Item 1A. Risk Factors 51
Item 1B. Unresolved Staff Comments 88
Item 2. Properties 88
Item 3. Legal Proceedings 88
Item 4. Mine Safety Disclosures 88
Item 6. Selected Financial Data 89
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 101
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 102
Item 9B. Other Information 103
Item 10. Directors, Executive Officers and Corporate Governance 104
Item 11. Executive Compensation 104
Item 14. Principal Accounting Fees and Services 104
Item 15. Exhibits and Financial Statement Schedules 105
i
PART I
Special Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K, including
the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”, contains forward-looking statements that involve risks and uncertainties. We make such forward-looking
statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities
laws. All statements, other than statements of historical facts contained herein, regarding our strategy, future operations, future financial
position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements.
We may, in some cases, use words such as “anticipate”, “believe”, “could”, “estimate”,
“expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”,
“would”, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements.
Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking
statements in this Annual Report on Form 10-K include, but are not limited to, statements about:
● The structure of future INM-755 studies;
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● Our ability to develop our therapies through early human testing;
2
● Our continuing investment in each of our non-core asset programs;
● Our ability to initiate discussions with potential partners;
● Our ability to execute our business strategy;
● Critical accounting estimates;
● Management’s assessment of future plans and operations;
● The competitive environment in which we and our business units operate; and
● Our ability to declare dividends.
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Any forward-looking statements in this
Annual Report on Form 10-K reflect our management’s beliefs and views with respect to future events and are based on estimates and
assumptions as of the date of this 10-K and are subject to risks and uncertainties. We discuss many of these risks in greater detail under
“Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to
time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You should read this Annual Report on
Form 10-K and the documents that we reference in this Form 10-K and have filed as exhibits, completely and with the understanding that
our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Annual
Report on Form 10-K by these cautionary statements. Except as required by law, each forward-looking statement speaks only as of the date
of the particular statement, and we undertake no obligation to publicly update any forward-looking statements, whether as a result of
new information, future events or otherwise.
As used in this Annual Report on Form
10-K, unless otherwise stated or the context otherwise indicates, references to “InMed,” the “Company,” “we,”
“our,” “us” or similar terms refer to InMed Pharmaceuticals Inc., and our wholly owned subsidiaries.
ITEM
1. BUSINESS
Overview
We are a clinical stage pharmaceutical
company developing a pipeline of prescription-based products targeting treatments for diseases with high unmet medical needs as well as
developing proprietary manufacturing technologies.
We are developing an integrated
biosynthesis-based manufacturing approach, called IntegraSynTM, for synthesizing pharmaceutical-grade cannabinoids, for potential
use in product candidates. We are dedicated to delivering new therapeutic alternatives to patients who may benefit from cannabinoid-based
medicines. Our approach leverages on the several thousand years’ history of health benefits attributed to the Cannabis plant and
brings this anecdotal information into the 21st century by applying tried, tested and true pharmaceutical drug development discipline
and a scientific approach to establish non-plant-derived (synthetically manufactured), individual cannabinoid compounds as clinically
proven, FDA-approved medicines. While our activities do not involve direct use of Cannabis nor extracts from the plant, we note that the
U.S. Food and Drug Administration (“FDA”) has, to date, not approved any marketing application for Cannabis for the treatment
of any disease or condition and has approved only one Cannabis-derived and three Cannabis-related drug products. Our APIs, which are the
ingredients that give medicines their effects, are synthetically made and, therefore, we have no interaction with the Cannabis plant.
We do not grow nor utilize Cannabis nor its extracts in any of our products; our products are applied topically (not inhaled nor ingested);
and, we do not utilize THC or CBD, the most common cannabinoid compounds that are typically extracted from the Cannabis plant, in any
of our products. The API under development for our initial two drug candidates, INM-755 for EB and INM-088 for glaucoma, is CBN. Additional
uses of both INM-755 and INM-088 are being explored, as well as the application of additional rare cannabinoids to treat diseases.
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We believe we are positioned to develop multiple
product candidates in diseases which may benefit from medicines based on rare cannabinoid compounds. Most currently approved cannabinoid
therapies are based specifically on CBD and/or THC and are often delivered orally, which has limitations and drawbacks, such as side effects
(including the psychoactive effects of THC). Currently, we intend to deliver our rare cannabinoid pharmaceuticals through various topical
formulations (cream for dermatology, eye drops for ocular diseases) as a way of enabling treatment of the specific disease at the site
of disease while seeking to minimize systemic exposure and any related unwanted systemic side effects, including any drug-drug interactions
and any metabolism of the active pharmaceutical ingredient by the liver. THC and CBD can be obtained either from plant extraction or chemically
synthesized. We plan to access rare cannabinoids via all non-extraction approaches, including our IntegraSynTM approach, thus
negating any interaction with or exposure to the Cannabis plant.
On June 29, 2021, we announced
that we entered into a non-binding Letter of Intent to acquire BayMedica Inc., a private company based in Nevada and
California that specializes in the manufacture and commercialization of rare cannabinoids. On September 10, 2021, we entered into a definitive
agreement to acquire BayMedica. Closing of the transaction is subject to certain standard closing conditions. See “Business – Recent Development – Definitive
Agreement to acquire BayMedica, Inc.”
Corporate Information
We were originally incorporated
in the Province of British Columbia, under the BCBCA, on May 19, 1981 with the name “Kadrey Energy Corporation”. We have undergone
a number of corporate name and business sector changes since its incorporation, ultimately changing its name to “InMed Pharmaceuticals
Inc.” on October 6, 2014 to signify our intent to specialize in cannabinoid pharmaceutical product development. Our internet address
is https://www.inmedpharma.com/.
