3 Prescription Drugs You Didn't Know Come From Marijuana

It's no secret that drug discovery is an arduous process; it often takes pharmaceutical companies more than a decade and over $1 billion to bring a new compound to the market. Because of the complexities in discovering new drug candidates from scratch, many biopharmaceutical companies get a head start by drawing inspiration from nature.

Examples of blockbuster drugs that were discovered from obscure natural sources abound, so it should also come as no surprise that scientists are unlocking the therapeutic benefits of what may be today's most controversial plant: marijuana.

Source: GW Pharmaceuticals.

The best-known marijuana extract is the psychoactive compound tetrahydrocannabinol, or THC, but the plant also contains more than 60 lesser-known compounds that belong to the same chemical family as THC. Fledgling biotech GW Pharmaceuticals (NASDAQ: GWPH  ) is exploring the medicinal potential of some of these chemicals, and some of the world's largest pharma companies, including AbbVie (NYSE: ABBV  ) and Valeant Pharmaceuticals (NYSE: VRX  ) , market products in this drug class. Let's look at three of the most prominent products, and what investors should watch in the field of marijuana research going forward.

Sativex
GW Pharmaceuticals' Sativex is currently used to treat spasticity (muscle spasms and stiffness) caused by multiple sclerosis. It is composed of two compounds found in marijuana: THC and cannabidiol, or CBD, which isn't psychoactive. The drug, delivered through a vaporizer, is approved in 25 countries but isn't available in the U.S. just yet.

GW Pharmaceuticals is collaborating with Otsuka Pharmaceutical on clinical trials that could lead to FDA approval, and the duo is also working on clinical studies that could result in expanded approval for the treatment of cancer pain. Phase 3 trial data from some of these studies will be available toward the end of the year, and these results will be important catalysts for GW Pharma's stock.

Marinol and Cesamet
Unlike Sativex, AbbVie's Marinol is FDA-approved for the treatment of nausea in patients undergoing chemotherapy and is also prescribed to AIDS patients suffering from loss of appetite. The drug is made of a synthetic form of THC and is delivered as an oral capsule. Valeant Pharmaceuticals has a similar compound on the market called Cesamet, which also treats nausea in chemotherapy patients.

Interestingly, marijuana is classified as a Schedule I drug by the DEA because it doesn't have a proven medical application and users may abuse the drug. Marinol and Cesamet, however, are listed as Schedule III and Schedule II drugs, respectively, meaning the FDA recognizes their clinical benefits and their abuse potentials are believed to be lower.

Looking ahead
The science behind these compounds is fascinating, but there are a few things investors need to consider when looking at pharmaceutical products derived from cannabis.

First, while these drugs serve critical medical needs, they have been far from blockbusters. AbbVie and Valeant, which both bring in billions of dollars each year in revenue, don't provide sales for their cannabinoid products, suggesting that they only add incrementally to the companies' top lines. GW Pharmaceuticals, which currently markets only Sativex, also hasn't had great results so far. It reported only $12.4 million in sales last quarter, and the drug will need both an expanded label and FDA approval to meaningfully ramp up sales.

Second, while some scientists continue to explore the potential of cannabinoids to treat a wide variety of diseases, few companies are active in this space today. GW Pharma is an exception, and its drug development platform is focused on compounds derived from marijuana. In addition to Sativex, the company is developing Epidiolex for the treatment of rare diseases, and it has other compounds in early-stage clinical trials for autoimmune diseases, diabetes, and schizophrenia.

While GW boasts a large pipeline for a relatively small drugmaker, its shares have soared over the past 12 months, and the company's market cap tops $1 billion. This climb is largely due to swelling valuations across the biotech sector and high expectations for its pipeline. At this valuation, however, it looks like sales of its late-stage experimental drugs are already priced into the stock. Any stumbles in clinical trials, or, if its drugs gain FDA approval, poor commercial drug launches will certainly cool investor enthusiasm.

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Read/Post Comments (19) | Recommend This Article (54)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 16, 2014, at 7:54 PM, pigpen102572 wrote:

    Why the science about it, legalize it and smoke it and grow it, just that easy.

