Last month, I looked at the clinical trials of Canadian cannabis producer Aurora Cannabis Inc. (ACB) and was surprised by the extent of the company's programs evaluating cannabis for various diseases. In this article, Canopy Growth Corporation (CGC) has the importance of medical cannabis and is available in terms of the clinical trials it is running on cannabis.
The medical cannabis space in Canada
In 2018, ArcView Group and BDS Analytics were predicting that legal cannabis would bring in revenues of $ 1.3 billion, with $ 600 million of that coming from medical cannabis. However, while those analysts saw 2022 revenues from legal cannabis growing to $ 5.4 billion, it was expected that only $ 500 million would come from medical cannabis. The idea behind the projected drop in medical cannabis revenues is that legalization of recreational cannabis would see forms that users can access cannabis by the simpler recreational route. Cannabis reached a plateau in 201
Figure 1: Household consumption expenditure on medical cannabis by quarter since 2013. Source: Statistics Canada.
Despite the 2018 plateau, not agree with the idea that revenues from medical cannabis will be lowered in 2022. Certainly, medical cannabis often has the lowest price per gram (or equivalent when discussing extracts like oils). That is, as the price of recreational cannabis falls, as has happened post-legalization in some US states, the benefit shrinks. The benefit returns, however, if healthcare insurers offer coverage for medical cannabis, something both Sun Life and Markers Financial began doing in 2018. Further, acceptance of medical cannabis, including willingness to prescribe, has had a tendency to increase over time.  Figure 2: Changes in prescribing trends based on a 2014 and 2016 survey, each of 200 randomly selected practicing physicians from Canada. Source: CanniMed Therapeutics prospectus
Feeding into that willingness to prescribe likely results from clinical trials being run by companies like ACB and CGC. Presuming at least some of these trials succeed, which would give physicians information about what type of cannabis product to use. A 2015 survey of Canadian physicians (Table 1) found the largest gaps between physicians' current knowledge and their desired knowledge of medical cannabis came in the area of "Dosing and creating effective treatment plans for patients using medical cannabis." The clinical trials of cannabis have been used as defined doses and a defined duration of treatment rather than just patients, "Try some cannabis, see if that works." As such, results from these trials are going to provide physicians answers to their questions about dosing and treatment plans.  Table 1: Results from a 2015 survey of 426 Canadian physicians regarding current and desired knowledge of medical cannabis. Source: Ziemianski et al., BMC Med Educ, 2015, 15:52
While the results of this study are already a few years old, unfortunately, a number of the clinical trials I believe will inform medical cannabis use in conditions like pain, epilepsy and Tourette's syndrome only commenced in 2018 or even early 2019. Basically , the gap in physicians' knowledge about dosing and treatment plans has probably not been filled, despite the fact that it was identified years ago. The delay might be because the Canadian cannabis producers that have sponsored these clinical trials only came across the funds necessary to do so in 2018 with the rise of the sector and the subsequent ability to raise capital. The Cannabis Act itself has also been identified as a major factor stimulating research, including clinical research, on cannabis.
Outside of trials commissioned by Canadian cannabis producers, evidence of the efficacy of cannabinoids in conditions like epilepsy has probably only grown because of companies like GW Pharmaceuticals (GWPH). GWPH's trials on epidiolex (cannabidiol, or CBD) have confirmed the efficacy of CBD in the most recent disorders Lennox-Gastaut syndrome and Dravet syndrome. Epidiolex is not available in Canada, however, while medical cannabis is, it will probably be nice to see data from studies of medical cannabis in epilepsy to better inform treatment of Canadian patients. trials?
CGC might be preparing for continued success with medical cannabis, but I find the level of detail provided to investors on how the company intends to do this. This is despite the CEO Bruce Linton acknowledging the value of medical cannabis in justifying the company's valuation.
If we figure out in Canada how to help people who want to sleep or how to help old people feel better and move around, if we become the first company that does C $ 1 trillion in revenue in the cannabis space, I really don't think the valuation has run away from itself.
– CGC CEO Bruce Linton in an interview with Bloomberg
A lot of CGC's clinical work will be done by Canopy Health Innovations (CHI) or Canopy Animal Health (CAH). CGC completed the acquisition of CHI and its subsidiary CAH's operations in August 2018.  Figure 3: Upper panel, CGC notes it is involved, through CHI and its partnerships, in 15 human and 4 animal clinical trials. Lower panel, screenshot from ACB's corporate presentation noting 40 clinical studies; However, this number includes case studies (a trial in a single patient). Source: CGC corporate presentation and ACB corporate presentation
While CGC notes 15 human and 4 animal trials are planned or underway, compared to ACB's 40 clinical studies, we cannot use this alone to suggest ACB is ahead when it comes to clinical trials. Fifteen human studies would actually be plenty for CGC to investigate a variety of conditions where it looks like cannabis (of varying compositions) has potential, such as pain, anxiety, sleep and post-traumatic stress disorder. Indeed, the company's corporate presentation identifies these indications, as well as animal health, as potential target markets for its products. It looks like CGC has only started a handful of studies, unfortunately. We can still review them, nonetheless.
