both flower and oil products to market is still in place, and it hopes to eventually be able to supply MRX’s products via its GMP grow facility.
“What we see in the short term is MRX oils straight to market, flower to market when we get there, and then ultimately our ambition will be that we will provide the API from our own source into the MRX medicines.”
While Ms Sturgess was reluctant to provide any timelines, as much of its progress will be dependent on regulators, she said Ananda had now completed its first year of trials and was in the pre-qualification tender process to build its GMP cultivation facility for the manufacturing and processing of flower.
Cannabis on the NHS
While MRX will enable Ananda to begin generating revenue in the short term, its grander ambitions remain focused on expanding cannabis prescriptions on the NHS.
The NHS and National Institute for Clinical Excellence (NICE) have repeatedly referred to the lack of RCT evidence as a key barrier to expanding prescriptions of medical cannabis on the NHS.
With new RCTs finally being launched in the UK, Ananda is confident their success would be ‘significant for unlocking NHS funding for MRX, which would open the door for large-volume prescribing’.
Not only have these trials skipped Phase I to go immediately into Phase II, but they may also even be able to skip Phase III.
“We’re not manipulating the molecule. We’re not looking at unusual delivery methods. So, what we’re doing is kind of known and considered to be safe, so it may well be, in the UK at least, that we don’t have to go to Phase III.
“We’re very hopeful that, if these clinical trials are successful, the NHS will fund the prescribing of these unlicensed medicines. We’re also very hopeful that we will get these medicines licensed by the NHS as well.”
