Potential $40 Billion Market

Over the past 20 years studies have shown the efficacy of using marijuana in medicine specifically its psychoactive ingredient, tetrahydrocannabinol. Forty billion dollars is the number of dollars up for grabs in the North American pharma market for pain, anxiety and mood disorders. Cannasat Therapeutics Inc, a junior drug developer located in Canada, is now targeting those conditions with treatments inspired by cannabis sativa. According to the October 7, 2008 National Post article, ("Just Don't Call It Pot") "Research showing the potential for cannabis-based drugs has been trickling into pharmaceutical labs since the 1980s, and the scientific community has long been convinced of their usefulness as pain-relievers and appetite stimulants. Meanwhile, industry experts say that major pharmaceutical firms such as Bayer and Sanofi-Aventis have all quietly entered the space with their own cannabinoid platforms. They're watching closely as junior companies like Cannasat and its main competitor, U.K.-based GW Pharmaceuticals, develop the first mainstream drugs based on cannabis derivatives or synthetic versions of THC."

The article states, "Back in Cannasat's lab, chief scientific officer Umar Syed is enthusiastically talking about CAT 310. The drug, he says, was designed with the stigma of cannabinoid-based drugs in mind. At the same time, he believes the company will get more mileage from the potential of the delivery mechanism, known as 'nano-encapsulation,' which Cannasat is using under license from the Finnish university researchers who developed it. If CAT 310 clears its trials, its dissolving pill formulation will be key to its ability to compete with a dronabinol drug already on the market - an oral spray produced by GW Pharmaceuticals. So far, reception to GW's spray has been mixed. By contrast, Cannasat's CAT 310 pill dissolves slowly in the mouth, delivering the drug more efficiently to the bloodstream, says Syed, and patients can take smaller doses, thus reducing unwanted side effects such as intoxication. At least, in theory. At the moment, the 'nano-encapsulation' technology Cannasat uses to make the CAT 310 tablets works too well. As the pill dissolves, it encases the dronabinol molecules, preventing enough of them from being absorbed. That issue led to the failure of an earlier attempt to complete Phase I trials for CAT 310. But Syed says that problem can be overcome with a tweaking of the formulation in advance of CAT 310's new set of Phase I trials."

The article notes, "But CAT 310 is only the first step in Cannasat's long-term strategy. The company has another, even bigger, project in the works-a potential ace up its sleeve called CAT 320. The drug is based on a molecule found in cannabis leaves called cannabidiol (CBD)-which has none of the psychoactive properties associated with marijuana-and is showing potential in the treatment of various mood and psychotic disorders including schizophrenia, a huge global market. In 2005, German scientists reported results of a small study involving schizophrenics, during the International Cannabinoid Research Society conference, held in Tampa, Fla., that year. That study showed that CBD, taken four times a day, was as effective as any of the dopamine inhibitors currently on the market for schizophrenia - but without side effects that include rapid weight gain and a muscle rigidity resembling Parkinson's disease. Since dopamine inhibitors are used to treat a variety of psychiatric disorders, Cannasat is now rushing to replicate the German study and reformulate CBD into a once-a-day time-release capsule, which is far easier for mental patients to take. If the company's human trials - scheduled to begin spring of 2009 - prove successful, CAT 320 could ultimately compete with current dopamine drugs and take a substantial chunk of the $15-billion market in North America. 'We know we have a winner,' says Syed."

The article adds, "Cannasat's last remaining hurdle is the one they've already worked hard to overcome: the market's reluctance to invest in cannabis-based drugs. It may seem trivial, but Cannasat's survival will depend on support from fund managers, and Hill says the company has to do more to convince them that its products will be accepted by regulators. After all, similar drugs have already been approved."