Employees and Human Capital
Our management team is comprised
of highly experienced pharmaceutical and biotechnology executives with successful track records in researching, developing, gaining approval
for and commercializing novel medicines to treat serious diseases. Each member of our management team has over 20 to 30 years of industry
experience, including our CEO, CFO, and (Sr.) Vice Presidents of Clinical and Regulatory Affairs, of Preclinical Research and Development,
and of Chemistry, Manufacturing and Controls. Together, this team has covered the spectrum of pharmaceutical drug discovery, preclinical
research, formulation development, manufacturing, human clinical trials, regulatory submissions and approval, and global commercialization.
Additionally, the team has significant experience in company formation, capital raises, mergers/acquisitions, business development, and
sales and marketing in the pharmaceutical industry. Our Board is constituted by individuals with significant experience in the pharmaceutical
and biotechnology industries. As of June 30, 2021, including our management team, we had 12 full time employees and no part time employees.
None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage. We believe that
our relations with our employees are good.
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We are committed to growing our
business over the long-term. As a result of the competitive nature of the industry in which we operate, employees have significant career
mobility and as a result, the competition for experienced employees is great. The existence of this competition, and the need for talented
and experienced employees to realize our business objectives, underlies the design and implementation of our compensation programs. At
the same time, the Company seeks to keep its approach to compensation simple and streamlined to reflect the still relatively moderate
size of the Company. We have compensation, leave and benefits programs necessary to attract and retain the talented and experienced employees
necessary to develop our business including competitive salaries, stock options awards to permanent employees, both upon initial hiring
and annually thereafter, and pay annual bonuses to permanent employees based on the achievement of corporate and/or personal objectives.
We have developed an Employee Handbook that contains all corporate policies and guidelines for professional behavior. The Company policies
and practices apply to all employees, regardless of title. These guidelines include our Code of Business Conduct, policies for corporate
disclosure, insider trading and whistle blower.
In response to the COVID-19 pandemic,
commencing in March 2020, we implemented a work from home mandate and ceased all non-essential business travel. In the recent months,
some employees have transitioned back to working on-site in conjunction with the implementation of additional safety and infection prevention
measures including enhanced cleaning, additional personal protective equipment, and contact tracing protocols. We continue to provide
our employees with the option to work from home.
Rationale for Use of CBN in Pharmaceutical Drug Development
CBN is one of several rare
cannabinoids naturally produced in the Cannabis plant, albeit at significantly lower levels relative to the more commonly known
THC and CBD. Despite their common origin, different cannabinoids have been observed to have distinct physiological properties, we are
specifically exploring these unique effects of CBN, as well as other rare cannabinoids, and their therapeutic potential to treat disease.
Rare vs. Major Cannabinoids: Types, Prevalence & Application
Our extensive preclinical testing has identified
several unique properties of CBN that outperformed both THC and CBD in various disease-related assays and models. CBN can act with higher
potency when interacting with some receptor systems in the body, while acting with lower potency for others.
INM-755, our lead product
candidate, is being developed as a topical skin cream formulation containing CBN for the treatment of symptoms related to EB, a rare genetic
skin disease characterized by fragile skin that blisters easily from minimal friction that causes shearing of the skin layers. The blisters
become open wounds that do not heal well.
In addition to relief of
symptoms, inflammation, pain, and others, we believe INM-755 may impact the underlying disease by enhancing skin integrity in a subset
of EB patients. We have completed more than 30 preclinical pharmacology and toxicology studies to investigate the effects of CBN. Several
of these nonclinical studies explored the effect on important symptoms such as pain and inflammation. In in vitro pharmacology
studies, CBN demonstrated activity in reducing markers of inflammation. CBN upregulated expression of a type of keratin called keratin
15, or “K15”, which might lead to skin strengthening and reduced blister formation in EB simplex, or “EBS”, patients
with mutations in another keratin called keratin 14, or “K14”. The anti-inflammatory activity of CBN may be beneficial in
healing chronic wounds caused by prolonged inflammation. Following a review of our toxicology studies, the Netherlands National Competent
Authority and Ethics Committee approved the initiation of a Phase I clinical study in healthy volunteers. We have safety data with INM-755
cream in 22 healthy adult volunteers from our first Phase I study (755-101-HV) in which subjects had the INM-755 cream applied to their
upper backs daily for 14 days. An interim safety analysis of the first 16 subjects was reviewed by the Netherlands National Competent
Authority and Ethics Committee and determined to be adequate to allow initiation of the second Phase I study testing INM-755 cream on
small wounds. That second study has completed and we now have safety data for INM-755 cream applied to small open wounds daily for 14
days in 8 healthy adult volunteers.
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A regulatory application
to support our first Phase I clinical study in healthy volunteers with INM-755 (755-101-HV) was submitted November 4, 2019 and approved
December 6, 2019. The initial Phase I clinical study evaluated the safety, tolerability, and pharmacokinetics of INM-755 cream in healthy
volunteers with normal, intact skin; the volunteers had cream applied once daily for a period of 14 days. All subjects in this first clinical
trial completed treatment and evaluations by March 27, 2020. A regulatory application was approved April 17, 2020, for a second Phase
I clinical study of healthy volunteers to test the local safety and tolerability of applying sterile INM-755 cream to small wounds once
daily for 14 days. As with the initial Phase I trial, the second trial (755-102-HV) was conducted with two different drug concentrations
and a vehicle control. Enrollment began in early July 2020 and the clinical trial completed treatment and evaluations at the end of September
2020. The safety of INM-755 will continue to be assessed throughout its clinical development.
INM-755 cream was well tolerated
in the two Phase I clinical studies in healthy volunteers and the next step will be to study INM-755 cream in patients with EB (Study
755-201-EB). Regulatory applications to support this global trial have been filed and are under review by the National Competent Authorities
and Ethics Committees in Germany, France, Italy, Austria, Israel, Greece and Serbia, with patient enrollment expected to begin in 2H21.
