Shares of Canadian company, Tilray, Inc . TLRY soared 38.1% after the company announced that the U.S. Drug Enforcement Administration (DEA) has approved an import pharmaceutical-grade medical cannabis product produced by Tilray in the United States for a clinical trial focused on a neurological movement disorder, Essential Tremor (ET).
The drug will be imported from Canada for a clinical trial to be conducted at the University of California San Diego (UC San Diego) Center for Medicinal Cannabis Research (CMCR) to examine its safety, tolerability and efficacy for ET.
The company is providing a cannabinoid formulation for the trial in capsule form. This will enable researchers to test an investigational drug product containing two active ingredients extracted from the cannabis plant, cannabidiol (CBD) and tetrahydrocannabinol (THC). The study is expected to commence early 2019 with financial support from Tilray and the International Essential Tremor Foundation.
Tilray produces medical cannabis in Canada and Europe. In July 2018, Tilray completed its IPO, selling 10,350,000 shares of Class 2 common stock at a price of $17 per share (C$22.45 per share). The company received net proceeds of $163.6 million after deducting the underwriting discount.
Tilray's shares have gained 856.1% after it went public in July 2018 against the industry 's gain of 4%. The stock got a boost when CEO Brendan Kennedy showed optimism in a show with CNBC. He reportedly stated that pharmaceutical companies have to start thinking about partnering with cannabis companies as a "hedge" against the burgeoning marijuana industry. Per the CEO, cannabis is a substitute for prescription painkillers and prescription opioids. Hence, an investor in a pharmaceutical company or a pharmaceutical company itself will have to hedge the offset from cannabis substitution.
In March 2018, Tilray collaborated with Sandoz Canada Inc., an affiliate of Sandoz International GmbH, the generic division of Novartis Group NVS .
Tilray currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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