INMED PHARMACEUTIC COM NPV (OTCMKTS:IMLFF) is an emerging Canadian medical marijuana play that’s been seeing increased interest in recent days. The ostensible catalyst is the company’s announcement of progress on its R&D program in the use of cannabinoids for the treatment of chronic obstructive pulmonary disease (COPD).

The stock has been tracking in a sideways range for the past six weeks after exploding higher by more than 150% in September and October on a major increase in trading volume (120% over the long run average in daily transactions). The move breaks the stock out of its longer-term bearish trend and points technical indicators higher, so we thought it was a good time to take a closer look at this one.

INMED PHARMACEUTIC COM NPV (OTCMKTS:IMLFF) is a pre-clinical stage biopharmaceutical company that engages in the research and development of novel and cannabinoid-based therapies in Canada.

The company’s products under pre-clinical development stage include INM-750 for the treatment of epidermolysis bullosa; and INM-085 for the treatment of glaucoma. It is also developing various drugs for diseases, such as ocular, pain and inflammation, dermatology, central nervous system, metabolic, and respiratory.

The company was formerly known as Cannabis Technologies Inc. and changed its name to InMed Pharmaceuticals Inc. in October 2014. InMed Pharmaceuticals Inc. was incorporated in 1981 and is based in Vancouver, Canada.

As far as the balance sheet, IMLFF has a market cap of $9.3M, with a decent store ($124.28k) of cash on the books, total assets above $1.2M, and virtually no accumulated debt. That’s a much healthier status than most of its peers.

Catalysts Abound

As noted above, InMed initiated its COPD program last year and has been using its bioinformatics analysis tool to identify the targets and potential active compounds that can be useful for the treatment of COPD. Subsequently, with in vitro assays using human lung fibroblasts (HFL-1 cell line), InMed has demonstrated that certain cannabinoid compounds are capable of affecting a specific protein in the biochemical pathway relevant to healing and fibrosis in the lung.

That represents a major step toward getting a foothold into a huge growth market that most folks know very little about. It’s worth exploring. The global COPD market is estimated to currently be worth $11.3 billion, and is forecast to reach a value of $15.6 billion by 2019 according to GBI Research.

Dr. Sazzad Hossain, Chief Scientific Officer of InMed, noted, “Taking into consideration the impact of this specific protein’s role in lung tissue remodeling and fibrosis, these preliminary data are important and promising for developing cannabinoid-based therapies for COPD.” It is well known that cannabinoids exhibit bronchodilatory, immunosuppressive, and anti-inflammatory properties and thus cannabinoid-based therapies may offer safer and more effective treatment options for COPD.

“We continue to make significant scientific progress that further validates InMed’s proprietary bioinformatics analysis tool as a cost-effective way to identify drug-disease targets and expedite their validation in pre-clinical models,” added Dr. Ado Muhammed, Chief Medical Officer of InMed.  “In addition to our primary drug development programs in Epidermolysis Bullosa and Glaucoma, we are pleased to continue to expand the role of cannabinoids in other disease areas.”
Oh Canada

In addition, IMLFF has another distinct advantage: Canada is the place to be right now when it comes to pot. According to a recent Bloomberg article, Canada’s push to legalize marijuana could be a “game changer” for the recreational pot industry with the potential to reach C$6 billion ($4.5 billion) in sales by 2021. A massive black market for marijuana exists in Canada that Canaccord Genuity analysts believe, if brought into legal channels, might bring about sales of 400K kg, or nearly 900K lbs, of cannabis in year one.

If legalization occurs along expected timelines, there will be about 3.8 million legal recreational users of marijuana across Canada by 2021, according to the note. Demand for medical cannabis is growing at a significant pace and by 2021, combined annual demand for medical and recreational cannabis will be about 575,000 kilograms, the Canaccord report said.

While nothing is certain in the wild Canadian cannabis craze, we can rely on one basic idea: this is a good place to buy your lotto tickets. Our research into recent trends and upcoming catalysts suggests IMLFF is an interesting stock to keep on the radar.

Here is the Business Case for the Investment:

InMed’s management believes that it could get INM-750 through trials and approved for less than $40 million.  That would be the advantage of having an all-natural treatment which is much more cost effective.  As an orphan-drug is also isn’t hard to get patients to enroll for trials which shortens the time window and eases cash burn.

Currently, there are no approved treatments for EB. InMed’s lead product, INM-.‐750 targets cannabinoid receptors in the skin to deliver symptomatic relief for all 5 hallmarks of the disease:

  • accelerated wound healing
  • pain reduction
  • anti-itch properties
  • antimicrobial activity
  • anti-inflammation

AND may even re-establish the epidermal/dermal junction by upregulation of specific keratins in the skin, essentially reversing the disease.

 

Market Validation $$ of InMed research:

A Biotech studying EB called Scioderm was acquired by Amicus for $847M!

  • Scioderm’s sole clinical asset is ZorblisaTM, a Ph3 product in development for EB
  • Scioderm was acquired by Amicus in Sept ‘15 for US $847M.

The Acquisition was based on results from just 42 patients in a Phase 2b study

  • JP Morgan and Cowen research reports estimate peak sales for ZorblisaTM in EB of $900M – $1.2Billion

So InMed Investors can look forward to huge potential investment win And That’s only one of their Drugs.

Other notable stocks in the biotechnology sector to keep an eye are  Mast Therapeutics Inc (NYSEMKT:MSTX), Novavax, Inc.(NASDAQ:NVAX), Peregrine Pharmaceuticals (NASDAQ:PPHM) andOpexa Therapeutics Inc (NASDAQ:OPXA).