On Wednesday, Revive Therapeutics Ltd., a tiny Toronto-based company that trades on the OTCQB as RVVTF, revealed that it secured FDA orphan drug designation for cannabidiol (CBD) to prevent hepatic ischemia and reperfusion injury resulting from solid organ transplantation. Under license from South Carolina Research Foundation, a unit of the University of South Carolina, Revive also is investigating REV-200, described as a cannabinoid CB1/CB2 receptor modulator, for the potential treatment of liver diseases such as autoimmune hepatitis and nonalcoholic steatohepatitis, or NASH. But the company, which markets a hemp-based CBD chewing gum branded Relicann, is primarily looking to partner the asset for development. A coveted FDA regulatory designation helps to set it apart.

Close alliance with the FDA to gain in the relatively novel CBD space was most famously parlayed by GW Pharmaceuticals plc in advancing its recently launched cannabidiol, Epidiolex, which gained FDA fast track and orphan drug designations, garnered priority review and was approved with a rare pediatric disease voucher to treat Dravet and Lennox Gastaut syndromes (LGS). (See BioWorld, June 26, 2018.)

Increasingly, innovation in the CBD market is coming from startups and small biopharmas that capitalize on endogenous cannabinoid compounds rather than taking the traditional combinatorial chemistry approach applied by pharmaceutical companies to develop synthetic compounds, according to Money in the Pot, a new report from Derwent, a unit of Clarivate Analytics, parent of BioWorld.

Although the strongest CBD portfolios are held by Roche Holding AG, Boehringer Ingelheim GmbH and Abbvie Inc., filing activity among most big pharmas dropped in recent years, according to the report. Instead, the CBD sector is dominated by corporate entities with small patent portfolios, illustrating an early "wild west" market that is fluid and competitive, reported authors Ed White, director of Clarivate's intellectual property (IP) analytics, and Mark Markley, consultant in IP and Standards. The model suggests that cannabinoid innovation is resulting in the formation of new companies as emerging markets in the space are opened and explored.

U.S. deregulation is helping to drive that research, according to the report, which tracks patent activity in the field. Half of inventors list the U.S. as their place of residence, and the U.S. is the leading country where CBD inventions are registered for protection, with Canada high on that list.

Advances in the sector also are helping to power older pipelines. Consider Insys Therapeutics Inc., of Phoenix, Ariz., which reported this week that it plans to out-license its opioid-related assets, including Subsys, its fentanyl spray to treat cancer patients with breakthrough pain, and transform itself into what CEO Saeed Motahari called "a leader in pharmaceutical cannabinoids."

Subsys fueled the financial success of Insys but also led to legal woes last year when John Kapoor, the company's founder, former CEO and majority owner, was arrested on federal racketeering and fraud charges related to its off-label distribution. (See BioWorld, Oct. 31, 2017.)

CBD, it seems, is the new mantra at Insys, whose cannabinoid platform includes CBD oil solution with three indications – treatment-resistant seizure disorders, including Dravet and LGS, infantile spasms and Prader-Willi syndrome – under clinical evaluation. The FDA has awarded the company's cannabidiol orphan status in six indications and fast track in two. Additionally, an inhaled formulation of dronabinol – marketed as the oral solution Syndros to treat anorexia associated with weight loss in individuals with AIDS and chemotherapy-associated nausea and vomiting in certain patients – recently completed an initial pharmacokinetics study.

"It's possible the CBD programs will become INSY's long-term value driver," Jefferies analyst David Steinberg wrote following the company's third-quarter earnings update. "To that end the first CBD clinical data readout could arrive very shortly. Taken together, [management] could file up to six NDAs in the next two years."

Another prominent name in the space is Zynerba Pharmaceuticals Inc., which rebounded last year from a primary endpoint miss in the phase II study, testing lead CBD gel ZYN-002 in adults with epilepsy, to achieve success in an open-label exploratory phase II trial evaluating the CB2 receptor modulator in fragile X syndrome (FXS). (See BioWorld, Sept. 29, 2017.)

In July, following positive feedback from the FDA, the Devon, Pa.-based company initiated a pivotal phase II/III trial in FXS, with top-line data expected in the second half of 2019. Zynerba also is seeking to partner the drug for co-development and commercialization outside the U.S.