CBN is also the active ingredient
in our second drug candidate, INM-088, which is in preclinical studies as a potential treatment for glaucoma. We are conducting studies
to test INM-088’s ability to provide neuroprotection and reduce intraocular pressure in the eye. We compared several cannabinoids,
including CBD and THC, to determine which cannabinoid was the best drug candidate for the treatment of glaucoma. Of all the cannabinoids
examined in preclinical studies, CBN demonstrated the most optimal neuroprotection effect. Furthermore, CBN also exhibited intraocular
pressure reduction capability. INM-088 is in advanced formulation development.
Current treatments for glaucoma
primarily focus on decreasing fluid build-up in the eye. Our data has shown that INM-088 may provide neuroprotection in addition to modulating
intraocular pressure by improving drainage of fluid in the eye. Thus far, we have conducted numerous preclinical pharmacology studies
to demonstrate these effects.
For all current and future
Product Candidates we intend to submit NDAs (or their international equivalents) in most major jurisdictions, including the U.S.
We are actively establishing
a broad patent portfolio to protect our commercial interests in utilizing CBN and other rare cannabinoids across these and other diseases.
We have also filed multiple patent applications for our integrated, biosynthesis-based manufacturing approach. If granted, these patents
may confer meaningful protection to the commercial potential for these technologies.
Our Strengths
We are the only clinical-stage
company with both multiple cannabinoid drug candidates, in multiple therapeutic categories, that also is developing an integrated biosynthesis-based
manufacturing approach, called IntegraSynTM, to meet the needs of the rapidly evolving pharmaceutical drug needs for rare cannabinoids.
Key strengths include:
Experienced executive team and board of directors with proven track
records.
One key critical success
factor in the field of pharmaceutical drug development is the experience and skill set of the individuals leading the company. We have
been successful in attracting and retaining executive and directors with extensive (20+ years) experience in all facets of the pharmaceutical
industry, including fundamental research and development, drug formulation, clinical trial execution, regulatory approvals, pharmaceutical
commercialization, company and capital formation, business development, legal, and corporate governance. Our leadership team is well-poised
to lead use through all facets of drug development and into regulatory approval and commercialization, either internally or externally
via partnerships. It is this group of individuals that will help optimize our chances for success.
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Innovative IntegraSynTM manufacturing approach.
IntegraSynTM is
our integrated cannabinoid synthesis approach designed to efficiently produce bio-identical, economical, pharmaceutical-grade cannabinoids.
IntegraSyn’sTM scalable and flexible manufacturing approach integrates multiple commercially proven methods to efficiently
produce cannabinoids utilizing cost-effective processes.
Leading experts in the therapeutic potential of the rare cannabinoid
CBN.
We have invested significant
time and effort in understanding characteristics and therapeutic potential of our first rare cannabinoid drug candidate, CBN. As such,
we are positioning ourselves to be a world leader in the pharmaceutical development of this cannabinoid. We anticipate that CBN will be
the first of several such drug candidates.
Targeting medical applications of rare cannabinoids to treat diseases
with high unmet medical needs.
Significant investment in
understanding the therapeutic potential of CBN has provided us with important insight as to how best to develop this class of compounds
for treating various diseases. We intend to apply this know-how across several diseases that may benefit from cannabinoid-based medicines.
Diverse portfolio of patent applications covering a spectrum of
commercial opportunities.
Success in pharmaceutical
markets often rests with the strength of intellectual property, including patents, to protect our commercialization interests. We have
filed several patents on our novel findings and expect to continue to do so.
Our Business Strategy
Our goal is to become a global
leader in the manufacturing and clinical development of rare cannabinoids while continuing to avoid any direct interaction with the Cannabis
plant. Our strategies to accomplish this include:
Advance INM-755 and INM-088 through preclinical
and clinical development, thereby establishing important human proof-of-concept in multiple therapeutic applications.
These activities are well
underway, at various stages, for both INM-755 for diseases of the skin and INM-088 for diseases of the eye. We have the internal capabilities
to design and execute, together with multiple external vendors, the preclinical data sets and clinical studies required to advance pharmaceutical
drugs towards regulatory submission.
Establishing partnerships for our various technologies, at different
stages of development, to expedite their path towards commercialization in a resource-efficient manner.
We do not currently have
an organization for the sales, marketing and distribution of pharmaceutical products. With respect to the commercialization of each Product
Candidate, we may rely on i) a “go-it-alone” commercialization effort; ii) out-licensing to third parties; or iii) co-promotion
agreements with strategic collaborators for of our Product Candidates. To develop the appropriate commercial infrastructure internally,
we would have to invest financial and management resources, some of which would have to be deployed prior to any confirmation our products
will be approved by regulatory authorities. Any decision on a “go-it-alone” commercialization effort versus out-licensing
to third parties will depend on various factors including, but not limited to, the complexity, the expertise required and related cost
of building any such infrastructure for our Product Candidates. For INM-755 in EB, it is conceivable that we could oversee the clinical
trials, given the relatively small patient sizes expected for such trials, and build the requisite internal commercialization infrastructure
to self-market the product to EB clinics, which are limited in number and provide direct access to the vast majority of EB patients. For
INM-088 in glaucoma, because of the potentially large clinical trial patient enrollees (possibly several thousand) and the extensive sales
effort required to reach the many thousand prescribing physicians, we may consider exploring partnership opportunities early in the development
process.
