Jazz Pharmaceuticals
Jazz Pharmaceuticals, which has become the world’s largest exporter of medical cannabis products since it bought GW Pharmaceuticals for $7.2bn last year, saw its stock price rise this week despite news that its flagship product failed phase 3 trials.
Earlier this week the pharmaceutical giant announced that its nabiximols oromucosal spray, which trades as Sativex, had failed a phase 3 trial exploring the effectiveness of the drug at treating ‘spasticity in individuals with multiple sclerosis (MS).
Sativex was approved in the UK in 2010 and has now been approved in 29 countries for the treatment of adult patients with moderate to severe spasticity due to MS.
However, the drug has not yet been approved in the US, the world’s largest pharmaceutical market worth around $2.8 trillion.
Though its other cannabis-derived medicine, Epidiolex is the only FDA approved cannabis-derived therapy in the US, the company has now hit another setback in getting Sativex approved.
According to a press release, the first and smallest of three clinical studies which Jazz Pharma is conducting over a 12 week period ‘did not meet the primary endpoint of change in Lower Limb Muscle Tone-6 (LLMT-6) between baseline and Day 21, as measured by the Modified Ashworth Scale (MAS).’
Rob Iannone , Jazz Pharma’s Global Head of Research and Development, said: “We remain committed to the nabiximols program and are actively assessing the RELEASE MSS1 trial results, which will be presented at a future medical meeting.
“We look forward to additional data from two other ongoing trials that have the potential to support a U.S. FDA New Drug Application submission.”
Despite the news, the company’s stock remained resilient throughout the week, rising just over 4%, in part thanks to a research report released by StockNews.com at the start of the week, which upgraded its position on the company from a ‘hold’ to a ‘buy’ rating.
CiiTech
CiiTech’s Chief Executive Clifton Flack announced this week that the company was pushing ahead with plans to launch an IPO, but that these had been pushed back even further.
The cannabis healthcare company declared its intention to list on the LSE at an initial valuation of £17.5m in July last year.
Earlier this year, Mr Flack told BusinessCann that these plans had been delayed due to market volatility, and that he now planned to go public sometime this year.
At the time, he also suggested that CiiTech was unlikely to be the only company planning a listing, adding that many of the companies caught up in last year’s IPO ‘frenzy’ could still launch a listing this year.
“Around the summertime, in August or July, there must have been at least 10, 15, 20 companies that started the process,” he said.
“And I know a bunch of them that have given up. But there’s a bunch that are still going through it. I think there’s a bunch more that will come back online and give it a go.”
Speaking to Proactive Investors this week, he announced that plans for an IPO had now been pushed back even further to ‘Q1, Q2, maybe the back-end of 2023’.
He said that with the ‘softening of the markets’ in general, the poor performance of Canadian cannabis stocks and the war in Ukraine, ‘the market is just not viable’.
According to Mr Flack the company began the process ‘almost 12 months ago’, but subsequently stopped the process in March this year.
“It was a tough decision as it was a long process, we’ve been through a lot, it cost a lot of money. But I know now with hindsight six months on it was the right decision.”
US Stocks Prices Are Making EU Investment Difficult
Yesterday the Motley Fool’s David Jagielski published an article exploring whether Aurora Cannabis’ stock was ‘too cheap to pass up right now’.
The Canadian cannabis giant’s fall from grace has seen its stock value dive from peaks of over $150 in 2019, to just $1.70 at the time of writing.
In June, Cantor Fitzgerald upgraded their ratings for Aurora Cannabis despite it continuing to make billions in losses.
According to Cantor Fitzgerald’s Managing Director Pablo Zuanic, Aurora is one of the few companies positioned to cash in on the upcoming German recreational market, thanks to its licences to grow in the region, which could overtake Canada in terms of market size.
The continually depressed stock price of North American cannabis giants like Aurora, are making the investment case for many upcoming European cannabis firms much harder for investors to justify, according to Navy Capital’s CEO and Founder Sean Stifel.
Speaking at Cannabis Europa London 2022 earlier this week, Mr Stifel said: “I think there’s a real issue in the sense that most existing cannabis investors have lost a lot of money in the current market.
“And so when you come out here, and guys want to raise huge valuations, it’s a little bit of a turn off. And I think it’s going to be very hard to attract American investors, given the dynamics of how cheap America is.”
