MGC Pharmaceuticals | 22 October 2018
US approval a potential long-term opportunity
The company’s near-term strategy does not include plans to seek regulatory approval in the US
market as it focuses its resources on the European development programme. However, if the
efficacy of CannEpil in the planned trials in children and young adults with refractory epilepsy is in
line with expectations, we see a potential opportunity to subsequently commence a development
programme to support an application for approval in the US. We do not expect the company to
make any plans to seek approval in the US until it has evaluated CannEpil in a Phase III trial in
Europe. We do not currently include any sales in the US in our model, so this represents a potential
upside opportunity.
Regulatory changes create opportunities in medicinal cannabis
As cannabis is considered to be an illicit drug in most jurisdictions, its medical use is highly
regulated. However, following recent changes, regulations in Australia and all countries in the EU
now permit clinical treatment with cannabinoids and other medicinal cannabis products under
defined conditions. In some jurisdictions, this is limited to products that contain CBD but not THC,
or allow only low levels of THC in the products.
Countries with more liberal regulations that allow doctors to prescribe medical cannabis products
containing higher levels of THC include Germany, Italy, Switzerland, the Netherlands, Croatia, the
Czech Republic, Macedonia and Greece.
However, despite the relaxation of some restrictions, the growth and processing of cannabis
products remains tightly regulated to reduce the risk that products may be diverted to the illicit drug
market or for recreational use. For example, the growth of cannabis in Slovenia is regulated under
the Production of and Trade in Illicit Drugs Act (referred to as the ZPPPD act). MGC will require a
licence from the governments of Slovenia and the Czech Republic to export the cannabis products
that it produces.
In addition to the regulations that apply specifically to cannabis products, the company will face the
typical regulatory challenges of gaining pharmaceutical drug approval and GMP certification (which
it has already obtained for its Slovenian facility). However, if MGC can successfully negotiate the
regulatory hurdles to produce and sell pharmaceutical-grade cannabis products, these same
regulations would become barriers to entry that may limit the number of competitors that it faces in
the marketplace.
Targeting development of CannEpil as a registered
pharmaceutical for drug-resistant epilepsy
MGC intends to seek regulatory approval for CannEpil as a treatment for severe, refractory epilepsy
in Europe and Australia. Epilepsy is a common and devastating neurological disorder characterised
by repeated unprovoked seizures. Antiseizure drugs are routinely used to control seizures, but
about one-third of epilepsy patients are drug-resistant and continue to suffer from uncontrolled
seizures despite pharmacotherapy.
Commonly used anti-epileptic drugs include clobazam,
valproic acid, levetiracetam, lamotrigine and rufinamide.
The company’s expectation that CannEpil will be effective at reducing seizure frequency in
refractory epilepsy is supported by the fact that GW Pharmaceuticals has already demonstrated in
well-controlled clinical studies that Epidiolex, a highly purified plant-derived CBD extract, is effective
at reducing seizures in treatment-resistant patients with the severe epilepsy disorders Dravet
Tang et al 2017. Drug-Resistant Epilepsy: Multiple Hypotheses, Few Answers. Front. Neurol. 8:301. doi: