Medical life science company, Medlab (ASX:MDC), has signed a cannabis supply agreement with Canadian licensed producer of medical marijuana, Aphria.
Cannabis plant species, yields and a novel extraction process have been established in collaboration between Medlab and Aphria, allowing Aphria to produce for Medlab in a large scale supply.
The combination of the two most known cannabis extracts required by Medlab, CBD (cannabidiol) and THC (tetrahydrocannabinol), produce in excess of 70 per cent active ingredient for both compounds.
Aphria will grow and prepare the high yield cannabis for Medlab in Canada. Medlab will complete the manufacturing at a licensed Schedule 8 (S8) TGA approved facility, which the company expects will be in Australia.
At this facility, the cannabis product will be combined with Medlab’s patented medicine delivery system, NanoCelle, which enables sub-micron sized particles to be taken by mouth spray, allowing a swifter and more direct absorption of medicine into the bloodstream.
Medlab’s forthcoming human trial, for management of intractable pain with oncology patients, will apply cannabis whole plant extract of both CBD and THC in a 1:1 ratio with NanoCelle, making it the first trial of its kind globally.
Medlab has exclusivity over the cannabis product it has developed with Aphria and the agreement also marks the beginning of Aphria’s entry into export markets and pharmaceutical development with the use of its product in human trials.
“The supply agreement with Medlab represents the first step in Aphria's International strategy. Choosing to take that step with an Australian public company, operating in the pharmaceutical space, with the resources to execute and a strategic vision consistent with Aphria's made Medlab a logical choice as Aphria's first international partner”, said CEO Vic Neufeld.
In anticipation of executing this agreement and the associated future demand, Aphria said it has already commenced its Part II expansion project and increased its oil extraction capacity necessary to support the project.
According to Mr Neufeld, the opportunity to create a product specifically for a human trial was a significant advancement in the use of medical cannabis.
“Aphria's focus and keen attention to pharmaceutical protocols, embedded in all areas from seed to sale, has enabled Aphria to partner with an industry leader such as Medlab based in Australia. We continue to deliver to our shareholders our vision to take the Aphria story, together with Health Canada's regulatory advancements, to regulated countries that are moving toward medical cannabis as an alternate treatment for patients in need.”
Mr Sean Hall, Managing Director of Medlab, said Aphria’s expertise and track record in producing high yield cannabis extracts of CBD and THC oil along with Medlab’s patented Nanocelle delivery platform will allow the production of a precise, potent cannabis medicine in preparation for a human trial.
“Our agreement with Aphria establishes a sustainable supply of consistent and active ingredients, which is important because precision and accuracy of the active ingredients are of primary concern as we are working to build a true pain management medicine.”
Medlab recently completed a successful capital raising for $5.3 million to contribute to pursuing each of these business directions.
Aphria recently completed a capital raising of $34.5 million (CDN) to pursue additional expansion, a portion of which will contribute to the demand associated with this agreement.