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Develop a cost-efficient manufacturing source
for high quality rare cannabinoids as API for our core internal drug candidate pipeline, for licensing opportunities of non-core drug
candidates, as well as a potential source for cannabinoids in the non-pharmaceutical space.
Extraction of rare cannabinoids
from the plant is economically impractical for commercial applications. Modern approaches to product manufacturing, including chemical
synthesis and biosynthesis, may be appropriate in individual situations depending on the targeted cannabinoid, the quantity that is desired
as well as the requisite quality specification for the intended market segment (consumer vs. pharmaceuticals). We are developing an integrative
cannabinoid synthesis approach designed to produce bio-identical, economical, pharmaceutical-grade cannabinoids in a cost-efficient manner,
called IntegraSynTM, that may bring incremental benefits over the traditional chemical synthesis and biosynthesis approaches.
The cannabinoids that will be produced from IntegraSynTM are targeted to be bio-identical to the naturally occurring cannabinoids.
Our manufacturing approach is designed to offer superior yield, control, consistency and quality of rare cannabinoids when compared to
alternative methods. IntegraSynTM may address the increasing pharmaceutical and other commercial demands for competitively-price
cannabinoids while providing access to rare cannabinoids that are otherwise impractical to extract from the plant.
Continue to explore the potential of a wide
array of rare cannabinoids and their analogs/variants to treat diseases based on our significant history in cannabinoid research and lead
drug candidate identification.
Individual cannabinoids affect
a range of different receptors in the human body, including, but not limited to, known endocannabinoid receptors. As such, they are responsible
for a wide variety of pharmacological effects. However, due to the limited research into these varying effects, a full understanding of
the role of each cannabinoid compound remains elusive. As a company, we have been formally investigating the utility of cannabinoids in
treating disease for over 5 years.
We have numerous options
for commercializing our various technologies. At the core of our activities, we are a drug development company focused on commercializing
important cannabinoid-based medicines to treat diseases with high unmet medical needs.
Cannabinoid Science Overview
Cannabinoids are a class
of compounds that exist throughout nature and can be found in significant numbers and varying quantities in the Cannabis plant.
The two predominant, or major, cannabinoids in the Cannabis plant are THC and CBD. These two exist in relatively large quantities
in the plant and can be easily extracted, which has led to significant research into these two compounds over the previous several decades.
Nevertheless, there are over 100 additional cannabinoid compounds found in the plant, referred to as minor or rare cannabinoids. Each
cannabinoid has one or more specific chemical differences that may confer unique physiological properties in humans.
Cannabinoid receptors are
found throughout the body and are involved in many different functions, such as pain perception, memory, immune function and sleep. Cannabinoids
act as messengers that bind to cannabinoid receptors, as well as other receptors, signaling the endocannabinoid system into action. The
relevance of the endocannabinoid system on many important physiological processes has made cannabinoids an important target to potentially
treat a number of diseases and symptoms.
9
Two cannabinoid receptors
in the human body are the endocannabinoid receptor 1 (CB1), which is more significant to the central nervous system, and endocannabinoid
receptor 2 (CB2), which is more common with the immune system. Scientific literature suggests that CBN has a greater effect on the immune
system than on the central nervous system; however, information on the effects of CBN on the endocannabinoid system is limited. We continue
to research the effects of CBN and how it interacts and modulates receptors in the body.
Significant investigation
is currently underway to determine the role of cannabinoids in affecting other receptor systems in the human body. Extensive preclinical
testing undertaken by us has identified several unique properties of CBN that outperformed both THC and CBD in various disease-related
assays and models. CBN can act with higher potency when interacting with some receptor systems in the body, while acting with lower potency
for others.
Physical and Chemical Properties of Active Pharmaceutical Ingredient
CBN
CBN is a stable, highly lipophilic cannabinoid compound. It
is insoluble in water, but soluble in organic solvents.
International Non-proprietary Name: Cannabinol (abbreviated CBN)
Chemical Abstracts Service Registration Number: 521-35-7
United States Adopted Name: Cannabinol
The molecular formula is C21H26O2 and the molecular weight
is 310.43 g/mol. CBN has no chiral centers.
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Figure 1 Structural Formula of CBN
CBN occurs naturally as a trace component of Cannabis,
or as a degradation product of D9-THC. However, our product candidates utilizing CBN contain highly purified synthetic CBN, rather than
a biological extract.
CBN as our Lead API
As the API in our lead therapeutic programs in dermatology
(INM-755) and ocular disease (INM-088), CBN has demonstrated several compelling features, including:
● A rare cannabinoid with unique physiological properties;
● Found in trace amounts in the plant and impractical to extract; and
We believe that we offer
a differentiated approach to selecting and delivering rare cannabinoids vis-à-vis other current competitors, many of whom are exclusively
focused on THC and/or CBD as their therapeutic agents. We believe that rare cannabinoids in general, and CBN in particular, represent
significant opportunities to treat a wide spectrum of diseases with high unmet medical need. In our preclinical testing, CBN has demonstrated
therapeutic potential beyond CBD for several symptoms and disease-modifying effects for dermatological conditions and has demonstrated
benefits beyond CBD and THC for ocular diseases. We believe that a topical application of CBN is targeted to maximize the clinical benefit
at the disease site (skin, eye) while minimizing the systemic exposure and any corresponding adverse effects.
