Untapped markets for Cannabinoids = Big Oppty

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This Latest Marijuana Survey Should Be Great News for Cannabis-Focused Biotechs
No pain, big gain? There could be an untapped market for cannabinoids that biotechs aren't aggressively pursuing yet.
Keith Speights (TMFFishBiz)
May 23, 2018 at 6:02AM
Support for medical marijuana is at an all-time high in the U.S. The first marijuana plant-based prescription drug is on the verge of winning FDA approval for treating two rare forms of epilepsy. But could cannabis-based drugs target more common indications that affect millions of Americans? Maybe so.

A recent survey uncovered some intriguing news about how some individuals are using marijuana. These results could hint at the potential for biotechs to develop cannabinoids that can treat a problem that affects nearly 40 million Americans.

Marijuana leaves inside medical capsules
IMAGE SOURCE: GETTY IMAGES.

Older adults and marijuana
It's not just younger adults who support legalization of medical marijuana. In April, the AARP reported findings from a survey that found 80% of Americans between the ages of 50 and 80 either strongly or somewhat support the use of marijuana with a physician's consent. Only 6% of these older individuals actually used marijuana themselves, though.

Keep in mind that the AARP survey included states where medical marijuana isn't yet legal. A new survey conducted by Colorado market intelligence and consumer research firm BDS Analytics provides a new perspective on senior adults and marijuana use.

BD Analytics surveyed 11,600 adults in 26 states where medical marijuana has been legalized. This survey found that 12% of adults age 50 and over have personally used marijuana in the last six months. Another 41% are thinking about trying marijuana.

But what's especially intriguing is why these older Americans have either used marijuana or are considering doing so. Only a small fraction -- 6% -- stated their purpose of using marijuana was to get high. The No. 1 reason cited was for pain relief. Nearly one out of five survey respondents age 50 or older who were thinking about using or had already used marijuana were most interested in the drug because of its potential to alleviate pain.

Where there's smoke, there's fire
It's unlikely that Americans, especially older Americans, would consider using marijuana for pain relief unless they thought the drug would be effective. As it turns out, where there's smoke, there's fire.

Research has identified quite a few reasons to believe that marijuana could be effective at relieving pain. A scientific study published in 2014 found significantly fewer opioid overdose deaths per year in states that had legalized medical marijuana compared to states that had not. The chief problem with that study, though, was that it only showed correlation, not causation.

However, the Journal of Pain, the official journal of the American Pain Society, reported in June 2016 results from a University of Michigan study that found medical marijuana patients were able to reduce their use of opioids for pain relief by more than 50%. Another 2016 study conducted in Israel found that 44% of patients with chronic pain were able to stop taking prescription opioid drugs within seven months of beginning to use medical marijuana.

Perhaps the strongest endorsement for use of marijuana in treating pain came from the National Academies of Sciences, Engineering, and Medicine. The organization published a report in 2017 on the health effects of cannabis and cannabinoids. This report stated, "In adults with chronic pain, patients who were treated with cannabis or cannabinoids are more likely to experience a clinically significant reduction in pain symptoms."

Treating pain is a big deal -- and a big business. More than 25 million Americans experience chronic severe pain, according to data from the National Institutes of Health (NIH). Biopharmaceutical companies are scrambling to develop effective pain treatments that don't have the negative side effects associated with opioids.

Calling all cannabinoid-focused biotechs
All of this should be great news for cannabinoid-focused biotechs. You might think several of them would have cannabinoids in development targeting treatment of pain. But it's not a huge focus for most of these biotechs so far.

GW Pharmaceuticals (NASDAQ:GWPH) is best known for Epidiolex -- a cannabidiol (CBD) drug that could be one of the biggest new drugs launched in 2018. Epidiolex is a great example of how a concentrated form of CBD can be much more effective than off-the-shelf medical marijuana.

GW Pharmaceuticals already has another cannabinoid on the market in several countries outside of the U.S. for treating multiple sclerosis spasticity and pain as well as chronic cancer pain. The biotech plans to meet with the FDA in the second half of 2018 about moving forward with a pivotal clinical study for Sativex in the U.S. Aside from that, though, GW doesn't have any other efforts in progress targeting treatment of pain.

What about Insys Pharmaceuticals (NASDAQ:INSY)? The biotech's lead product is an opioid drug, but it also has an approved cannabinoid drug on the market for treating anorexia in people with AIDS who have lost weight, and chemotherapy-induced nausea and vomiting. Insys has a couple of experimental pain drugs in its pipeline -- but none of them are cannabinoids. The company's lead cannabinoid candidate targets childhood absence epilepsy, infantile spasms, genetic disorder Prader-Willi syndrome -- but not pain.

Then there's Cara Therapeutics (NASDAQ:CARA). The biotech has a cannabinoid receptor agonist, CR701, which could target treatment of pain. But the drug hasn't begun clinical studies at this point. Cara's primary focus is its lead candidate, CR845, a kappa opioid being evaluated for treating chronic kidney disease-associated pruritis, post-operative pain, and chronic pain.

Tiny GB Sciences is researching the use of cannabinoids in treating neuropathic pain and chronic pain. Another tiny biotech, Axim Biotechnologies, is evaluating a cannabis-infused chewing gum in MS pain and spasticity. But both programs are years away from possibly gaining regulatory approval.

The bottom line is that biotechs aren't doing much so far to investigate the potential for cannabinoids in treating pain. With the latest survey results indicating that a sizable number of older adults are looking to medical marijuana for pain relief, these biotechs could be missing out on a great opportunity.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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