Times are strange. This past week we saw the first cannabis related IPO in the United States with a company that buys property from people who grow a “regulated” Schedule 1 drug and then leases it back to them, an investment vehicle knows as a REIT. Thankfully people used common sense when the IPO debuted and didn’t send the stock into the stratosphere as we’ve seen with the Canadian grower stocks lately. While this IPO was the first cannabis related stock to trade on a major exchange, medical marijuana stocks in the pharma industry have been around for a while.
There is a taboo associated with marijuana so we don’t see marijuana stocks covered enough by investment media. Let’s be frank. The type of people who would be attracted to stocks like this need some serious guidance. It’s not just the amateurs that are interested though. We’ve seen Peter Thiel step in to invest in recreational and medical marijuana spending 18 months researching the space which is as much time as he spent researching SpaceX. Now that Mr. Thiel is on Trump’s transition team, that bodes well for the potential growth of a market that “is worth $50 billion in the United States and four times that worldwide“.
When we talk about “medical marijuana” we need to make one thing clear. We are looking at companies that are looking to use marijuana for legitimate medical uses. The majority of our readers are from the U.S. so they should already be aware that the whole “medical use” thing is kind of a big joke. Pretty much anyone can just get a medical marijuana card by simply asking for one. What we’re discussing here are publicly traded stocks that are actively working on bringing drugs to the market that use cannabinoid molecules.
Cannabinoids are a class of compounds derived from cannabis plants. We’re also screening out all of the over-the-counter (OTC) garbage to bring you legitimate pharmaceutical stocks that trade on a major U.S. exchange. Without further ado, here are 5 pharmaceutical companies working on making legal drugs from a plant that is illegal to grow or possess in most U.S. states.
|Company||Ticker||Market Cap||1-Year Return|
|GW Pharmaceuticals PLC- ADR||(NASDAQ:GWPH)||2720||+32%|
|Insys Therapeutics Inc||(NASDAQ:INSY)||746||-64%|
|Cara Therapeutics Inc||(NASDAQ:CARA)||258||-44%|
|Zynerba Pharmaceuticals Inc||(NASDAQ:ZYNE)||138||2%|
British company GW Pharmaceuticals (NASDAQ:GWPH) is the largest pure-play marijuana-based pharmaceutical company working on medical marijuana compounds having been researching cannabinoids since 1998. Here’s a look at their pipeline:
Their only approved drug, Sativex, is the world’s first plant-derived cannabinoid prescription drug which is approved for the treatment of spasticity due to multiple sclerosis in 29 countries outside the United States. Their lead drug candidate, Epidiolex, is rapidly moving towards approval having shown an over 50% reduction in seizures for patients with epilepsy.
Our second biggest pure-play medical marijuana stock, Insys Therapeutics (NASDAQ:INSY), has been in the game as far back as 2011 when they released a generic equivalent to Marinol. If you don’t know what Marinol is, it’s pretty much pill form marijuana that they give to cancer patients for pain and to increase appetite. Produced by the $93 billion pharma company ABBV, Marinol has been around since 1985 and it’s not uncommon to find it for sale on the black market.
Insys currently markets two products, Subsys®, which is sublingual Fentanyl spray for breakthrough cancer pain, and the aforementioned generic version of Dronabinol (THC) capsules. In addition to these two products, Insys has the following current pipeline of compounds at various stages of the regulatory approval process:
The dronabinol oral solution above is being marketed under the brand name Syndros, and is the first and only FDA approved dronabinol solution for oral use. Syndros will compete directly with ABBV and Insys hopes this will be their first blockbuster medical marijuana drug.
Cara Therapeutics (NASDAQ:CARA) completed an IPO in 2014 to raise $56 million and conducted a follow-on offering in 2015 to raise an additional $75 million. Cara’s most advanced compound, CR845, is currently undergoing clinical testing for acute pain and pruritus:
The play on cannabinoids is their compound CR701 which is a peripherally acting cannabinoid receptor agonist which will be used for chronic pain as an alternative to opioids which have a significant potential for abuse.
Zynerba Pharmaceuticals (NASDAQ:ZYNE) is working on next-generation synthetic cannabinoid therapeutics that can be applied through the skin in the form of a patch or a gel to treat epilepsy, Fragile X syndrome, osteoarthritis, and fibromyalgia. The Company has two lead candidates seen below:
A Phase 1 clinical trial for ZYN001 is planned to begin in the first half of 2017. In February 2016, the FDA granted orphan-drug designation of ZYN002 for the treatment of patients with Fragile X syndrome in the US. Phase 2 clinical trials in patients with Fragile X syndrome are set to begin in the second half of 2016.
Founded in 2004, Israeli startup Therapix Biosciences has only been working on the development of cannabinoid molecules since August 2015. Therapix expects that the prior FDA approval of dronabinol will allow them to go to market quicker. The Company has two programs they are working on; Joint Pharma and BrainBright Pharma. The Joint Pharma program is a treatment for Tourette Syndrome and is currently preparing for Phase II clinical trials starting in Q4 2016. The BrainBright Pharma program of Therapix is targeted to the high value and underserved CNS market of mild cognitive impairment (MCI) using ultra low-dose THC. Therapix filed for an IPO last month and plans to trade on NASDAQ under the ticker TRPX.
There you have 5 stocks that are working on creating compounds from marijuana in order to create medical marijuana drugs that can create new opportunities and displace current treatments. Want to buy all of these stocks without having to pay your broker for each trade? Just do what we did and open an account with motif investing. You can buy a portfolio of all 5 of these stocks for just $9.95 (we’ll add Therapix when they IPO):
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