The Phase IIb insomnia trial
The first trial of interest from CHI is a double-blind, randomized, placebo-controlled study of CHI-921 (which contains THC and CBD) patients with insomnia. The trial looks to sleep initiation (time taken to go from being awake to light sleep, or sleep onset latency) and maintenance (staying asleep). The entry for the trial on Health Canada's Clinical Trial Database (protocol number H2017-01) provides few to no details however, the trial is listed as pending rather than ongoing, and the estimated enrollment is not provided. Then again, Health Canada's Clinical Trial Database is not intended to be a registry with detailed information about its clinical trials. CGC only received a go-ahead to early clinical research on its clinical trial (s) in the form of a No Objection Letter from Health Canada in June 2018.
In light of the significant potential for cannabis in treating a range of medical conditions, this is the first in a planned series of trials to investigate and quantify the therapeutic effect of cannabis and cannabinoids across a selection of indications with significantly unmet needs, working towards the ultimate goal of patented, insurance-eligible cannabinoid-based medicines.
– CGC press release, June 12, 2018 (emphasis mine)
CGC's comments in June 2018 suggest the company really is just getting underway in terms of running clinical trials on cannabis. By comparison, clinicaltrials.gov lists trials of CanniMed products (ABC previously acquired CanniMed) with start dates of 2015 or 2017 and estimated completion dates of June or December 2019. Even if CGC is not first, what matters more is the success the company has . Success for CGC in its clinical trials could see physicians reaching for its products, which have been tested and proven, rather than just giving patients access to a similar product. With regard to insomnia, there is definitely potential for cannabis, but a review of studies conducted to date notes the evidence is mixed. It appears CBD in low doses is more likely to help with daytime sleepiness (which would actually make it more likely to be useful in narcolepsy), whereas medium to high doses might increase sleep duration or cause somnolence. In the presence of THC, that dose-response relationship might become even more complex. Luckily, CGC's phase 2b study includes dose titration, and so, the company has increased its chances of finding an amount of cannabis (of a given composition) that works for insomnia
Trials for anxiety in certain animals
In August 2018, CGC and CHI announced they received approval from the Veterinary Drug Directorate of Health Canada to research CBD for anxiety in certain animals. In the aforementioned Bloomberg interview, CGC CEO Bruce Linton noted that the share of the canine market could be $ 9 billion per year. The company does not provide much information on these trials in animals, unfortunately, other than to note that it will use a proprietary CBD enriched oil formulation. CGC would really do well to provide investors with more information on these trials, such as when the company expects to produce the potential impact on revenues, it should succeed in its efforts.
Cannabis in athletes with post-concussion neurological diseases  CGC noted in March 2019 that it had entered a partnership with NHL Alumni Association (NHLAA) and NEEKA Health Canada to look at cannabinoids to treat post-concussion neurological diseases in forms NHL players. Specifically, the partners have commissioned a double-blind, placebo-controlled clinical trial of CBD involving 100 forms of hockey players. Eighty of the players will receive pills containing CBD and 20 will receive a placebo, each twice a day for 10 weeks. Endpoints in the study will examine anxiety, depression, pain, use of opioids and other drugs as well as cognitive function. With these many factors being looked at in the study, it would not be surprising if results of the trial find some sort of benefit. Essentially, a lot of darts have been thrown at the board, and the odds of hitting a bull's-eye have thus gone up. The question would then be if any particular benefit could be replicated, but any result from this first trial would give CGC investors something to get excited about in the meantime. The study is expected to take about a year to produce results.
Is there anything else?
CGC speaks of 19 trials and I can only tell you about three. In December 2018 interview with BioTuesdays, CGC's Chief Medical Officer, Dr. Mark Ware, notes that pain, insomnia and mood-related disorders were a priority for the company. Dr. True note that Canopy Health was conducting trials in fibromyalgia and cancer pain. I believe it is probably the company intends to conduct these studies, but if they are underway, why hasn't CGC told us about them? After all, the company issued press releases when the insomnia and animal anxiety trials became a reality. Dr. Ware also referred to Canopy Health's trials in sleep, fibromyalgia and social anxiety disorder, listing all three complete phase 2b in the 2019-2020 time frame. It would be ideal for CGC to find out about these studies before they complete
CGC could be behind competitors like ACB as far as I can tell when it comes to running clinical trials on its medical cannabis products. That would actually be fine, provided the company shares with investors a few details on what it is actually doing. Medical revenues are only part of the picture for CGC, which, in the quarter ending December 31, 2018, produced sector-leading non-revenues or C $ 83 million, including C $ 16.5 million from medical cannabis in Canada and internationally. During the same period, ACB noted C $ 26 million in medical cannabis revenues, not just revenues or $ 54.2 million. CGC may take over ACB in terms of medical revenues long term, but I am unwilling to predict that based on what CGC has shared with investors.
Disclosure: I / we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.