Jazz Pharmaceuticals
The pharmaceutical giant announced last week that its flagship cannabinoid treatment, Epidyolex, failed to pass its Phase 3 clinical trial in Japan.
In 2019, Japan approved GW Pharmaceuticals’ Epidiolex (which was purchased by Jazz Pharmaceuticals for $7.2bn in 2021) for clinical trials in epileptic patients with Dravet Syndrome, Lennox-Gastaut syndrome and tuberous sclerosis complex, and its Phase 3 clinical trials for Epidyolex in Japan started in December 2022.
The ‘top-line’ results of this open-label, single-arm trial, which saught to evaluate the safety and efficacy of Epidyolex as an adjunctive treatment for these conditions, were published in a press release on August 22.
According to the company, the trial did not meet the ‘primary efficacy endpoint of a pre-specified percentage change in indication-associated seizure frequency during the treatment period (up to 16 weeks) compared to baseline in Japanese pediatric patients’.
Despite this, Jazz said ‘numeric improvements were observed’ in both primary and secondary endpoints.
Epidyolex, now approved in 35 countries, continued to be one of the company’s strongest performers last year, reportedly remaining ‘on track to deliver on its blockbuster potential’.
Over 2023, net product sales increased by 15% to $845.5m, including a 16% year-on-year rise in Q4 to $240.6m.
Its entrance into Japan would have given the company a near exclusive foothold in the market, which until recently has been one of the most conservative in regards to cannabis reform, even for medical purposes.
Now the future for Epidyolex in Japan remains uncertain, though the company states that it will continue to pursue regulatory approval in the country.
“We are confident in the overall clinical profile of Epidyolex, which has been established in five Phase 3 clinical trials in more than 900 patients. We believe the totality of the Epidyolex global data, including the findings from this trial, supports advancement of the program in Japan,” said Rob Iannone, M.D., M.S.C.E., executive vice president, global head of research and development of Jazz Pharmaceuticals.
“We are continuing to collect data in Japanese patients and plan to engage with regulatory authorities in Japan regarding a potential new drug application (JNDA). We recognize the significant unmet need for patients in Japan living with rare epilepsies and thank the investigators, patients and caregivers who are involved in this trial.”
British American Tobacco
British American Tobacco’s (BAT) growing investment in the cannabis industry is likely to drive ‘fundamental growth’, despite falling tobacco revenues.
New analysis from Pearl Gray Equity and Research, published in SeekingAlpha, show that BAT has recently outperformed the S&P 500, leading them to reassess its key growth drivers, including its foray into the cannabis sector.
Despite facing challenges in its traditional tobacco business, BAT’s investment in cannabis, particularly through its increased stake in the Canadian producer Organigram, signals a strategic shift towards diversification and growth in emerging markets, the analysts stated.
BAT has committed to boosting its stake in Organigram from 19% to 45% by investing £74 million between January 2024 and January 2025.
This move is seen as a way to tap into the Canadian cannabis market, which is expected to provide diversification benefits, smooth revenue fluctuations, and create potential synergies with BAT’s existing product lines.
While BAT’s overall revenue saw a slight decline in the first half of the year, largely due to the sale of its Russian and Belarusian segments, the company’s ‘new categories’ segment, which includes its cannabis-related business, now makes up about 17.9% of its revenue.
This segment has shown robust growth and is expected to continue expanding, particularly through innovations in products like Velo and further developments in the cannabis market.
Pearl Gray continued that the cannabis industry represents a significant opportunity for BAT, offering a way to offset declines in traditional tobacco sales and position the company for long-term growth in a rapidly evolving market.
Despite industry-wide challenges, such as pricing pressures and illicit trade, BAT’s strategic investments in cannabis and other new product categories suggest a strong potential for future growth and value creation for shareholders.
DanCann Pharma
DanCann Pharma has reported a robust Q2 2024 performance, marked by record revenue, a significant reduction in operating losses, and the company’s first-ever positive EBITDA.
According to the company, this strong showing reflects the success of DanCann Pharma’s strategic adjustments, which Business of Cannabis reported in May, and cost management initiatives, positioning the company for continued growth in the medical cannabis sector.
For the quarter, DanCann Pharma achieved its highest-ever revenue, totaling DKK 3.86m, which represents a 56.9% increase year-on-year for the first half of 2024, primarily driven by a substantial increase in product sales, with approximately 9,700 packages of medicine sold in the first half of the year—up 40% from the 6,900 packages sold during the same period in 2023.
The company’s strategic focus on efficiency and cost control contributed to a marked improvement in its financial performance. Notably, DanCann Pharma reported a positive EBITDA of DKK 0.10m in Q2 2024, a significant turnaround from the negative EBITDA of DKK -2.30m recorded in Q2 2023, achieved before the launch of its new products.
In light of these developments, DanCann Pharma has adjusted its financial guidance for the remainder of 2024. The company now expects an EBITDA range of DKK -3.0m to -3.5m, an improvement from the previous expectation of DKK -4.0m.
Revenue expectations have been slightly revised down to DKK 11.0 to 12.0 million due to delays in the Danish Medicines Agency’s approval processes, which also impacted its Danish stablemate Stenocare’s outlook last week.
The positive Q2 performance is also attributed to DanCann Pharma’s successful capital restructuring. The company completed a rights issue, which, despite raising less than anticipated, resulted in a clean balance sheet with zero debt. This financial flexibility is expected to support future growth initiatives and the launch of new products.
Looking ahead, DanCann Pharma has made significant progress in expanding its product pipeline. The company has submitted two new medicines, FLS04 and FLS05, to the Danish Medicines Agency, with approvals anticipated by Q4 2024. Additionally, another product, EXT02, submitted in December 2023, is expected to receive approval in the second half of 2024.
As such, the company has seen a bump in stock price, rising by over 20% since its results were published.
The post Jazz Fails Phase 3 Trial in Japan, BAT Set to See Growth From Cannabis Investment, & DanCann Pharma Reports First Profit appeared first on Business of Cannabis.
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