Medical cannabis company AusCann Group (ASX: AC8) has taken an assertive step into expanding its production business by acquiring a 7,300-square-metre research and development facility in Perth, Western Australia.
AusCann says the newly-acquired facility will be used to progress its cannabinoid pharmaceutical product pipeline including the impending production of hard-shell cannabinoid capsules set to take commence later this year.
Furthermore, the facility will support the development of both innovative formulations and dose forms of various cannabinoids.
The ASX-listed medical cannabis company has confirmed that it will seek to obtain additional licences to cover the new site while meeting all regulatory requirements.
The acquisition and upgrade costs will be fully funded from AusCann’s existing cash pile, which was in excess of $40 million prior to the acquisition.
Facilitating cannabinoid production
Today’s news completes AusCann’s plan which was first announced in November last year and serves as a key component of a broader “strategic move” for the company to complete its long-term development plans.
The research and development facility was purchased for $5.25 million, with a further capital investment of up to $6 million set aside to customise and fit out the site to purpose. Given its current development schedule, AusCann says the facility is expected to be “ready for use” later this year.
The facility is meant to ensure AusCann’s research and development activities will end up producing high-quality products underpinned by rigorous data on stability and effectiveness, but not just that, AusCann wants to lower its production costs to ensure patients can obtain potent products at affordable prices.
According to a statement to the market, AusCann said it has made a commitment to conduct a pharmaceutical development program that constitutes a key step to meeting its commitment to patients and places it at the “forefront of the Australian medical cannabis industry”.
The company added that it is committed to “patient-centered innovation” with the goals of improving both health outcomes and building company value with its Perth development site being a key component to achieving these goals.
“The acquisition of the research and development site is a major stepping stone for AusCann as it allows the creation of a fully integrated, state of the art facility for medicinal cannabis,” said Dr Paul MacLeman, executive director and interim chief executive officer of AusCann.
“Our key point of difference compared to other cannabis producers is our commitment to a rigorous pharmaceutical development program, which will now be strengthened through the establishment of our own facility to support further research and development towards bringing new products to market.”
“2019 will be a major year for AusCann with the planned launch of our hard-shell cannabinoid capsules which addresses the need for stability and consistency of dose. Our partner PCI Pharma is manufacturing the first product line as we aim to commence the production of our capsules towards the middle of this year,” Dr MacLeman said.