Vitality Biopharma Inc (OTCMKTS:VBIO) Is A Top Cannabis Biotech Stock

Vitality Biopharma Inc (OTCMKTS:VBIO) gained nearly 200% during the last couple of weeks, reaching highs just ahead of $4 a share at its December 27 peak. It's since taken a 30% hit, however, leading some to suggest the gains are artificial. There's been a reasonably large promotion on the company's stock as late, and this has no doubt added to speculative volume. However, we think that a large portion of the increased interest derives from some key developments, and the company's underlying potential.Here's what we're thinking.As a bit of preliminary background, this company used to be know as Stevia First, trading under the STVF ticker. Readers may already be familiar with that one. It had developed a technology that could alter stevia to make it taste better. Stevia's bitterness has long been a major hurdle in getting it in place as a widespread sugar substitute, and STVF believed it had found the answer. More recently, however, the company realized it could apply a similar technology to cannabinoids, and develop treatments in a range of target indications by way of pharmaceutical cannabis application. Management decided there was more return to be had on the latter application, and Stevia pivoted into Vitality.Now, and as a subsidiary program to some of its other target indications, which include inflammatory bowel disease, epilepsy and MS, it's trying to develop a treatment for what's called narcotic bowel syndrome (NBS). NBS is a condition that comes about as a result of a patients continued use of opioid based narcotics, either through prescription or non prescription (recreational abuse) pathways. Opioid abuse has long been associated with gastrointestinal problems, and with the huge wave of both dependence and abuse that now sits at epidemic levels in the US, there's a concurrently large need for therapies that can treat the pain associated with the opioid induced GI issues. Obviously, opioid based pain management isn’t an option, as this would exacerbate the condition, so alternatives need to be found and brought to market.This is exactly what Vitality is trying to do.The company hasn’t put out much information on how its treatment works, but we know that it makes use of what are called cannabosides. These are a class of cannabinoid prodrug that have been demonstrated lead to dramatic improvements in drug solubility and stability. Increased solubility and stability translates to the potential use in GI based drugs (which have, in the past, encountered breakdown problems associated with GI pass), and therein lies the core of Vitality's program.Data from third party studies demonstrated that this sort of drug can dramatically improve patient pain, and Vitality is touting a study in inflammatory bowel disease, where 84% of patients reported an improvement in abdominal pain on the back of cannabinoid treatment, as a springboard for its own applications.The company also just got a facility approved in the US for the development of cannabinoid prodrug pharmaceuticals. This is a big step towards getting a drug to market. While recreational marijuana is now legal in California (where the facility is based), the pharmaceutical side of the space is still very tightly regulated. We've been on the lookout for some sign that Vitality is pushing forward with its development program, as opposed to just putting out releases claiming advances, and for us, this does the job. To get the DEA and the FDA to approve a facility for pharmaceutical development using Schedule I controlled substances is no mean feat in California, and that management has managed to do it is a sign that there's some real momentum building under the hood.There's a risk side of the equation, of course. Vitality needs cash badly, and it's going to have to dilute shareholders to get this cash (in all likelihood). Liabilities aren’t great, and obviously there are no revenues coming in right now.That said, we've seen how markets respond to company developments, and as it continues to push forward with its pipeline, we expect more and more of this response to materialize. At its current corrective-priced entry, it looks like a nice discount exposure.We will be updating our subscribers as soon as we know more. For the latest updates on VBIO, sign up below!Disclosure: We have no position in VBIO and have not been compensated for this article.