  • Report this Comment On March 16, 2014, at 8:06 PM, SELLmtg wrote:

    My opinion: Buy CBGI ( a marijuana co. with 17.3 acres of marijuana land (Yahoo.finance, news 3/6) and also owns an online mmj store (news 2/26)).

    CBGI=0.2078 (as of 3/14) and will go up higher.

    Similar stock is CANN=$35.40 per share, CANN has

    only 3 acres and NO mmj store. CBGI will go up as

    high as CANN or higher.

  • Report this Comment On March 16, 2014, at 8:21 PM, BentEars wrote:

    No, pigpen. It is NOT that easy. I've tried to grow weed for 35 years and I've never gotten a plant to get more than 8 inches tall then it turns yellow and dies. Growing weed is more like making a billion dollars or a successful manned flight to the stars. I don't believe weed actually grows. It is a factory-produced material made to look like a plant.

  • Report this Comment On March 16, 2014, at 8:49 PM, stillwater9999 wrote:

    Many companies have tried to develop compounds in this area (cannabinoids). Almost all have failed in clinical trials, because they had no therapeutic benefit.

  • Report this Comment On March 16, 2014, at 9:18 PM, herbwarrior420 wrote:

    marinol is synthethic and has kill a few people already

  • Report this Comment On March 16, 2014, at 11:19 PM, Joesbox wrote:

    Gee, I remember I threw some seeds out my back door for a joke and wham little starters a week later. Six months later they were eight feet high. Who knew! They turned out ok, not great but not bad. Of course that was thirty years ago and weed today is out of this world. sorry you guys are having a problem. The people I know are from the infamous emerald triangle and they never fail, but that's another story.

  • Report this Comment On March 16, 2014, at 11:32 PM, kwieder wrote:

    This writer of this article does not know his subject, has gotten facts wrong, as well stretching others. Motely is the real loser here, as this is nothing but a come-on, using interest in medical marijuana as a 'come-on' for a product pitch; 'Don't let your money go up in smoke' - give me a break!! Last time I'll ever get sucked into reading one of these!

  • Report this Comment On March 17, 2014, at 1:51 AM, djcluvslife wrote:

    I know for a fact that cannabis is most helpful with my PTSD, as well as with diabetic nerve pain in my feet and legs that the drug Norotin (or however it is spelt) did not help me with at all and it caused me more harm then it was worth... I have friends who have it for different medical reasons included phantom pain from amputation, seizures, eye disease, cancer so do not tell me this has no known medical uses as I and a lot of others who use it knows it has and with less side effects to them then the drugs drug companies push... It is all about the greed and money they make off from sick people who get sicker or die taking these drugs that have all these side effects... I believe Cannabis should be legal in the USA and the numbers at the polls prove this to be the case also... The government is suppose to be listening to the people not getting kick backs and pay outs to stop making it legal... I am disgusted with all the crap and lies about pot... In my opinion Cigarette's and Alcohol are more evil and have killed way more people then ever but it is ok for them to be Legal. This is all just political BS I think... I have lost a father and a sister from lung cancer from smoking cigarette's because they got addicted and it is ok to sell because it is legal they are known for killing people but Hey just keep paying off the law makers so it stays that way right... Like I said I think all of this is just pure BS and so does a lot of others. The polls do not lie I wish I could say that for a lot of others but I can not... It really makes me sad that the people of America are not being listened to by their own government... but it is a no longer We the people For the people world...

  • Report this Comment On March 17, 2014, at 6:17 AM, handytrim wrote:

    @stillwater9999 "Many companies have tried to develop compounds in this area (cannabinoids). Almost all have failed in clinical trials, because they had no therapeutic benefit." That is complete rubbish. There are literally thousands of positive studies into the therapeutic benefits of cannabis medicines. You may be confused with studies carried out on the synthetic cannabis medications which tend to have poorer results than whole cannabis medicines such as Sativex. It is true that there is still a great need for more and longer human clinical studies on its benefits, but thanks to our governments corruption and ignorance it has been a hard fight to get to this point. Thankfully things are changing and further research into cannabis medicine is now happening at an ever quickening pace.

