parafigm capital report Scale-up Central: WLLW Forms Pact Noramco for Cannabinoid Biosynthesis Platform Development
Cannabis Sector Investment Thesis. Companies that develop empowering technologies and robust evidence for the clinical use of cannabis will distinguish themselves not only in clinical and medical applications of cannabis, but also in adult-use (recreational) cannabis markets. With evidence from gold-standard clinical trials comes physician adoption. With physician adoption comes Pharma buy-in: the gateway to a >US$2T global Pharma market.
Event
Willow Biosciences (WLLW) announced an exclusive joint development agreement (JDA) to build a yeast-based biosynthesis platform with Noramco (private), a leading industrial-scale manufacturer of controlled chemicals based in the U.S.
Highlights
WLLW-Noramco JDA Enables Scale-up and Distribution of Pure CBD by Biosynthesis | WLLW announced its exclusive JDA with Noramco to collaboratively develop a yeast-based biosynthesis platform for the production of CBD.
o WLLW—with its expertise in gene discovery, biochemistry, and molecular biology, and with management’s heritage from Canadian biotechnology companies Epimeron and BioCan Technologies—will be responsible for optimizing its yeast-based cannabinoid production platform.
o Noramco—with its long track record of producing and distributing high-purity controlled substances at large scale—will be responsible for scale-up, regulatory submission, and marketing and distribution of the CBD end product
Noramco Is Quietly Dominating the Pure Cannabinoid Supply Universe | Formerly the opiates production unit of Johnson and Johnson (JNJ), Noramco is a DEA-licensed producer of controlled substances with a long, international client list. While Noramco manufactures a wide variety of controlled active pharmaceutical ingredients (APIs), from amphetamines to naloxone, the company has recently placed a special focus on manufacturing cannabinoids by chemical synthesis.
o Noramco has the capability of manufacturing APIs to the multi-tonne scale and has developed synthesis routes for more than 30 cannabinoids product.
o In the realm of cannabinoid drug development, Noramco has agreements with some key names: Cardiol Therapeutics (CRDL), Emerald Bioscience (EMBI), Axim Biotechnologies (AXIM); Teewinot Life Sciences (private).
Conclusion
This deal illustrates that even a global chemical manufacturer such as Noramco understands the advantages of biosynthesis technologies. As such, we view this agreement between WLLW and Noramco as very positive for both companies:
o WLLW gains Noramco’s experience bringing technologies from the lab to industrial scale, its vast manufacturing infrastructure, its expertise in controlled substance compliance and transport, and its international distribution networks.
o Noramco gains an innovative cannabinoid production methodology through WLLW’s biosynthesis technology, which could, among the multiplicity of benefits associated with biosynthesis, reduce Noramco’s production costs markedly, benefiting the company and all of its clients.
Rahul Sarugaser, PhD, MASc, Analyst | 416.216.3564 | rsarugaser@paradigmcap.com Michael W. Freeman, MASc | 416.361.9080 | mfreeman@paradigmcap.com
All figures in C$, unless otherwise noted.
Companies Highlighted in this Note:
Algae-C (private)
Amyris Inc. (AMRS)
Axim Biotechnologies Inc. (AXIM)
BioCan Technologies Inc. (private, now WLLW)
Cardiol Therapeutics Inc. (CRDL)
Cellibre (private)
Demetrix Inc. (private)
Emerald Bioscience (EMBI, formerly Nemus Bioscience)
Epimeron Inc. (private, now WLLW)
Ginkgo Bioworks (private)
Hyasynth Biologicals Inc. (private)
Intrexon Corp. (XON)
Invizyne Technologies Inc. (private)
Johnson and Johnson (JNJ)
Noramco (private)
Purissima (private)
Renew Biopharma Inc. (private)
Teewinot Life Sciences Corp. (private)
Willow Biosciences Inc. (WLLW)
Recent Notes Covering the Cannabis Space
Advancing Texas Bill Expands Medical Cannabis Program 100-Fold, All Served by Just 3 Cultivators (link)
ZENA-Farmako Biosynthesis Deal: Transcending Borders for Cannabinoid Manufacturing (link)
Paradigm Biosynthesis Conference: A Summary (link); All Speaker Presentations (link)
TRST Raising US$200M; Highlights Biosynthesis Development; Q1/19 Guidance Looking Good (link)
Biosynthesis for the Whole World to See: The Economist Shines a Light on Syn Bio (link)
FDA Public Hearing Looking for Clarity on How CBD in Food, Drink, and OTC Products Will be Regulated (link)
FL to Boost Early Entrant Dispensary Caps | AMRS’ US$10M Biosynthesis Milestone | VFF Doubles Capacity | TLRY’s Studies Reaffirm Clinical Focus (link)
AMRS US$300M Biosynthesis Deal—Precursor to a Tsunami of Coming Cannabinoid Biosynthesis Deals (link)
Cannabinoid Biosynthesis: Engineering the Most Disruptive Technology in the Cannabis Industry (link)
Shoppers Launches Medical Cannabis Portal: LPs Generating Clinical Data Will Win in Medical Market (link)
Big Pharma Getting in Bed with Cannabis: Tilray Deal with Sandoz (Novartis) Goes Global (link)
Momentum Building in Clinical Cannabis (link)
Where My Margins At? Medical. That’s Where (link)
How to Launch a Pharmaceutical Cannabis Drug: GW Pharma’s Plan for Its FDA-Approved Epidiolex (link)
Cronos Deal with Ginkgo Bioworks—Strong Move Toward the Most Disruptive Technology in the Cannabis Industry (link)
Volume II: The Evidence for Cannabis as Medicine (link)
Volume I: Medical Cannabis, A Biochemical Cosmos (link)
HEALTHCARE
Paradigm Capital Inc. | IIROC/TSX member Page | 2
Medical Cannabis
RESEARCH NOTE | June 5, 2019
The new fleet of cannabinoid biosynthesis companies should soon be making similar arrangements, including (all private): Algae-C, Cellibre, Demetrix, Hyasynth, Invizyne, Purissima, Renew Biopharma, and many others.
o While unconfirmed, we expect that incumbent players in the biological manufacturing space—e.g. Amyris (AMRS), Ginkgo Bioworks (private), Intrexon (XON)—have a firm grasp on what is required to scale product and would have in-place relationships with contract manufacturers (or its own production plants).
o “Beginning with the end in mind”—i.e. designing a lab-scale process that is suited to industrial scale—is a common expression among groups experienced in the bio-based manufacturing space; the concept is critical to the commercial success products