In this edition of "Rising High," The Fly conducted an exclusive interview with Eyal Barad, chief executive officer at Cannabics Pharmaceuticals (CNBX), a company focused on the development of cancer-related cannabinoid-based medicines. Here are some highlights:
ANTI-TUMOR CANNABINOID MEDICINES: Cannabics, a U.S. public company with research and development based in Israel, has been conducting research on the anti-tumor effects of cannabinoid formulations on cancer since its founding in 2012. The company’s product pipeline includes the EVALUATE CANNABICS CDx drug sensitivity test, the ALLEVIATE CANNABICS SR drug candidate and the ERADICATE CANNABICS RCC-33 drug candidate. “Historically the first thing we did was back a few a years ago,” the CEO said. “We had a product called our CANNABICS SR, a slow release capsule which was formulated and then clinically tested.” He said the company conducted a clinical trial of the drug in Israel for cancer-related cachexia-anorexia syndrome for patients that were losing weight and their appetite. “We actually took that into the hospital and had a clinical study,” Barad said. “We were able to help patients increase weight and improve their appetite, so that was the beginning.” He said the company is currently questioning whether to take the product into further clinical studies. “The only issue there is that the product contains THC,” the CEO said. “Our other anti-tumor drug candidates do not have THC, so it’s making it easier on the regulatory path for us to focus on those.” Cannabics plans to pursue the candidate further once there is additional regulatory clarity in the U.S., he said.
Following CANNABICS SR, the company developed its CANNABICS CDx diagnostic test, Barad said, made for matching specific medical-cannabis products to specific patients. “That’s around personalization of various cannabinoids and specific cancers,” he said. “The idea there was to be able to take biopsies from patients and test the various cannabinoid products available in their market. Then we’re able to give patients a graph which actually shows them which products were most effective or less effective for the treatment.” Through that, Cannabics developed out its state-of-the-art in-house laboratory, the CEO said, which is a drug discovery and high throughput screening facility. “We’re able to test thousands of different combinations of various cannabinoids on various cancer cell lines and biopsies,” he said. Barad also noted that the diagnostics product is currently patent pending in the U.S. and has been granted a patent in Europe. Cannabics has also received notification from the Mexican Patent and Trademark Office that it has granted a notice of allowance. “We’re waiting for a couple things with the U.S.,” he said. “Once that will come through, we’ll be looking for a strategic partner to collaborate on that for Europe and the U.S.”
Out of all the company’s previous work, Cannabics came out with its first formulation, the CEO said, an anti-tumor drug candidate called RCC-33 for colorectal cancer. “Besides the studies that we did in our lab, we also did two animal studies,” he said. “To summarize, the size of the tumor was lowered by 32% and then survivability in the labs was lengthened by about 35% as opposed to the control.” Barad said the majority of Cannabics’ attention is on RCC-33 and the company plans to develop additional drugs in other indications. “Being a relatively small company with limited resources we have to place our focus somewhere,” he said. “We’ve made a couple announcements. One talking around melanoma where we’ve seen some really good results in our preclinical studies and we’ve also talked about prostate and breast cancer due to the results on them. We’ll be bringing out a path for those.”
COMPETITIVE EDGE: When asked about rising competition in the cannabinoid pharmaceutical space, Barad said Cannabics has a first-mover advantage as no companies out there are specifically looking at the indications that the company covers. “On the cannabis side, most of the companies that are actually going the pharma route are looking at completely different indications,” he said. “Most are not focused on cancer, while we are uniquely focused on cancer.” The CEO also noted that despite being a U.S. company, Cannabics has an 100% owned subsidiary in Israel that was licensed by the Ministry of Health to conduct research with cannabinoids. “As a U.S. company, we would not have been able to conduct the research that we did,” he said. “Israel is very well-known for its advancement in science and people that are very well-educated and very innovative. Israel was obviously a very big advantage for us in that sense.” Barad also pointed to the company’s build out of a state-of-the-art high throughput screening and drug discovery facility that Cannabics owns. “It’s in-house so we’re not relying on anybody else for those preclinical results,” he said. “It enables us to do a lot more detailed work than most.”
