In a watershed moment for medical cannabis advocates in the United States, Swiss giant Novartis’ $NVS Sandoz AG unit has tied up with Canadian medical cannabis producer Tilray, marking the first big endorsement of the controversial plant by a large, multinational pharmaceutical company.
The deal exemplifies changing attitudes in the US, where more Americans live in states that have legalized the sale of medical and/or recreational cannabis than in anti-cannabis jurisdictions. Tilray, which supplies cannabis flower and extract products to patients, physicians, healthcare facilities and researchers in 12 countries, has an existing alliance with Sandoz Canada.
Under the so-called framework agreement, Sandoz AG may support Tilray in commercializing and branding the Nanaimo, British Columbia-based company’s non-smokable/non-combustible products; the Canadian pot producer may supply and/or license such products to and from Sandoz AG; and significantly, the two may collaborate in developing such products.
“The (expanded) partnership also helps legitimize cannabis in international markets, which could impact prevalence within existing markets as well as help influence countries considering medical cannabis legalization,” Cowen’s Vivien Azer wrote in a note.
The landmark FDA approval of GW Pharma’s $GWPH cannabis-derived medicine Epidiolex earlier this year paved the way for a plethora of small and mid-sized drug developers — including Insys Therapeutics $INSY, Zynerba $ZYNE, InMed Pharma, Kannalife and Axim Biotech $AXIM — that are hoping to hitch their wagon to the cannabis star, either by developing synthetic or natural cannabis-derived therapeutics or devising novel delivery mechanisms for its absorption.
Two big deals over the course of this year have also underscored the lucrative potential of the plant, with alcohol giant Constellation Brands $STZ spending a mammoth $4 billion to secure a 38% stake in Canadian cannabis company Canopy Growth $CGC, and cigarette maker Altria $MO forking out $1.8 billion to take a 45% stake in another Canadian pot company Cronos $CRON.
Meanwhile, the US federal government continues to consider cannabis as a schedule 1 substance — on par with LSD and heroin — with no medical value, infuriating researchers who contend the classification has dramatically slowed the scientific and medical investigation of the plant. Nevertheless with House Democrats taking back seats this November, pro-marijuana legislation is expected to heat up.
“There is ample evidence that the cannabis plant has numerous useful applications in medicine and the law is obsolete,” said Marc Feldmann, an Oxford professor and immunologist whose work led to the discovery and subsequent commercialization of the world’s largest selling drug class, anti-TNF. “This classification is changing around the world – it has already happened in Canada and will happen in more states in the US in due course,” he said in a previous interview with Endpoints News. Feldmann also serves as CEO of CannBioRex, a Canada-based company that is developing synthetic cannabis-derived medicines.