Medical solutions company OBJ Limited (ASX: OBJ) is teaming up with Australian medicinal cannabis producer Little Green Pharma to explore using OBJ’s transdermal (patch) technology to deliver cannabinoid therapy.
Describing the deal as a “landmark collaboration”, OBJ said a signed term sheet for a funding and option agreement will see the two companies work together along with research and development experts at Curtin University in Western Australia.
The agreement also includes proposed joint funding of the R&D activities with a view to establish a formal 50:50 joint venture for the ownership and commercialisation of cannabis and transdermal technologies in the event of successful trials.
Operating a cultivation facility in Western Australia, Little Green Pharma is the first Australian medicinal cannabis company to produce locally grown and GMP-manufactured cannabis products for patients.
OBJ founder and managing director Jeffrey Edwards said the company was “thrilled” to work alongside this well-established company.
“Backed by R&D efforts from Curtin University, this opportunity holds significant potential for all parties involved and could well represent a unique Western Australian solution to be utilised in one of the biggest growth markets in the world today,” he said.
In a supplementary announcement, OBJ told the market the term sheet represents the proposed indicative basis upon which the parties propose to negotiate a fully termed funding and option agreement.
Neither company will be legally bound until they have entered a fully termed agreement outlining acceptable financial contributions, OBJ stated.
A new frontier
OBJ said the deal was a “unique strategic opportunity” given the global legal cannabis market is forecast to reach $232 billion by 2027.
“This is an excellent opportunity for OBJ given the momentum we’ve witnessed in medicinal cannabis as a therapeutic in Australia, but more significantly in North America and Europe,” Mr Edwards said.
Current and emerging cannabinoid-based treatments include vaping, tablets, capsules, chewing gums, oil and non-diamagnetic patches. However, many of these are limited in their ability to deliver an accurate dose and not be impacted by first pass metabolism in the case of anything is ingested or inhaled, the company said.
If the Curtin University trials are successful in demonstrating that cannabinoids can effectively use OBJ’s technology, the company said this could result in “one of the most advanced and effective medical cannabis delivery systems developed in the world to date”.
In addition, the joint venture could rapidly develop its own products as well as licence the technology to third parties for worldwide distribution.
Little Green Pharma managing director Fleta Solomon said this could be a “new frontier for medicinal cannabis”.
“The benefits of medicinal cannabis are well known and increasing, therefore combining this with the experts in transdermal technology at OBJ has the potential to create some exciting possibilities,” she said.
According to OBJ, transdermal patches target concentrated delivery of a drug by a more effective penetration through the skin.
The patches are designed to release cannabinoids slowly over a number of hours. This means the medicinal effects are expected to last longer than other methods of consumption, where effects can peak quickly but then taper off, requiring frequent dosage.
The patches use OBJ’s patent-protected diamagnetic microarray technology, which has already been sold in more than a million skincare products under a deal with consumer goods firm Proctor & Gamble.
By early afternoon trade, OBJ shares were up 14.29% to $0.016.