Althea (ASX: AGH) is set to become one of the first medicinal cannabis companies to enter the United Kingdom after announcing the acquisition of subsidiary Althea UK.
The purchase, of which the value was not disclosed, will enable Althea to extend its patient acquisition model into the UK which has an estimated 2.9 million treatable patients.
Althea’s push into the UK will be supported by a product acquisition agreement with Canadian giant Aphira, currently one of the largest cannabis companies globally.
Althea expects to start supplying eligible UK-based patients with its medicinal cannabis products from next month.
Althea chief executive officer Joshua Fegan said UK’s medicinal cannabis market was not too dissimilar to Australia’s.
“The UK’s highly regulated framework for prescribing, supplying and possessing medicinal cannabis products is very similar to that of Australia,” he said.
“We know focusing on improving patient access to medicinal cannabis and educating medical practitioners on treatment is the key to establishing market share, so the UK market entry will be based on our three-phased business model successfully implemented in Australia.”
Althea has appointed a “highly respected UK pharmaceutical physician” to lead the new venture and will inject $2.5 million to fund the first year of operations.
Althea capitalises on law change
As a result of the acquisition, Althea will emerge as one of the first companies to enter the UK medicinal cannabis market following the 1 November 2018 legislative change.
Relaxation of the country’s cannabis laws means cannabis-based medicinal products can now be prescribed by doctors.
Prior to the ruling change, most cannabis-based medicinal products were deemed Schedule One drugs.
Aphria President Jakob Ripshtein said the company was proud to be one of the first licensed producers to support patients in the UK with access to high-quality medicinal cannabis products following the legislation change.
Leveraging its Australian IP
Althea UK will initially be supplied with Aphria manufactured medicinal cannabis products until Althea’s Australian production facility is operational, which is projected for 2020.
The company’s UK sales strategy will be centred around leveraging IP from its Australian operations, with a focus on growing one-on-one patient and medical practitioner relationships through a team of medical science liaisons supported by the digital concierge platform.
The concierge medical education technology platform provides comprehensive medical education for healthcare professionals, including clinical evidence.
“The platform will streamline the registration process and facilitate patient referrals from primary care doctors to Althea UK specialist prescribers,” Mr Fegan said.
Melbourne-based Althea, which burst onto the ASX last September, has already become a major supplier of medical cannabis products in Australia.
Since entering the Australian market in May 2018, 93 registered healthcare professionals are now prescribing Althea medicinal cannabis products to more than 328 patients across Australia.
During October alone, the company hit the 100-patient milestone, underpinned by improvements in patient access to medicinal cannabis products
Althea’s shares were trading 7.4% higher to $0.36 in afternoon trade.