Impression Healthcare (ASX: IHL) has tweaked its internal structure by appointing Dr Sud Agarwal, a leading figure in the medicinal cannabis industry as its chief medical officer and non-executive director.
The newly appointed executive is considered to be “one of the most influential people in the medicinal cannabis sector”, as evidenced by being a recent keynote speaker with Cannvalate at the World Cannabis Congress held in New Brunswick, Canada, and serving as an advisor to multiple public and private sector organisations on medicinal cannabis.
Dr Agarwal’s background and expertise are therefore expected to be an instrumental piece of the puzzle for Impression as the company seeks to advance a number of commercially viable products spanning across multiple healthcare niches.
Cannvalate has been working with Impression for a number of months supporting them with their pivot towards medicinal cannabis, the companies are currently developing four unique medicinal cannabis products that are being clinically validated through Cannvalate’s Medicinal Cannabis Research Collaboration – in addition to progressing its oral devices manufacturing business.
Dr Sud Agarwal experience
Dr Agarwal is internationally recognised as a key opinion leader in the clinical use of cannabis medicines and has joined Impression after Cannvalate secured a significant shareholding in the company.
Dr Agarwal will continue to serve as a chief executive officer at Cannvalate, one of Australia’s leading medicinal cannabis companies operating in Oceania and soon launching a UK business unit.
Under his tenure, Cannvalate has also become Australia’s largest network of medicinal cannabis prescribing doctors and represents around 40% of the total prescribing market.
As a further synchronicity, Dr Agarwal’s company Cannvalate is already working with Impression after signing a deal in March to both distribute cannabinoid (CBD) medicines and to undertake four clinical trials, including a “first of its kind” study on the effects of CBD oil on traumatic brain injury.
Cannvalate has proudly launched the largest cannabinoid research institute in the Southern Hemisphere with six trials currently underway via their Medicinal Cannabis Research Collaboration with Swinburne University of Technology.
Dr Agarwal’s extensive experience in the sector is further bolstered by his previous spell as medical director at Cann Group – currently one of Australia’s fastest-growing medicinal cannabis developers making headway towards establishing commercial operations in both Australia and Canada.
Cann Group was Australia’s first company to secure the necessary licences and permits to cultivate and research cannabis for human medicinal purposes.
As a result of its early-mover impetus, it was able to claim the mantle of being the first Australian company to harvest a medicinal cannabis crop with more than two dozen successful harvests completed to date.
According to Impression, Dr Agarwal will lead a formal Medical Advisory Board relevant to current and future clinical trial programs, produce commercialisation strategies, assist with furthering defendable intellectual property issues and create various investor and stakeholder materials.
As part of the deal that will see him join Impression, Dr Agarwal will be eligible to receive a total 6 million milestone performance rights that will convert to shares upon the achievement of a total of “46 specified milestones”.
In an additional remuneration incentive, Dr Agarwal and other appointees will be collectively issued 200 million “chief medical officer options” exercisable at $0.20 per share before September 2021.
“We are delighted that Dr Agarwal has joined our team as an expert and early-mover in the medicinal cannabis field. His appointment is game-changing to the rapid commercialisation of key proprietary drugs being developed by Impression,” said Impression managing director and chief executive officer Joel Latham.
“His experience and knowledge are second-to-none and will help to perfect our strategy in the cannabis field whilst also opening the company to global opportunities in this rapidly advancing sector,” Mr Latham said.
One of the very first tasks on the agenda will be to lead Impression’s medical advisory board and implement his extensive industry expertise to improve Impression’s clinical programs for sleep apnoea, concussion, gum disease and TMJ disorder.
“His strong ability to access patient groups will also support our strategy to bring Impression products to market,” said Mr Latham.
As part of a broader reshuffle, Impression chief executive officer Joel Latham is being elevated to the position of managing director while Alistair Blake will step down from Impression’s board.
According to Impression, Mr Blakes’s departure is “aligned with increasing offshore manufacturing of oral devices at the facilities in China” but will remain in his role as chief technical officer to assist in the transition to “majority offshore manufacturing”.
ASX and TSX synergies
One of the most commercially intriguing developments that is likely to be of interest to both investors, market analysts and consumers will be Dr Agarwal’s role in aiding Impression to make international headway.
As a potential hint of what’s to come, Dr Agarwal penned a thought-leadership article earlier this month titled ‘Australia is the next Canada: 5 reasons why Australia is the world’s next largest medicinal cannabis market’.
In the article, Dr Agarwal cited similar demographics, cultural values, geography, economies, health care systems and “similar attitudes towards health and well-being” as being the core reasons why Australia and Canada are two peas in a pod when it comes to developing and marketing cannabis products.
In early 2015, there were just under 24,000 registered cannabis users in Canada. But, after a swift legislative change that swept cannabis from government dungeons and onto store shelves, Canada has amassed a whopping 340,000 registered users by Q3 2018 – an increase of 1,317% in under three years.
In 2018, Canada became the second country after Uruguay to legalise cannabis for recreational use and is continuing to set the pace for other countries seeking to decriminalise and legalise cannabis use.
As a Commonwealth cousin, Australia wants to make rapid progress in emulating Canada’s trailblazing developmental path. Both countries also have a high baseline of existing cannabis users with around 12% of Australians reporting cannabis use over the past year, despite its designation as an illicit drug nationwide.
However, times are changing with medicinal cannabis now legalised in Australia and recreational cannabis legalisation also a potential eventuality in the foreseeable future – in the same vein as Canada and multiple states in the US.
According to Dr Agarwal, the Australian black market for recreational cannabis is worth around A$4.5 billion per year while in Canada, 4.6 million people (around 15% of the adult population) reported using cannabis in the past three months.
“With Australia legalising medicinal cannabis in 2016, many members of the industry look to Canada as a model for how the sector might develop in the near future. The growth trajectory of medicinal cannabis users that we’ve seen so far in Australia is very similar to what was seen in Canada in the early days of commercial legalisation,” said Dr Agarwal.