Additionally, our IntegraSynTM
manufacturing approach may help unlock access to rare cannabinoids for further pharmaceutical development as a source of cost-efficient,
high purity API.
Our Product Candidates and Technologies
Development of a Biosynthesis-based Process for the Manufacturing
of Cannabinoids
Introduction:
While there are over 100
different individual cannabinoids in the Cannabis plant, the two most well-known and studied compounds are also the two that occur
in the largest quantities: THC and CBD. Due to their relative abundance in the Cannabis plant, it is also only THC and CBD that
can currently be extracted economically. Among other challenges, the expense of extraction – or that of synthetic manufacturing
– of the remaining minor or rare cannabinoids, may be orders of magnitude greater than that of THC and CBD.
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Nevertheless, like the major
cannabinoids THC and CBD, these rare cannabinoids may hold very important physiological benefits in humans. The challenge, and opportunity,
that we have identified, and seek to solve, is engineering an integrated manufacturing approach, specifically for the production of pharmaceutical-grade
cannabinoids – with an immediate focus on the rare cannabinoids – which is pure, cost-efficient, and consistently yields bio-identical
cannabinoids as compared to the compounds found in nature, among several other benefits. We believe that providing this solution would
be a critical success factor not only for our drug development strategy, but also for other biotechnology and pharmaceutical companies
as well.
In 2015, we commenced the
development of a biosynthesis process for the manufacturing of cannabinoids through a research collaboration with Dr. Vikramaditya Yadav
from the Department of Biological and Chemical Engineering at the University of British Columbia. Utilizing the basis of a specific vector
created for us, Dr. Yadav initiated a Research and Development Project titled “The Metabolic Engineering of yeast and bacteria for
synthesis of cannabinoids and Cannabis-derived terpenoids” under a collaborative research agreement. Subsequently, we signed
a Technology Assignment Agreement with the University of British Columbia whereby we retain sole worldwide rights to all patents emergent
from the technology under development in exchange for a royalty of less than 1% on sales revenues from products utilizing cannabinoids
manufactured using the technology and a single digit royalty on any sub-licensing revenues. Total commitments under research agreements
associated with this collaboration totaled C$418,044 of which all have been paid.
Microorganisms
do not naturally produce cannabinoids nor the enzymes required for their assembly. However, utilizing genome engineering to modify
their metabolism, we have systematically introduced different aspects of the Cannabis plant’s metabolic pathways into a
bacteria (E. coli), referred to as a host, and have reported what we believe to be the first-of-its-kind production of fully
differentiated cannabinoids in this bacteria. This research served as the basis for the subsequent development of a new, integrated
approach to cannabinoid manufacturing that we refer to as IntegraSynTM. IntegraSynTM is a flexible,
integrative cannabinoid synthesis approach utilizing novel enzyme(s) to efficiently produce bio-identical, economical,
pharmaceutical-grade cannabinoids without the risk and high-resource requirements of an agriculture growing operation.
In early research, we utilized
the specific gene sequences from the Cannabis plant that encode the instructions to make specific enzymes that enable cannabinoid
synthesis and subsequently transferred these genes into E. coli. This intervention converts the bacterium into a manufacturing
system that produces substantial quantities of the target cannabinoids. This technology may provide an opportunity for industrial-scale
manufacturing of cannabinoids, which we believe would be a significant improvement over existing manufacturing platforms such as direct
extraction from Cannabis plants or chemical synthesis. Specifically, direct extraction is quite cumbersome, time-consuming and
relatively low yielding for all but a few of the cannabinoid compounds. In contrast, the use of microorganisms for manufacturing cannabinoids
eliminates the need for an agricultural-centric process, including planting, growing, harvesting and extraction. There are also economic
and environmental advantages including substantially reduced resource requirements (e.g., water, electricity, manpower, etc.).
Furthermore, the agricultural approach has several hard-to-remove impurities (e.g., pesticides, etc.), potentially presenting safety
issues. As with all crops, yield fluctuations influenced by the environment present an additional risk. Only a few of the 100+ cannabinoids
can currently be extracted from the plant in sufficient quantities to make the process economically viable. For certain cannabinoids,
chemical synthesis, by comparison, can be challenging and expensive due to the complexity of these molecules. For these reasons, we believe
that a modified biosynthetic approach may be superior to both of these alternatives for cannabinoid production.
Cannabinoids are prenylated
polyketides that are derived from fatty acid and terpenoid precursors. The biosynthesis of these molecules involves four metabolic pathways,
two of which originate from central carbon metabolism. The first pathway (the Terpenoid pathway referenced in Figure 1 below) culminates
with the synthesis of geranyl pyrophosphate, or “GPP”, and neryl pyrophosphate, or “NPP”. These molecules are
terpenoid building blocks, or precursors. The second cannabinoid biosynthetic pathway, or the Polyketide pathway, is a truncated version
of a polyketide biosynthetic pathway and results in the second requisite precursor, either: olivetolic acid, or “OA”, and/or
divarinic acid, or “DVA”. The polyketide precursors subsequently combine with the terpenoid precursors in the third pathway,
which comprises a single, specialized enzyme in the plant, to yield the ‘gateway’ cannabinoids, the cannabinoids that act
as precursor molecules for further differentiation into all of the others. For instance, OA combines with GPP to yield the gateway cannabinoid
cannabigerolic acid, or “CBGA”. The gateway cannabinoids are subsequently modified in the fourth pathway to yield cannabinoids
such as tetrahydrocannabinolic acid and cannabidiolic acid. We refer to the fourth pathway as the down-stream pathway involving the transformation
of the acid form of the cannabinoids into the non-acid form via enzymes called synthases. Synthesis of CBGA is the most dominant pathway
in the plant, resulting in high quantities of the down-stream cannabinoids THC and CBD. Other combinations of the various precursors result
in different gateway cannabinoids which, in turn, leads to diversification into the 100+ cannabinoids.
