This Technology Could Create Cheaper Marijuana Drugs

Luckily, Amyris was able to successfully scale production in engineered yeast before bowing out to Sanofi , which is distributing the artemisinin-based therapies under a "no profit, no loss" principle to ensure supply is available for the world's poorest. The pharmaceutical giant aims to produce up to one-third of global demand from a single manufacturing facility within the next few years.

The proven commercial success of artemisinic acid provides a good basis for Hyasynth's technology strategy. While still in the early stages of development, the synthetic biology-driven platform could make cannabinoid-based medicines widely accessible for a range of potential ailments. It could also circumvent the intellectual property of drugs currently on the market or in the pipeline.

Threat or just another player?

Cannabinoid-based medicine is quickly becoming a crowded and competitive market. For instance, AbbVie sells the THC-containing drug Marinol, which treats nausea caused by chemotherapy and extreme weight loss caused by AIDS. It fetched over $100 million in annual sales before generic competition moved in to steal market share. Sales fell to $40 million per year the last time investors were updated on its progress in 2008.

Marinol contains a chemically synthesized version of THC, which is likely cheaper to produce than competitors made with pharming. However, the drug has been prescribed since the 1980's, which gives several companies hope that new formulations of cannabinoid combinations may be able to compete in efficacy and dosing for similar applications.

Meanwhile, GW Pharmaceuticals has gone all-in on cannabinoid compounds and has created a world-class Cannabis breeding platform capable of fine-tuning production of various cannabinoids, as depicted in the simplified metabolic pathway chart below.

GW Pharmaceuticals

The company is currently evaluating THC- and CBD-containing Sativex in three phase 3 trials in the United States for treating cancer pain and spasticity from multiple sclerosis, although the drug is already approved in over two dozen countries. Two of the phase 3 trials are identical, with the first having failed to meet its primary endpoint in early January. The second will report results in the second quarter, while the third study, consisting of a more complex design, will announce its findings in late 2015.

Looking beyond Sativex, GW Pharmaceuticals is evaluating five additional cannabinoid compounds in clinical trials worldwide for treating type 2 diabetes, pediatric epilepsy, and more. News that four new phase 3 trials for the company's second leading drug, Epidiolex (the cannabinoid CBD), would commence in early 2015 for two orphan diseases, as well as a phase 2 trial for epilepsy, offset news that Sativex missed in its first phase 3 trial. It also shows the investor enthusiasm surrounding cannabinoid-based medicines.

So will Hyasynth's novel microbial manufacturing technology become a real threat to leaders such as GW Pharmaceuticals? That's certainly a possibility, but given the lengthy timelines of clinical trials, it may make more sense for the company to become a supplier of cannabinoids for medical research and potential treatments rather than a direct competitor. There are over 100 additional cannabinoid compounds found in Cannabis plants that have yet to be fully characterized. Isolating each from plants could take years -- after all, GW Pharmaceuticals has spent tens of millions of dollars and discovered just eight molecules with therapeutic potential.

It would be significantly easier to manipulate genetic pathways in microbes than in plants (breeding), which could produce batches of target molecules in days, not months. That could potentially allow Hyasynth to become the perfect partner to the growing field while playing the role of supplier rather than competitor. For now, however, the technology platform remains years away.

What does it mean for investors?

Patients, investors, and pharmaceutical companies are excited about the big potential of medical marijuana and cannabinoid-based medicines, but pharming remains a limiting factor in its widespread use. Unlike chemical manufacturing, innovations in pharmaceutical manufacturing are bound by lengthy clinical trials that can span a decade or more. That alone could push Hyasynth to pursue a business model focused on supplying pharmaceutical companies and research centers with cheap, pure cannabinoids rather than competing directly in clinical trials. That's good news for GW Pharmaceuticals and others betting their future on marijuana-inspired medicines.

While intriguing and, in my mind, capable of being the future of pharmaceutical and industrial manufacturing, a synthetic biology platform capable of producing cannabinoid compounds remains at least a few years away. Related successes in replicating plant metabolisms in microbes does show its potential for success -- and serves as a reminder that innovation can bring more than incremental changes to industries.

Warren Buffett: This new technology is a "real threat"

At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. Buffett's fear can be your gain. Only a few investors are embracing this new market, which experts say will be worth over $2 trillion . Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a free investor alert on the company we're calling the brains behind the technology.

The article This Technology Could Create Cheaper Marijuana Drugs originally appeared on

Maxx Chatsko owns shares of Amyris. Check out his personal portfolio , CAPS page , previous writing for The Motley Fool, and follow him on Twitter to keep up with developments in the synthetic biology field.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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