Australia's MMJ Phytotech Ltd. and subsidiary Phytotech Therapeutics Ltd. have advanced PTL-101, an organically derived, highly purified CBD developed in a capsule formulation, into the clinic to treat epilepsy and have additional clinical assets targeting spasticity and pain.

Another clinical-stage company in the space is Kalytera Therapeutics Inc., of San Rafael, Calif., which completed four phase IIa trials of its CBD candidate to treat graft-vs.-host disease (GVHD), is running a phase II study for prevention of GVHD and plans by year-end to begin a seamless phase II/III pivotal registration study for treatment of acute GVHD. The company also has preclinical CBD programs targeting acute and chronic pain, adult respiratory distress syndrome, traumatic brain injury, sepsis-induced acute renal failure, ulcerative colitis and acne.

Operating 'in the shadows of CBD success'

As the Derwent report suggests, much of the drug discovery action is occurring at startups, especially in the U.S. and Canada. Gary Hiller, president and chief operating officer of Los Angeles-based Phytecs Inc., has followed the market leaders carefully to assess the opportunities for his company's early stage pipeline targeting the endocannabinoid (ESC) system. In collaboration with researchers at academic institutions across the globe, the company is conducting studies to assess tetrahydrocannabinol mechanisms of action, evaluate plant screening for ECS modulatory activity, assess new compound discovery and synthesis, and determine cannabinoid synergies and CB1 receptor expression.

"As we learn more and more about the relevance of endocannabinoid system in regulating a host of functions, we should look for multiple ways to target that system to take full advantage of the opportunity" rather than committing to a single approach, Hiller told BioWorld.

The first step is to understand the endocannabinoid system "in its full breadth," he said. Phytecs also is pursuing fluorinated variants of CBD due to the agent's low bioavailability and the commensurate need for high doses to achieve a desired effect. Fluorination enhances binding affinity, Hiller pointed out, and preclinical data suggest that fluorination can increase the potency of CBD – in turn, improving prospects for IP protection.

Lead candidate PECS-101 (formerly HUF-101) is an in-licensed fluorinated cannabidiol aimed at the potential treatment of psychiatric disorders. Other indications of interest for the company's preclinical pipeline include epilepsy, pain and inflammatory diseases. The privately funded company is looking to conduct a capital raise in the next year and is fielding partnering inquiries, according to Hiller.

"We want to take our assets as far as we can, but the plan may not be the same for all indications," he said, noting that large central nervous system indications that require bigger trials call for deeper pockets. In contrast, the company will seek to advance orphan indications on its own and to control those economics.

"Everything we've been doing has been in the shadows of CBD success," Hiller said. As interest in the field grows, so, too, does the spotlight on newer entrants.

CBD-based upstarts continue to emerge. Among them is Inversago Pharma Inc., of Montreal, which closed a $7 million series A in July to support development of lead candidate INV-101, a preclinical CB1 receptor inverse agonist that's being advanced in Prader-Willi. The round was co-led by Genesys Capital and Amorchem with participation from the JDRF T1D Fund, Accel-Rx, Anges Québec Capital, Anges Québec, Tarnagulla Ventures and angel investors. Inversago also has programs in discovery targeting type 1 diabetes, NASH and metabolic disorders, all in-licensed from the NIH.

Medical cannabis company Katexco Pharmaceuticals Corp., of Toronto, was launched last month by Stanford University to exploit agonists of the alpha-7 nicotinic acetylcholine receptor, which acts on immune cells in the brain with the potential to treat inflammatory diseases. (See BioWorld, Oct. 31, 2018.)

Patent data in the Derwent report suggest that deregulation trends in the U.S., Canada, Australia and other countries provide a direct link between the regulatory and drug research environments.

"We can't say with certainty how regulations around cannabis and cannabinoids will change and further affect the innovation landscape," Markley and White reported. "As governments around the world continue to reassess cannabis and cannabinoids for therapeutic use and global acceptance similarly grows for recreational use, we can predict that any further deregulation will act as a catalyst for research and new ideas, new applications and new commercial activity."

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