CORONAVIRUS: The coronavirus pandemic has impacted many companies globally in the cannabis space, however the CEO said Cannabics saw little to no impact from the outbreak. “Besides the fact that we have had less ability to travel and go to trade shows,” he said. “We’ve put less into our travel and those efforts and more focus on our clinical path and our clinical studies. It may have actually had a beneficial effect, which has been to be able push forward with our studies a lot quicker.” Barad added Cannabics doesn’t expect coronavirus to have a further impact on its work. “We know some of the work that we’re doing for the indication for cancer, that market is supposed to double in the next years so there’s huge market potential,” he said. “We don’t see it really affecting us in any such way.”
LEGALIZATION: When asked about the potential federal legalization of cannabis under the Biden-Harris administration, Barad said Cannabics has been waiting forever and previously thought prior administrations might legalize. “When you look at the Biden administration, it’s supposed to be more favorable and we see that more and more states are enacting changes,” he said. “However, the federal government is falling behind. There’s no doubt.” The CEO said he believes America is missing the boat as Canada, Israel and other countries have benefitted from regulation. “They have gained tremendously from having lenient regulations around cannabis or at least trying to put in place on a federal level a regulatory pathway so that people can medically go on cannabis for various indications,” he said. “It also allows research to be done to further that cause.” Barad said he believes U.S. legalization is not a matter of if it happens, but when it’s going to happen. “The train has left the station,” he said. “I’m sure that when it does happen, it will have a huge effect on the industry in general. It will open up many, many different opportunities that right now are not available.”
The CEO added he expects funding and research in the space will increase following legalization. “I think a lot more money will be put into pharma research,” he said. “Today many of the companies that even identify on the medical side are mostly focused on recreational. It’s a boom worldwide. I would expect more and more of those companies to pump some of those profits or some of those revenues into real research, which is what we’re doing.” Barad noted the space looks very similar to the dotcom era and different cycles of booms and busts. “At the end of the day, the ones that survive are the ones with the technology and the IP,” he said. “The valuations versus the low valuations as a company such as ours will shift as potential shifts away from the recreational and more into the medical, science, IP and data.”
DELIVERY METHODS: As technology advances and delivery systems for cannabinoids become more diverse, the CEO said Cannabics is looking at all various methods of administration. “Whether it will be a capsule, tablet, syrup, a suppository or even maybe at some point by injection, there’s advantages to each,” he said, noting regulation will take a lot longer for injections. Barad added that Epidiolex, the only cannabinoid-based drug that has been approved by the FDA, is a syrup. “That’s the only route that the FDA has currently approved so we’re looking at a very much similar way, down the path of least resistance to see if we can do that orally,” he said. “They had the consistency there and were able to get enough of the active pharmaceutical into the bloodstream.” However, delivery is a secondary issue to the lack of research around cannabis, the CEO said. “I don’t think there’s enough studies going on into what compounds of the cannabis plant actually do and how do they do it,” he said. “Once we know what the efficacy is, then we will have more time and effort to try and focus on what’s the most effective way of administering cannabinoids.”
CHALLENGES: When asked about the largest hurdles facing the industry, Barad pointed to the scarcity of funding going into actual science-based research. “In the pharmaceutical industry, lack of funding and lack of research leads to lack of demand for various products,” he said. “And then there’s shortage of product or no GMP product available on the market.” The CEO said the space is in its infancy and will have to mature, but there are also many opportunities still available. “The industry has to grow up from one that started looking at how many tons or kilos were produced and then at a later stage looking at a brand and how much premium they could get on every ton or gram,” he said. “The industry will mature and look at the science, the IP and real value of the technology of a company. That’s where the next wave will come.”
OPPORTUNITIES: As the cannabis space develops, the CEO said Cannabics remains excited about the anti-tumor effects of cannabinoids and their beneficial impacts. “We’re a small company focused on a very big task,” he said. “We put our hat on to tackle cancer. Being the underdog here in a way, the small company trying to do that, we’re very excited and the results that we’re seeing are very, very promising.”
OTHER CANNABIS/PSYCHEDELIC STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Aurora Cannabis (ACB), Ayr Wellness (AYRWF), Body and Mind (BMMJ), CanaFarma (CNFHF), Canopy Growth (CGC), RIV Capital (CNPOF), Clever Leaves (CLVR), Columbia Care (CCHWF), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), CV Sciences (CVSI), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Delta 9 (DLTNF), Emerald Health (EMHTF), Fire & Flower (FFLWF), FluroTech (FLURF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Skye Bioscience (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Goodness Growth (GDNSF), WeedMD (WDDMF) Zynerba (ZYNE) and 4Front Ventures (FFNTF).