THE comings and goings over the status of CBD as a food or a drug is no longer academic as recent events in Europe testify.
One UK-based business, with a Canadian heritage, saw this coming; treating cannabidiol (CBD) as a pharmaceutical from the company’s inception.
Brains Bioceuticals was created by CEO and Chairman Rick Brar and President Gurdeep Bains following their time with market-listed Canadian Licensed Producer Zenabis.
The nomenclature? It checks their surnames, highlights their ambitions and trumpets cannabis’ potential as a salve to millions.
CBD: A Pharma Industry?
Mr Bains told BusinessCann: “I joined Rick’s company Zenabis as CFO and we saw what was happening in the Canadian space, way too much capital, unrealistic expectations on what the route to market would be – the involvement of public companies ruined the market.
“So we were just looking into Europe for an asset and discovered the UK BSPG Labs in Kent, we really liked it. It had the Pharma angle to it and we think that is the future of the industry.
“One of the problems with the Canadian model is its vertical integration; it does not work in this industry, because you need scale. We are not growers, we concentrate on the higher-margin vertical, which is purification of CBD to an API – an active pharmaceutical ingredient.
“As the industry grows it’s going to be the pharma side, not the recreational side; it is always going to be a race to the bottom, with low-margins and a lack of patient focus.
“We liked the trend of botanical, plant-based medicines and saw CBD as more socially-acceptable than THC, and it has already has proven itself in the pharmaceutical space with GW Pharmaceuticals drugs – Epidyolex and Sativex.
“We are now looking to get CBD out into patients’ hands.”
Successful $30m Fundraise
Brains Bioceuticals was launched in March 2019 with a $30m fundraise and now employs around two dozen staff.
Some of this cash pile is being used to expand its facility in Sandwich, Kent, increasing capacity seven-fold from 864,000g to 6,912,000g per annum. It will host over 50 employees when complete.
Brains is one of the few plant-based CBD API manufacturers to achieve the exacting standards of EudraGMDP.
Its primary CBD API is Medicines and Healthcare products Regulatory Agency licensed in the UK for both human and veterinary use. It contains 99.7% CBD and zero Tetrahydrocannabinol (THC) and Mr Bains describes it as its ‘secret sauce’.
Brains looks to GW Pharmaceuticals as the global leader in CBD-based medicines. Having undertaken clinical trials to prove their efficacy, GW is now the only company allowed to make medical claims for its CBD drugs.
Cannabis Patents As ‘Big Pharma’ Arrives
These clinical trials have also allowed GW to secure patents for their products, and this is the long-term path being pursued by Brains.
Mr Bain said: “We are working with a patent lawyer for a trademark, it is our process which is unique – that’s kind of our secret sauce – and that is what is preventing other companies getting to a botanical API, they cannot get to the purity and consistency we can.”
While it is currently pursuing a patent on its processing, it eventually will look to secure patents on its Brains CBD drugs.
In order to do this, there is a need to undertake clinical trials and Brains is currently involved in a dozen such projects, primarily in Australia, Israel and Brazil.
One of these – for treating epilepsy in youngsters – sees Brains as the exclusive supplier of its CBD API to Prati Donaduzzi & Cia in Brazil.
This has reached phase three and Brains foresees long-term benefits in this as it’s unusual for the base ingredient to be changed once a drug is approved.
“Eventually we want our own brand, but as a start-up company, and one of the first to do B2B APIs this is a sensible way to progress.”
More Clinical Trials Needed
He went on to say it is working with a company in Uruguay which has switched from a synthetic CBD to Brains’ botanical based CBD API.
Here in the UK, with the country’s medicinal cannabis programme stuck in first gear, it is concentrating on educating doctors in a bid to grow the knowledge base.
The main sticking point, across the globe, for the development of cannabis-based medicines is a lack of clinical or observational data, after years of prohibition.
“The most difficult thing in this industry is governments saying there is no data and the only way we can generate that data is though clinical trials,” he said.
However, small changes are under way, he continued: “In the US with its opioid addiction problems, the Government is starting to fund companies running CBD trials for pain so they can reduce their use – as we all know what the negative effects of these are.
“It’s difficult for a start-up to fund these trials but there are signs pharma companies are starting to take an interest in cannabis.”
Regulated CBD Industry On The Way
As well as medical cannabis products, Brains also produces its own CBD retail ranges in a market which is rapidly growing across the globe.
In Europe this means securing authorisation through the Novel Food rules and it is fully supportive of this process.
He said: “The UK is such a weird black market, CBD is available everywhere on the High Street but none of it has been tested to EU GMP standards.
“While a lot of counties are not yet ready for pharma-grade products, as regulations increase in the industry a consistent end-product will become increasingly important.”
More countries will follow the example of Australia, he believes. “At first they let a whole lot of products in, but now the Government is much more strict and they want people to run trials to prove it has a therapeutic effect.”