There's a technology brewing that could make producing medical-grade cannabinoid compounds easier and cheaper than ever before. More efficient manufacturing could bring relief to thousands of patients requiring THC- and CBD-containing compounds while expanding potential markets for related therapies. The U.S. Food and Drug Administration could find its job approving and inspecting drug manufacturing facilities -- a key step in the approval process for every new and marketed drug -- a bit easier, too. As it turns out, the future of cannabinoid-based medicine may have nothing to do with plant-based manufacturing at all.
Manufacturing remains a limiting factor
Although 23 states have approved medical marijuana (the plant), the federal government still views it as a Schedule I substance. That means Uncle Sam is clinging to its belief that marijuana has no medicinal uses and comes with a high risk for abuse. It's no surprise, then, that companies have had more success extracting compounds with therapeutic potential (cannabinoids) from marijuana plants and formulating them into more controlled substances. The FDA certainly favors that route, which makes it possible to evaluate the effectiveness and safety of one or two active ingredients, instead of the thousands of compounds and their varying concentrations in a single plant variety. To recap, medical marijuana refers to therapies requiring inhalation of the combusted plant, while FDA-approved therapies are administered orally through pills or sprays or injected.
However, if cannabinoid-based therapies are ever going to reach their full potential for patients or investors, then production costs and development timelines will need to improve mightily. Pharming, or growing and extracting pharmaceutical compounds in plants, is a costly, time-consuming, and low-yielding process. Consider what must occur to produce a target cannabinoid -- or any active pharmaceutical ingredient -- in a greenhouse. Companies must breed plants, cultivate them for weeks or months in FDA-inspected facilities, extract the low amounts of target cannabinoids, purify them, and formulate the final product. Worse yet, plants don't produce compounds with the consistency required for robust pharmaceutical manufacturing (instead producing several variations of the target compound), which results in lower overall yields.
The industry is slowly moving away from pharming, however. Recent advances in synthetic biology tools make it possible to produce any compound found in a plant in engineered microbes such as yeast or E. coli via standard fermentation, in a process similar to beer brewing. That includes cannabinoids -- and at least one company is already entertaining the idea.
Phorget pharming, microbes rule!
Hyasynth Bio is developing a technology platform that could produce THC, CBD, and any one of the more than 100 cannabinoids in engineered yeast. It believes it can supply the compounds for pharmaceutical applications faster, cheaper, and more safely than through pharming methods. Production would take up to 10 days depending on volumes, while yields and purity would be greatly improved over plant-based manufacturing. Don't think its possible to replace cannabis? Several companies have already improved upon pharming with a little help from synthetic biology tools.
For instance, Amyris was founded to produce artemisinic acid, the precursor to the powerful anti-malarial drug artemisinin, in engineered yeast strains. Global supply was constrained by volatile and costly agricultural supply (link opens PDF) in the sweet wormwood plant, which takes 18 months for a single harvest. Growing demand exacerbated the problem and led to unpredictable incomes for African farmers who sold the raw products to pharmaceutical companies.
Luckily, Amyris was able to successfully scale production in engineered yeast before bowing out to Sanofi, which is distributing the artemisinin-based therapies under a "no profit, no loss" principle to ensure supply is available for the world's poorest. The pharmaceutical giant aims to produce up to one-third of global demand from a single manufacturing facility within the next few years.
The proven commercial success of artemisinic acid provides a good basis for Hyasynth's technology strategy. While still in the early stages of development, the synthetic biology-driven platform could make cannabinoid-based medicines widely accessible for a range of potential ailments. It could also circumvent the intellectual property of drugs currently on the market or in the pipeline.
Threat or just another player?
Cannabinoid-based medicine is quickly becoming a crowded and competitive market. For instance, AbbVie (NYSE:ABBV) sells the THC-containing drug Marinol, which treats nausea caused by chemotherapy and extreme weight loss caused by AIDS. It fetched over $100 million in annual sales before generic competition moved in to steal market share. Sales fell to $40 million per year the last time investors were updated on its progress in 2008.
Marinol contains a chemically synthesized version of THC, which is likely cheaper to produce than competitors made with pharming. However, the drug has been prescribed since the 1980's, which gives several companies hope that new formulations of cannabinoid combinations may be able to compete in efficacy and dosing for similar applications.
Meanwhile, GW Pharmaceuticals (NASDAQ:GWPH) has gone all-in on cannabinoid compounds and has created a world-class Cannabis breeding platform capable of fine-tuning production of various cannabinoids, as depicted in the simplified metabolic pathway chart below.
The company is currently evaluating THC- and CBD-containing Sativex in three phase 3 trials in the United States for treating cancer pain and spasticity from multiple sclerosis, although the drug is already approved in over two dozen countries. Two of the phase 3 trials are identical, with the first having failed to meet its primary endpoint in early January. The second will report results in the second quarter, while the third study, consisting of a more complex design, will announce its findings in late 2015.
Looking beyond Sativex, GW Pharmaceuticals is evaluating five additional cannabinoid compounds in clinical trials worldwide for treating type 2 diabetes, pediatric epilepsy, and more. News that four new phase 3 trials for the company's second leading drug, Epidiolex (the cannabinoid CBD), would commence in early 2015 for two orphan diseases, as well as a phase 2 trial for epilepsy, offset news that Sativex missed in its first phase 3 trial. It also shows the investor enthusiasm surrounding cannabinoid-based medicines.
So will Hyasynth's novel microbial manufacturing technology become a real threat to leaders such as GW Pharmaceuticals? That's certainly a possibility, but given the lengthy timelines of clinical trials, it may make more sense for the company to become a supplier of cannabinoids for medical research and potential treatments rather than a direct competitor. There are over 100 additional cannabinoid compounds found in Cannabis plants that have yet to be fully characterized. Isolating each from plants could take years -- after all, GW Pharmaceuticals has spent tens of millions of dollars and discovered just eight molecules with therapeutic potential.
It would be significantly easier to manipulate genetic pathways in microbes than in plants (breeding), which could produce batches of target molecules in days, not months. That could potentially allow Hyasynth to become the perfect partner to the growing field while playing the role of supplier rather than competitor. For now, however, the technology platform remains years away.
What does it mean for investors?
Patients, investors, and pharmaceutical companies are excited about the big potential of medical marijuana and cannabinoid-based medicines, but pharming remains a limiting factor in its widespread use. Unlike chemical manufacturing, innovations in pharmaceutical manufacturing are bound by lengthy clinical trials that can span a decade or more. That alone could push Hyasynth to pursue a business model focused on supplying pharmaceutical companies and research centers with cheap, pure cannabinoids rather than competing directly in clinical trials. That's good news for GW Pharmaceuticals and others betting their future on marijuana-inspired medicines.
While intriguing and, in my mind, capable of being the future of pharmaceutical and industrial manufacturing, a synthetic biology platform capable of producing cannabinoid compounds remains at least a few years away. Related successes in replicating plant metabolisms in microbes does show its potential for success -- and serves as a reminder that innovation can bring more than incremental changes to industries.