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Figure 1:
© InMed Pharmaceuticals, Inc. and University of British
Columbia. All rights reserved.
Figure 1: Synthesis of the
gateway cannabinoid CBGA is the most prevalent pathway in the Cannabis plant, leading to high levels of both THC and CBD. Our technology,
IntegraSynTM, is designed to mimic the natural biosynthesis of cannabinoids starting with an E. coli biofermentation process combined
with additional common pharmaceutical manufacturing technologies.
Initially, we explored the
use of several potential hosts for cannabinoid biosynthesis, including the bacterium E. coli and the yeast S. cerevisiae.
Our preliminary investigations identified E. coli as a superior host for production of the primary gateway cannabinoid, CBGA.
Our earlier research led
to the successful construction of the terpenoid biosynthetic pathway and the gateway pathway for synthesis of CBGA and the down-stream
diversification pathways for synthesis of other cannabinoids. We have confirmed the biosynthesis of the cannabinoids using qualified High-Performance
Liquid Chromatography methodologies and Proton Nuclear Magnetic Resonance, or “H-NMR”, instrumentation.
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Our goal for the biosynthesis
program has always been to achieve the simplest, most efficient, scalable, flexible and economical solution with the least steps and fastest
production cycle, to make bio-identical cannabinoids to those found in nature. While developing our bacterial biosynthesis system over
the past five years, we further optimized the fermentation conditions and the purification processes. However, we identified several limitations
associated with the traditional biosynthesis process. Working with our CDMOs, we have continued development and optimization of our manufacturing
processes that led to the development of IntegraSynTM.
IntegraSynTM is
designed to potentially overcome the limitations of traditional cannabinoid production approaches. Extraction from the plant of rare cannabinoids
can be prohibitively expensive due to the limited quantity of these chemicals in the plant; is a resource intensive process with a large
carbon footprint; requires extended, agricultural-related cycle times; and, may face certain quality and consistency issues related to
pesticide removal, which may also face import/export restrictions. Chemical synthesis is a standard pharmaceutical manufacturing process
but may be limited in its ability to manufacture bio-identical cannabinoids, depending on the complexity of the target cannabinoid; removal
of non-bio-identical isomers from the final product may result in significant loss of yield; and, chemical synthesis may prove to be complicated
and costly to scale-up due to purification techniques involved. Traditional biosynthesis as a standalone process may be limited in its
final product yield due to the bioburden/stress placed on the microbe due to the complexity of the final products; there may be separation
and purification challenges when isolating the cannabinoid from the mixture; and, the process costs and complexity may increase with each
differentiated cannabinoid.
IntegraSynTM integrates
various pharmaceutical manufacturing processes to maximize yield and minimize the cost of cannabinoid synthesis. We utilize proprietary,
high efficiency enzymes produced via the E. coli biofermentation portion of the IntegraSynTM approach for the production
of a cannabinoid. Our enzymes are used in combination with cost-effective yet sophisticated substrates (or starting materials) to produce
a cannabinoid in bulk via a biotransformation process, which is then further processed with downstream purification steps including separation,
purification and drying. This cannabinoid can be inventoried in bulk and used either as a finished API cannabinoid product or as a starting
material for other cannabinoids. This further differentiation can utilize any one of several well-established manufacturing approaches
– including enzymatic biotransformation and traditional chemical synthesis – to optimize yield, time and cost.
IntegraSynTM makes
cost-efficient use of sophisticated starting materials, requires fewer costly steps from precursor substrates all the way through to end-product,
and is designed as a high-yield manufacturing process. Furthermore, this manufacturing method is flexible in shifting production from
one cannabinoid to another under GMP conditions. Our initial data demonstrated a substantial increase in cannabinoid production yield
per fermentation batch compared to our traditional biosynthesis method. The final cost of goods for individual cannabinoids is driven
by several factors including, among others: efficiency of the enzyme(s) used; number of manufacturing steps; type of manufacturing equipment
/ processes used; and, final yield of the entire manufacturing process.
Targeted Benefits of IntegraSynTM:
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Next steps in the further development of IntegraSynTM,
all of which are currently ongoing, include:
● Conduct analytical assays to support batch production;
● Scale-up process to be GMP ready;
● Identify potential partnership opportunities.
We currently view our options
for achieving GMP production capabilities as three-fold: (a) building our own dedicated biosynthesis facility; (b) accessing existing
manufacturing capacity via leases with third parties; or (c) licensing our process/know-how to a CDMO with existing infrastructure to
produce the requisite preclinical, clinical and commercial-scale supply of our Product Candidates.
Other Applications of our IntegraSynTM Approach:
While
the main objective in developing our IntegraSynTM approach remains to innovate an integrative, efficient and
cost-effective method for the production of cannabinoids for use in our pharmaceutical Product Candidates, we remain optimistic that
there may exist additional business opportunities for us to monetize this technology, including but not limited to supplying
cannabinoid drugs to the broader pharmaceutical industry. We continue to consider this, and other opportunities, in order to
optimize value for our company. Success in this strategy will be largely dependent on the ability of
IntegraSynTM-produced cannabinoid products to be price competitive with other technologies.
