On October 26, 2017, we highlighted INMED PHARMACEUTIC COM NPV (OTCMKTS:IMLFF) as being a turnaround stock in the biotechnology space.
At the time, the company was trading in and around $0.30 a share having spent the two or three weeks prior to our coverage declining and we said that – at its then-current price – shares looked cheap ahead of a potential long-term recovery.
Fast forward to today, November 13, and it looks as though we were right on the money.
At market open this morning, the company will kick off the session at $0.55 a share – a close to 85% run on the price at which we highlighted the stock.
So what’s next?
In short, we expect big things from this company and, in line with that, further appreciation in value going forward. Of course, we have to back this up with something, so why do we think there’s value in an Inmed exposure right now?
For anybody new to this one, Inmed is a biotechnology stock that operates in the field of medicinal cannabis. The company is trying to isolate various cannabinoids found in the cannabis plant (outside of the usual and most common THC and CBD) and, having achieved isolation, is then trying to apply these lesser-known cannabinoids to various ailments and diseases.
Recently, we learned that Inmed had been able to formulate a potential treatment for glaucoma and had successfully applied this treatment in a preclinical environment. That’s great news and it represents a degree of operational advance in this nascent sector but it’s not what we are most interested in at the moment – at least not primarily.
What we are interested in is a proprietary platform developed by the company that allows it to achieve the above-stated goal – to isolate and render usable the 90 or so cannabinoids that currently aren’t being used in the medical field but that could have profound implications for a whole spate of different types of diseases.
The reason that these cannabinoids are as yet untested is that they occur in natural cannabis plants at such a low volume that it is impractical to try to use them to develop a treatment that would require their presence at a mass production scale.
Inmed’s platform is based on the same concept that’s used to create synthetic insulin. Half a century ago, all insulin was derived from the pancreas of a pig. This drastically limited the supply and – in turn – the effectiveness of insulin as a diabetes treatment. Then, Eli Lilly and Co (NYSE:LLY) figured out that you could use E coli to produce insulin (synthetic insulin, that is) at scale, negating the necessity for pig pancreas derivation.
This method is still used today.
What Inmed has done is take this concept and apply it to the cannabinoids that as things stand aren’t available in natural levels to the degree that would be required for large-scale use. The synthetic creation of these cannabinoids using E coli has opened up the potential to target previously unmarketable diseases with these potential game-changing newly-accessible cannabinoids.
Even more exciting is that the company just announced that it has picked up Ben Paterson for the development of this program. Paterson was previously a Senior Engineering Advisor with Eli, where he spent 37 years, including 24 years in their biosynthesis division – the division that basically started the whole synthetic insulin production program.
So what’s next?
We’re looking now to any developments in the synthesis program and – specifically – evidence of the company’s ability to synthesize a particular (previously unusable) cannabinoid to a scale required for human clinical trials. There’s a good chance that the above-mentioned glaucoma indication will be first in line, so we’re watching that space in particular right now.
As ever at this end of the space, cash isn’t great right now and that’s an immediate near-term risk for the stock. Dilution aside, however, there’s plenty to like here.
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Image courtesy of NIAID via Flickr
Disclosure: We have no position in IMLFF and have not been compensated for this article.