As many of you know, Jazz Pharmaceuticals plc (NASDAQ: JAZZ) agreed in early February to acquire GW Pharmaceuticals plc (NASDAQ: GWPH) for a total price tag, including cash and shares, of $7.2 billion. GW Pharma is a pioneer in cannabinoid-based medicine, and its cannabidiol (CBD) formulation Epidiolex® is notably the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA). As research into the potential benefits of cannabinoids, and especially CBD, has gained momentum over the past several years, this deal could be an early indication of the acceptance of cannabis-based medicines in the world of big pharma. The question is, are there other companies out there with CBD clinical trial programs that could be of interest?

Cardiol Therapeutics Inc. (TSX: CRDL) (OTCQX: CRTPF) is a clinical-stage biotech focused on treating problematic heart conditions with anti-inflammatory therapies. Cardiol’s lead programs focus on CardiolRx™, its proprietary pharmaceutical CBD formulation, and CBD’s documented anti-inflammatory effect. The company recently wrapped up its Phase I trial and is pursuing two more advanced clinical trials. The first, a Phase II/III trial investigating the efficacy of CardiolRx in improving outcomes for COVID-19 patients with a prior history of, or risk factors for, cardiovascular disease, has been approved by the FDA. The second is a proposed Phase II trial investigating CardiolRx as a treatment for acute myocarditis. Cardiol is awaiting final data analysis of the Phase I trial before submitting its application.

Cardiol Pipeline

Source: Cardiol Therapeutics website

CBD as a Pharmaceutical Drug

You can find CBD products in almost any kind of retail setting these days, from health food outlets to grocers to convenience stores. These products are largely unregulated and generally not backed by rigorous scientific study. They may also contain unwanted ingredients, or inconsistent dosages, or their source may be difficult to ascertain.

The world of pharmaceuticals is very different, with controlled studies and pure active ingredients and consistent dosages and proven efficacy all necessary for approval. In this world, it is common for smaller companies to develop and investigate drug candidates before selling to more established companies with the infrastructure necessary to commercialize approved drugs on a large scale. Now that the shroud of prohibition is being lifted from scientific studies of cannabis, it is likely there will be an increasing number of cannabinoid-based drug candidates and companies.

It’s not an easy row to hoe. GW started its Phase I trial for Epidiolex in April 2015, and the drug was approved in June 2018. Since then, there have been no other CBD-based drugs approved by the FDA. But if a company can navigate all the potential problems involved, including sourcing, purity, and consistency issues inherent in an only-recently-legal drug candidate, then the payoff could be huge. Epidiolex has been approved for the treatment of two rare forms of childhood epilepsy that affect less than 30,000 patients in the US and was the centerpiece of the $7.2 billion transaction.

Part of the secret of GW’s success in developing Epidiolex was its designation as an Orphan Drug. To be eligible for the program, a drug candidate needs to address a disease that affects less than 200,000 people in the US. Europe has a similar program, and they are both designed to aid and encourage development of therapies for rare diseases. This could be the most realistic path for further CBD approvals, and is the one that Cardiol Therapeutics is following for its acute myocarditis program.

Cardiol’s Strategy

With years of experience researching and developing therapies for inflammatory cardiovascular disease under its belt, Cardiol noted the documented anti-inflammatory properties of CBD. The company got to work researching the potential for CBD to treat acute myocarditis, a condition affecting about 70,000 people in the US annually (qualifying as an Orphan Disease) and the leading cause of sudden cardiac death in younger people. In March 2020, Cardiol submitted its findings to the American College of Cardiology’s 69th Annual Scientific Session and Expo, with data showing CardiolRx reduces fibrosis, hypertrophy (enlargement), and BNP (a marker indicating cardiac injury) in heart tissue. The company organized an independent Clinical Steering Committee consisting of esteemed cardiology experts to oversee its clinical programs.

In May, Cardiol filed a US provisional patent application covering the use of CBD to improve outcomes in COVID-19 patients once it became clear there was a connection between cardiovascular disease and severe COVID cases. Developing a trial to test the treatment was added to Cardiol’s agenda, and here we are with an approved Phase II/III COVID trial and an anticipated Phase II acute myocarditis trial.

Both programs utilize Cardiol’s pharmaceutical CBD formulation, CardiolRx™, that removes much of the guesswork and inconsistency surrounding cannabis-based drug development. The ultra-pure CardiolRx is produced in cGMP certified and FDA approved facilities. It is THC-free (less than 10 ppm), guaranteeing there are no psychoactive side effects. The product is entirely consistent, delivering the same dosage every time. Supply is also scalable, and not dependent on the vagaries of agricultural production. These characteristics are essential to pharmaceutical drug development. Cardiol has even introduced a consumer-oriented version of the product, Cortalex™, to the Canadian medical cannabis market through a partnership with Shoppers Drug Mart.

Cardiol Therapeutics is traveling down the CBD-as-pharmaceutical path pioneered by GW Pharma. Of course, it is early. The trials need to be conducted and the drug proven effective. It looks promising, but a lot can happen on the way to market. Still, it’s hard to ignore the potential. Acute myocarditis represents an addressable market a little more than twice the size of the market for Epidiolex. While the market for COVID/cardiovascular treatment is not nearly so defined it could be significant, and this trial has the potential to push Cardiol’s whole research program forward more quickly than previously thought.

As CEO David Elsley put it, “Receiving approval from the FDA for our IND application to initiate a clinical program in COVID-19 patients represents a major milestone for Cardiol Therapeutics and provides the opportunity to significantly accelerate the commercial development of CardiolRx. The COVID-19 pandemic is providing our Company with a unique opportunity to rapidly study the cardioprotective properties of CardiolRx in patients who have a prior history of, or risk factors for, cardiovascular disease and are most vulnerable to the virus. Subject to study outcomes, our discussions with the FDA indicated that the design and scope of our Phase II/III trial may be used as a registration study in support of a New Drug Application.”

Cardiol is certainly a drug development company worthy of investor attention as big pharma scans the market for the next CBD opportunity.