Competitive Conditions:
Other methods of synthetic cannabinoid manufacturing that
are currently being investigated by several entities include:
● Synthetic chemistry; and
● Combinations of these above-listed technologies.
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Several companies (see chart below) are active
in the cannabinoid manufacturing space including BayMedica, BioVectra, CB Therapeutics, Cellibre, Cronos, Ginko Bioworks, Hyasynth, Intrexon,
KinetoChem, Librede, and Purisys, among several others.
Key Milestones:
On May 21, 2015, we commenced
the development of our biosynthesis process for the manufacturing of cannabinoids through a research collaboration with Dr. Vikramaditya
Yadav from the Department of Biological and Chemical Engineering at the University of British Columbia under a project titled “The
Metabolic Engineering of yeast and bacteria for synthesis of cannabinoids and Cannabis derived terpenoids”. On May 31, 2017,
we signed a Technology Assignment Agreement with the University of British Columbia whereby we retain sole worldwide rights to all patents
emergent from the technology under development in exchange for a royalty of less than 1% on sales revenues from products utilizing cannabinoids
manufactured using the technology and a single digit royalty on sub-licensing revenues. Royalties are payable, on a country-by-country
basis, until such time as there is no longer a patent pending, unexpired patent or issued patent derived from the transfer technology,
in any country. On May 15, 2018, we extended our Collaborative Research Agreement, which may be terminated by either party upon 30 calendar
days written notice, with the University of British Columbia for an additional three years.
We, in conjunction with our
collaboration partners at the University of British Columbia, continue to advance the production platform for the biofermentation of cannabinoids.
Optimization of the vector continued in parallel with the identification of optimal fermentation conditions and down-stream purification
processes with third party contract manufacturing organizations. Optimization of the fermentation conditions was a project conducted with
the National Research Council Canada at their dedicated fermentation facility in Montreal, Quebec. While we do not anticipate any new
intellectual property arising from this venture, under the terms of this research agreement, the National Research Council of Canada owns
all new IP and we have a sole, fully-paid-up license to all commercialization rights of such IP. This project was initiated in October
2018 and concluded in the second half of 2019.
In
February 2019, we entered into a separate process development collaboration by way of a Master Service Agreement with the Almac
Group (UK), or “Almac”, a seasoned GMP pharmaceutical contract development and manufacturing organization. Almac was
initially tasked to develop a down-stream purification process to support the fermentation optimization activities at the National
Research Council of Canada. In addition, we also engaged Almac to assist in the development of an “alternative”
manufacturing process for cannabinoids which integrates the best available technologies across the spectrum of pharmaceutical drug
production. This process is now referred to as IntegraSynTM. We retain all rights to this new process while Almac retains
certain rights-of-first refusal on the production and supply of certain precursors, or starting materials, for this alternative
process.
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Other Milestones Include:
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Research and Development Pipeline of Therapeutic Drug Candidates
INM-755 for the Treatment of EB
Introduction
INM-755 (CBN) cream is being
developed as a proprietary, topical, single-cannabinoid product candidate intended as a therapy in dermatological diseases. The first
clinical indication under development is EB. EB is a collective name for a group of genetic disorders of connective tissues characterized
by skin fragility leading to extensive blistering and wounding. It affects skin and mucous membranes, particularly of the gastrointestinal
tract, genitourinary and respiratory systems. EB is a debilitating disease affecting a small proportion of people in the United States,
thus earning it an orphan-disease status. The disease has no definitive cure and all current treatments are directed towards symptom relief.
There are, however, a number of products, mainly gene therapies, currently in clinical trials, in which a cure is being explored, according
to several recent scientific publications. Our preclinical research has identified a specific cannabinoid, CBN, that may prove beneficial
to patients: first, by addressing certain key disease hallmarks (which may include wound healing, infection, pain, inflammation); and
second, by regulating the expression of various proteins (keratins) that may compensate for reduced expression of others.
The active ingredient in
INM-755, CBN, is an agonist for both cannabinoid (CB) 1 and CB2 receptors, with a higher affinity for CB2, which means it should have
a greater effect on the immune system than on the central nervous system. The distribution of CB1 and CB2 receptors in sensory nerves
and inflammatory cells in the skin make it an attractive pharmaceutical agent for dermal treatments in medical conditions characterized
by inflammation and pain.
In preclinical pharmacology
studies, CBN demonstrated activity as an anti-inflammatory and antinociceptive agent. CBN upregulated expression of keratin 15 (K15),
which might lead to skin strengthening and reduced blister formation in EBS patients with keratin 14 (K14) mutations. At the cream concentrations
chosen for clinical development, it does not appear to impede wound healing of partial-thickness wounds. Its anti-inflammatory activity
may be beneficial in healing chronic wounds caused by prolonged inflammation.
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We have completed 20 safety
pharmacology and toxicology studies to investigate the effects of CBN. We have also completed three Phase 1 safety and tolerability studies
in healthy volunteers, two studies of which were conducted with varying concentrations of INM-755 cream and one study of which examined
the non-CBN components of the cream base for INM-755.
The Science Behind EB
At the most basic level,
the hallmark of EB is poor anchorage of the epidermis to the dermis such that the skin and mucous membranes of the affected individuals
tend to shear and blister on minimal friction. This is due to the genetically inherited defect in certain genes (multiple genes have been
shown to be associated with the different subtypes of EB) that code for some specific proteins that are concerned with maintaining the
integrity of skin and mucous membranes.
