OWCP: A Unique Pure-Play in the Epicenter of Cannabis Research (with Executive Interview)
February 28th, 2017
News, Top News
Israel has become the global epicenter for cannabis research and development over the past several decades. Teva Pharmaceuticals Inc.’s (NASDAQ: TEVA) purchase of Syqe Medical and the government’s moves to open up medical cannabis exports only underscore the country’s commitment to bringing cannabis therapeutics to the rest of the world. As a result, investors looking for opportunities in cannabis biotechs should definitely be looking at Israel.
In this article, we will take a look at OWC Pharmaceuticals Inc. (OTCQB: OWCP) and why it represents a compelling pure-play in Israel’s burgeoning cannabis sector.
Epicenter of Cannabis R&D
Israel has always been on the cutting-edge of cannabis research and development. In fact, Israeli organic chemist Professor Raphael Mechoulam and his team of scientists originally discovered the chemical structure of cannabidiol (CBD) and were the first to isolate tetrahydrocannabinol (THC). The United States fell significantly behind when President Nixon determined that cannabis was a Schedule I Controlled Substance in the 1970s – a move that prevented research for decades.
Since then, Israel has continued to be a pioneer of the cannabis industry. The government recently moved to decriminalize the drug for personal use while approving a plan that would enable medical marijuana companies to export products internationally. These moves prompted investors to invest some $100 million into over 70 companies involved in the industry alongside the government’s own $2 million investment designed to spur the development of new strains.
The country’s largest pharmaceutical companies have also embraced cannabis rather than avoiding it. For instance, Teva – the largest producer of generic pharmaceuticals in the world – recently purchased Syqe Medical, which has developed an innovative medical cannabis inhaler. The move signals an entirely different approach to the market than large U.S. giants like Pfizer Inc. (NYSE: PFE).
Teva Pharmaceuticals Inc. may be involved in the cannabis industry, but it’s hardly a pure-play given its extensive reach into all areas of the pharmaceutical industry. Investors may want to take a look at pure-play opportunities like OWC Pharmaceuticals instead, given that 100% of the company’s focus is dedicated to cannabinoid research and development and it could stand to benefit the most in terms of percentage revenue and market cap gains.
OWC Pharmaceuticals owns 100% of One World Cannabis Ltd., which was formed to apply pharmaceutical research protocols and disciplines to the global medical cannabis space. Dr. Yehuda Baruch spearheads the company’s research efforts after serving as the head of the Israeli Ministry of Health’s Medical Cannabis Program over 10 years, overseeing clinical trials, regulatory compliance, and other industry-wide issues.
The rest of the company’s management team is experienced in areas of business development, international sales, public accounting, and investment banking. For a company of its size, the management team is both impressive and highly-capable of executing on its mission of bringing Israeli cannabis science to U.S. state-licensed businesses, Europe, Canada, South America, and other end markets where medical cannabis has been legalized.
Broad Potential with Catalysts
OWC Pharmaceuticals is focused on the development of two delivery systems: A proprietary, cannabinoid-enriched sublingual tablet and a proprietary topical compound. Between these, the company plans to address several multi-billion dollar end markets including serious medical conditions like multiple myeloma, post-traumatic stress disorder, fibromyalgia, and psoriasis, along with hundreds of additional addressable indications down the road.
Orally disintegrating tablets
OWC Pharmaceuticals announced the development of a proprietary, cannabinoid-enriched sublingual tablet for the administration of medical cannabis in October of 2016. The tablet was developed to increase the bioavailability of cannabinoids and provide an optimal administration method for consistent dosing. The company plans to develop the tablet to treat conditions like multiple myeloma, post-traumatic stress disorder, and fibromyalgia.
Prior to launching the tablet, the company completed in-vitro testing of a cannabinoid-based formulation for multiple myeloma in March of 2016. Management plans to proceed with pre-clinical trials approved by the Institutional Review Board (IRB) to duplicate those results in mice before proceeding with human trials. The in-vitro testing, however, showed 100% malignant cell death in 60% of infected mice cells – promising results.
OWC Pharmaceuticals formulated a topical cannabinoid-based cream for the treatment of psoriasis in partnership with one of Israel’s largest cosmetic manufacturers – Emilia Cosmetics Ltd. – in March of 2016. Soon after, the company completed the Institutional Review Board (IRB) protocol for a Phase I equivalent, double-blind, randomized and placebo-controlled study and secured $300,000 in funding from U.S.-based Medmar LLC.
The company began the trial in conjunction with a major Israel-based medical center in December of 2016 to evaluate the safety and efficacy of the topical cream. Management is hopeful that the psoriasis cream will be launched in the U.S. and European markets during the second quarter of this year depending on state-to-state regulatory approvals.
OWC Pharmaceuticals Inc. (OTCQB: OWCP) represents a unique pure-play in Israel’s burgeoning cannabis industry. With an experienced management team at the helm, the company has focused its efforts on treating serious medical conditions with two core delivery systems that include a sublingual tablet that enhances bioavailability and a topical cream. Investors may want to keep an eye on the stock given these near-term catalysts in Q2’2017.
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