Ananda Developments (AQSE: ANA) is an AQUIS-listed healthcare company involved in the development of cannabinoid-based medicines with two concurrently running, third-party funded, Phase II randomised control trials (RCTs).
The company has c.2.8bn shares on issue and at the current share price of 0.56p, it has a market capitalisation of £15.95m.
Ananda’s most exciting asset is its patent pending cannabinoid formulations which are being used in two RCTs, both targeting two different forms of complex inflammatory pain. The company is supplying the trial medicine and matching placebo for this trial at cost, the rest of the funding is coming via third-party non-dilutive grants. With the data being freely shared with Ananda from this trial, they are in effect running these two trials for a far smaller amount than is usual to see whilst being given access to all of the potential upside. The formulation IP remains with Ananda.
The NHS’s £5bn Spend
The NHS spends, in the UK, more than £5 billion per year attempting (poorly) to treat complex pain conditions. It is expected that if good results are gained from these trials that the clinicians leading the trials will request expedited approvals to get the medicine licensed and therefore available on the NHS. This would unlock significant revenue streams for Ananda and make it the first cannabinoid medicine for pain to be readily available on the NHS. Near Term Revenue
Concurrently, Ananda is launching both the medicine being used in the RCTs and one other as ‘unlicensed’ medicines giving it some potential very near-term revenue streams. Given the current unlicensed cannabinoid medicine sector is plagued by supply issues, owing to the majority of medicines being imported and then not passing UK quality thresholds, it is also likely to see Ananda’s oils take significant chunks out of currently available medicines thanks to it being manufactured in the UK and being easily replicable thanks to the IP Ananda has (and for which it has patents pending).
Development of Active Pharmaceutical Ingredients
Ananda is also involved in the development of cannabinoid medicines via its genetic stabilisation programme. This is being conducted via the selected breeding of various cannabis strains to create >98% genetically identical seeds, from which >98% genetically identical cannabis crops can be grown.
As can be seen from the recent Phylos Labs/Organigram partnership, there is a growing movement in the cannabis cultivation sector to move from clone-based cultivation to seed-based cultivation. Thousands of hours of operational time and far more in operational expenditure is spent maintaining crops of clone plants and there is an increasing recognition that a move to seed based cultivation will achieve optimal pharmaceutical results. Ananda is primed to take full advantage of this move, given it is less than 12 months away from its goal of >98% identical genetics. At this point, it will be in a position to create unique strains and sell these genetics to cultivators either on an ongoing season to season basis..
Ananda would be able to also begin cultivating its own crops of genetically stable plants and supply these to the UK market – and again take advantage of the growing desire from regulators, clinicians and patients for a consistent and domestic supply of cannabinoid medicines. It has been working on cultivating large numbers of medical cannabis plants in field trials, ahead of applying for commercial licence approvals from the MHRA and Home Office.
SP Angel, Ananda’s adviser and broker, has released an initiation research report on Ananda. This underpins Ananda in being the only ‘cannabis’ business to have such research coverage and is an acknowledgement that it is a mainstream healthcare company, not an alternative medical offering. Ananda should really move to AIM and is well positioned to do this, thanks to its PLC savvy management team, tightly held share register – the founders own 57.98% of the shares and the Board collectively owns 71.32% of the shares, a NOMAD already onboard and already running the QCA corporate governance code.
With a listing already, this move should prove more easily done than going direct to AIM from private and with consolidation rife in this space already, one would not be surprised to see Ananda add to its operations alongside the move.
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The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
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