There are four main subtypes
of the condition. Each of these subtypes can display a spectrum of phenotypic severity reflecting the types of mutations in different
genes, together with modifying environmental factors. The types of mutations also determine the mode of inheritance, either autosomal
dominant or autosomal recessive. The following table shows the pattern of inheritance and the defective genes and proteins in each:
Classification of EB Types
(a) EBS
This is the most common form
of EB and is characterized by a lack of adhesion of the skin directly above the basement membrane (the basal layer). An estimated 55%
of people with EB have EBS resulting from a genetic defect of the keratins K5 and K14, with the incidence between the two defects estimated
to be essentially equal. The most common form of EBS manifests itself as blistering confined to the hands and feet while in others blistering
can occur all over the body. Blistering generally appears during the neonatal period but it can also manifest itself in later childhood
(or even in adult life). Painful skin blisters are accentuated by friction, especially on the feet where footwear causes increased irritation.
Friction injuries tend to occur more commonly in warm weather and secondary infections are common.
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(b) Junctional EB
Junctional EB is characterized
by a lack of adhesion of the skin through the basement membrane and affects some 5% of those with EB. The generalized type of junctional
disease (about half of cases of junctional EB) is usually fatal in infancy. This is often as a result of anemia and malnutrition due to
poor feeding caused by the serious blistering in the pharynx and esophagus. The milder form of the disease can cause life-long pain and
disability.
(c) Dystrophic EB, or “DEB”
DEB is characterized by a
lack of adhesion of the skin under the basement membrane. Approximately 30% of people with EB have DEB. Patients with DEB tend to develop
blisters that heal with fibrosis, leading to joint contracture, fusion of the fingers, contractures of the mouth membranes and narrowing
of the esophagus. Often the dominant inherited type of DEB is the least severe type and the patient can lead an almost normal life. However,
the severity of the condition does increase with age due to scarring, syndactyly and generalized skin atrophy. Those with recessive DEB
have a high chance of developing a squamous cell carcinoma, often before the age of 35.
(d) Kindler Syndrome
This type of EB is rare and
usually becomes apparent at birth or soon after. This condition is called mixed type because blisters appear across the skin layers. The
condition usually improves with time and can disappear. It is the only type that causes patchy discoloring (mottling) of skin exposed
to the sun. Kindler syndrome is recessive.
(e) Epidermolysis bullosa acquisita
Epidermolysis bullosa acquisita
is a rare type that is not inherited. The blisters result from the immune system attacking healthy tissue by mistake. It’s similar
to another immune system disorder called bullous pemphigoid. It tends to cause blisters on the hands, feet and mucous membranes.
Epidemiology, Morbidity and Mortality
The most reliable figures
on prevalence and incidence of EB are derived from the National EB Registry, or “NEBR”, which collected cross-sectional and
longitudinal data on about 3,300 EB patients in the United States from 1986 through 2002. The prevalence of EB was estimated to be approximately
11 per million and the incidence approximately 20 per million live births. In the United States, assuming that mild cases of EBS are reported
only 10% of the time, the affected population in the United States is approximately 12,500. Other sources cite populations of up to 25,000
in the United States.
Generalized blistering caused
by any subtype may be complicated by infection, sepsis, and death especially in infancy. Severe forms of EB increase the mortality risk
during infancy. In patients with EB that survive childhood, the most common cause of death is metastatic squamous cell carcinoma. This
skin cancer occurs most frequently in patients with recessively inherited DEB who are aged 15-35 years. In contrast, dominantly inherited
EBS and DEB and milder forms of junctional EB may not affect a patient’s life expectancy adversely. Onset of EB is at birth or shortly
after. The exception occurs in mild cases of EBS, which may remain undetected until adulthood or remain undiagnosed. The disease appears
to have equal incidences in both sexes.
Current Treatments
As a genetic disease, EB
has no cure and, as a designated orphan-disease, there are no approved products specifically to treat this indication. Effective management
of EB patients involves a collaborative approach between several specialists, including surgeons, dermatologists, ophthalmologists, dentists,
psychologists, podiatrists, physiotherapists and geneticists. The aim is to provide support to the patient by alleviating symptoms and
managing complications; in particular, the patient caregivers must assess and act daily to treat the wound and enable wound healing, address
the current level of pain and itch, provide adequate antimicrobial protection, reduce inflammation (as a source of depressed wound healing
abilities) and address the emotional state of the patient.
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Current medications are employed
in control of pain (various types of analgesics including nonsteroidal anti-inflammatory drugs, or “NSAIDS”, tricyclic antidepressants,
gabapentin, and narcotics) and pruritus (antihistamines, etc.) and to address complications such as local infection and septicemia (local
and systemic antibiotics). Steroids and phenytoin are also used in managing dysphagia-associated pain. Tetracycline is considered to be
beneficial in improving the blistering and epithelial disadhesion. The complications of these classes of medications are well known and
the drugs are most likely to further complicate the patients’ conditions since they will be used on long-term basis.
The newer products currently
in research also have their problems. For example, the use of bone marrow was being researched by the University of Minnesota with some
promising results. However, the severe immunosuppression that bone marrow transplantation requires causes a significant risk of serious
infections in patients with large scale blisters and skin erosions.
Competitive Landscape
We are studying INM-755,
our proprietary, topical, single cannabinoid product candidate, as a first-line therapy in all EB patients for symptom relief and in EBS
as a therapy to potentially strengthen skin integrity via up-regulation of a keratin.
There are no therapies approved
specifically for the treatment of EB. This lack of treatment options creates a significant unmet medical need in this devastating condition.