Alternative healthcare provider Emerald Clinics (ASX: EMD) is set to make its ASX debut next month and aims to shake up the medical world with its unique cannabinoid data platform.
The company operates a network of clinics across Australia specialising in medical cannabis treatments and captures anonymous, high-quality real world data from its patients, which it claims has significant value and is in demand from licenced producers, regulators, insurers and prescribers.
Emerald is seeking to raise at least $6 million and up to $8 million through the issue of 30-40 million shares at $0.20 each. This offer indicates a market capitalisation of about $37-39 million upon completion.
Bids are expected to close at the end of this week with Emerald set to begin trading on the ASX in early February under ticker code EMD.
Real world evidence vs clinical trial evidence
Real world evidence is broadly defined as evidence from data collected outside of the clinical trial environment, encompassing more of the variability of the real world, to help evaluate the potential benefits or risks of a medical product.
Emerald managing director and chief executive officer Dr Michael Winlo told Small Caps the acceptance of real world evidence is gaining significant momentum in jurisdictions through Europe and North America with substantial investment being made by big pharma.
He said the problem with formal clinical trials, besides the cost, is the rigidity of rules, which can result in outcomes from “Goldilocks” patients that don’t present like the rest of the population.
“That lessens the generalisability of those outcomes to patients sitting across from doctors, with all of their variability and other conditions, and different social circumstances,” Dr Winlo said.
He said regulators are now beginning to realise they need to hold real world data and evidence in higher regard when it comes to making approval decisions.
“There is a lot of clinical apprehension amongst regulators, payers and clinicians behind the use of medicinal cannabis, specifically, and so the only way to address that is to compile robust, clinical evidence that supports any claims of benefits that these products [provide],” Dr Winlo said.
He said once some of this clinical apprehension is removed through “better, high-quality, product-specific evidence”, patients will have a better chance of gaining access to the right products.
“Like anything, it’s not a panacea [cure-all]. It will have side effects, it will have responders and non-responders, there will be drug interactions and other things to be wary of. Answering those questions is part of our mission,” Dr Winlo said.
Investing in data
Emerald has closed multiple anonymous patient data deals with customers including Spectrum Therapeutics, the medical division of the world’s largest cannabis company Canopy Growth.
Dr Winlo said these closed deals help to validate the company’s business model and deals are expected to “grow in value and scale in the coming months”.
“One of the reasons we wanted to IPO soon is that we recognise the market of medicinal cannabis was hurting because of its inability to penetrate mainstream medicine. We saw that reflected in the stock prices, in the dips of the last few months.”
“We also want to move ahead with some things that are in the pipeline, so we want to get going as quick as we can so we can put those into action,” Dr Winlo added.
He said Emerald planned to use the IPO funds to expand its clinics and grow patient numbers with additional clinics being considered across Australia and the UK.
The company also plans to boost investment in its data platform.
“Part of that will be our own clinical trials, that we will run and sponsor ourselves, to evaluate certain patient populations in more detail and therefore, enrich what we’re collecting about our patients,” he said.
The third purpose of the IPO funds will involve the clinics’ general running costs.
A wealth of expertise
Emerald is strengthened by a board and management team with experience across clinical medicine, clinical trials, data science, digital health, medicinal cannabis and the requirements of an ASX-listed company.
Dr Winlo noted the experience of Emerald non-executive director Matthew Callahan, who has taken four drugs including pain medication through the FDA approval pathway, and Sir John Tooke, who is expected to join the board as a non-executive director upon listing.
“Sir John Tooke was knighted in England for services to medicine; he was previously chair of the Academy of Medical Science; he is very well connected with the highest levels of government in the UK; he was an advisor to [artificial intelligence company] Google DeepMind and was also a previous director to the board of Bupa International, a major payer,” Dr Winlo said.
“He’s really attracted to our approach of evidence-generating care because his personal interest is in learning health systems.”
“That’s a movement that I think we will see grow in interest in the coming years – that is, [finding out] how we learn from patients better,” Dr Winlo said.