Midway through August, we took a look at INMED PHARMACEUTIC COM NPV (OTCMKTS:IMLFF) as part of this piece. At the time, the company had just reported data from some animal model studies of its lead development compound, a drug called INM-750, which had been set up to investigate the potential efficacy of the asset in a target indication of myofascial temporomandibular disorders (a chronic pain in the sensitive parts of muscles).
The data derived from rat models of the disease and, as per the journal publication that recorded the numbers, the drug seemed to have a significant impact on both progression and severity of the disease in the animals in question.
We highlighted this program, and specifically the near-term potential for it to advance from animal models to human clinical trials, as a short term value catalyst. In the same piece, however, we also noted that the company had a second arm of its operations, one that represented a return value and potential, at the same time, one that could mean far more from a value perspective if it comes to fruition.
For those that missed the coverage, it’s available here.
For anybody new to this company, INMED is a development stage biotechnology company that’s trying to bring a host of assets and proprietary technologies to market, all of which are rooted in cannabis. The proprietary technology that underpins the above mentioned long term potential is a cannabis biosynthesis platform that, if successful, could revolutionize the way the cannabis plant is used in the medical space.
Most people have heard of THC and CBD. These are two of the most widely used active compounds derived from the cannabis plant. More than 100 of active compounds in the pond, however, many of which likely hold as yet undetermined medicinal properties in the in the same way as does THC. With the currently available isolation technology, however, whether active compounds are pretty much impossible to get from the plant and, in the small number of instances where there accessible, they are very inconsistent in terms of construction and, by proxy, application.
Consistency across an active compound class is key to the success of any development program in the healthcare space, meaning, right now, these potentially game changing compounds are not viable options.
INMED is trying to change this with its proprietary platform.
The company as taken and already well-established isolation method, namely that which is used to produce insulin using E. coli cells, and is applying this to the isolation of active cannabis compounds. Before it was discovered that you could produce consistent human insulin using E. coli cells, production was limited to extracting insulin from the pancreas of pigs. This dramatically limited the available supply and, in turn, the availability of treatment to diabetics.
When production changed to the E. coli method, physicians and patients all of a sudden had access to essentially unlimited amounts of insulin, which revolutionized the diabetes treatment space practically overnight.
This company is trying to do that with cannabis compounds and the latest news, which is serving to inject some upside momentum into its market capitalization, outlines the submission of a provisional patent application that, if successful, will serve to protect the technology for Inmed going forward.
So what’s next?
We would like to see advance on two fronts. First, we want to see the animal models translate into human trials in the pain management indication. Second, we want to see some positive news related to the ommercial application of the biosynthesis technology and, in turn, for the patent application to move smoothly towards resolution.
Cash on hand was around $2 million at the end of March, meaning there is a reasonable degree of dilution risk associated with an allocation at current prices. With that said, however, recent action suggests that there is plenty of buy volume waiting to pull the trigger on any operational advance, meaning dilution is a risk factor but it is far from prohibitive to exposure.
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Image courtesy of Don Goofy via Flickr
Disclosure: We have no position in IMLFF and have not been compensated for this article.