  • Report this Comment On March 17, 2014, at 7:27 AM, areukidding wrote:

    lets face the truth. it is feared by the medical companies in particular the pharmecutical companies. look at the sutdies in the white house under the clinton administration ie; one find was a possible prevention of alzheimers by keeping the human's messiging system operational. how about the first canibus treatments ctr in calif. her life was threatened after her findings. also according to drugs inc. in colo. the leaders of two prominent gangs said it put them out of business. but the saddist thing is how certain entities can control the media wich in turn keep most of america baffled. people wake up and seek the truth. economically it was save our failing country. how many people actually have read the constitution.you'd be surprised of what you find. ie; paper, household products, combustible fuel. keeping it illegal keeps the dea employed. want to address a real problem how about those mathadone treatment programs; what a joke!!!.

  • Report this Comment On March 17, 2014, at 7:31 AM, areukidding wrote:

    just one more thing. where does the medical companies store all the toxic waste from medical labs. it will sit there for 10,000 to 40,000 years. that;s not real comforting is it.

  • Report this Comment On March 17, 2014, at 9:47 AM, stillwater9999 wrote:

    handytrim -

    Your post is the rubbish one. The "studies" you cite are not well run double blinded clinical trials that would pass FDA scrutiny.

  • Report this Comment On March 17, 2014, at 9:49 AM, bottle01 wrote:

    Hay Man, where can I go and get them to expremament on me with the new drug the scientists made and what does it pay?

  • Report this Comment On March 17, 2014, at 11:27 AM, jfelano wrote:

    To the guy that says he tried to grow marijuna for 35yrs and never could get a plant to grow past 8 inches and it dies.......all I can say is wow. My first attmept with some bagseed when I was 14 resulted in 18ft monsters. LOL

  • Report this Comment On March 17, 2014, at 12:36 PM, thiago1978 wrote:

    I had a similar story to that joesbox. I had a friend of mine his older brother had been collecting seeds for years & years. I mean like hundreds in a zip lock bag. I asked for some just joking around. He gave me a film container full. Come April I used the skills my grandpa showed me to plant them in a Garden. Not thinking they would grow I looked out the window about a month later and realized they were growing. as time went on they grew like weeds. no pun intended. My mother said to me look at the grass grow in garden, might wanna weed it out. Came home from school that afternoon and they were torn out and know where to be found. She caught on and she never mentioned it again. They were about 2' tall when they were disposed of.

  • Report this Comment On March 18, 2014, at 6:36 AM, daaaotm2 wrote:

    People will believe, say and do EVERYTHING that their TV, internet or radio tells them to. If their sources tell them to love or hate something, they will do what their devices tell them to. Personally, if it is naturally occurring it should be visited as a viable source of medicine.

  • Report this Comment On March 18, 2014, at 9:43 AM, pebear wrote:

    There is no controversy with marijuana. The government has lied to the US public consistently since the 20's about this plant. The idea of big pharma breaking down marijuana and making millions off of it makes me sick. The stuff should just be legal and if I want to break out the CBD's or whatever canebaniod out of it I should be able to do so. It's time to legalize this now and quit arresting American citizen's over it.

  • Report this Comment On March 18, 2014, at 10:33 AM, LadyMantle wrote:

    The fact the FDA recognizes clinical benefits of Marinol and Cesamet, which main components are THC and cannabinoids (CBD) and are thus listed as Schedule III and Schedule II drugs due to their medicinal benefits is a statement in fact and beyond a reasonable doubt that extensive cannabis research has been carried out through clinical trials. All this talk about more research is a lot of bunk. Cannabis advocates should use this argument at the state and federal level to get it removed from the schedule 1 tier. Too many people are still being prosecuted, sent to jail and fined for petty possession even in states where it has been deemed legal for medical and recreational use.

  • Report this Comment On March 18, 2014, at 1:27 PM, chuckbeaster wrote:

    BENTEARS,

    you are wrong. it is extremely easy to grow. I've been doing it for 10 years and never had a hard time. Were you trying to do it outside or inside? outside you just need to put it out the right time of year (usually in april depending where you are), and if you're doing it inside you just need to make sure you have the right lights (HPS or MH). All you need is lights and decent soil. Let It Grow!!!

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