Cannabinoids have been the focus of intense clinical research following the legalization of medical cannabis by several U.S. states. While pioneers like British-based GW Pharmaceuticals plc (NASDAQ: GWPH) have been actively studying cannabinoids since the 1990s, many North American companies haven’t started major research until recent years with compounds just starting clinical trials.

Cannabis Technologies Inc. (OTC: CANLF) (TSX-V: CAN) has been called the “junior GW” of the cannabis industry with its growing pipeline of cannabinoid-based therapies targeting a number of different conditions. On August 18, 2014, the company announced its second therapy, CTI-091, for the relief of joint pain and swelling associated with arthritis and joint disease.

Preliminary studies indicated that CTI-091 suppresses the human macrophage interleukin-6, a major inflammation biomarker, suggestive of strong scientific evidence that cannabis extracts reverse the disease progression. Once the company completes improvements to the delivery systems efficacy, management plans to complete pre-clinical trials and initiate Phase I clinical trials to assess the compound’s safety profile.

The market for effective arthritis treatments is enormous. With an estimated 50 million U.S. citizens suffering from arthritis or related diseases, several companies are targeting a piece of the estimated $35 billion global market. AstraZeneca plc’s (NYSE: AZN) and Amgen Inc.’s (NASDAQ: AMGN) brodalumab, for instance, is projected to peak at $0.5 billion to $1.5 billion in sales. This is a drop in the bucket compared to AbbVie Inc.’s (NYSE: ABBV) Humira, one of the leading sellers of all time regardless of indication.

“We are extremely pleased to announce a second therapy in our expanding product pipeline,” said Cannabis Technologies Inc. President and CEO Craig Schneider. “The pain and arthritis therapy takes our company to the next stage of development, reinforcing the proof of concept of our Cannabinoid Drug Design platform. This platform is designed to effectively identify and fast track new drug therapies.”

Cannabinoid Platform Technology

Cannabis Technologies’ proprietary Cannabinoid Drug Design Platform leverages the power of bioinformatics to identify individual compounds from the cannabis plant that can be targeted to develop therapies for specific diseases and conditions. While traditional drug development can take years, management aims to utilize the platform to dramatically reduce discovery time and accelerate development.

In addition to CTI-091, the company also leveraged the platform to fast track the development of CTI-085 for the treatment of glaucoma. The firm’s preclinical studies have shown that cannabinoids have the ability to lower intraocular pressure (“IOP”) in animal and could have therapeutic potential in the treatment of glaucoma, without many of the systemic side effects associated with other therapies.

ACADIA Pharmaceuticals Inc.’s (NASDAQ: ACAD) partnership with Allergan Inc. (NYSE: AGN) to develop Muscarinic for the treatment of glaucoma demonstrates the strong demand for a safe and viable treatment within the ~$5 billion per year industry. Many existing treatment options for glaucoma – particularly in the late stages – carry significant side effects for the patient.

Over the next twelve months, the company plans to announce numerous additional therapies focusing on areas like metabolic disease, orphan diseases and angiogenesis as it relates to cancer. These indications address markets worth many billions of dollars per year and capturing just a fraction of one of the markets could unlock significant value for the ~$11 million micro-cap company.

Pre-commercialization partnerships could unlock incremental value as the company’s drug development programs progress, too. While the cannabis industry is somewhat controversial, many large pharmaceutical companies are not opposed to partnerships. A great example is GW Pharmaceuticals’ partnership with the $100 billion Bayer AG (OTC: BAYRY) for its cannabinoid-based Sativex.

Investors in the pharmaceutical industry may want to pay closer attention to Cannabis Technologies’ – the “junior GW” – given its innovative platform technology and growing pipeline of therapeutics gearing up for Phase I clinical trials.

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