Item 1A. Risk Factors 46
Item 1B. Unresolved Staff Comments 71
Item 2. Properties 71
Item 3. Legal Proceedings 71
Item 4. Mine Safety Disclosures 71
Item 6. [Reserved] 72
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 87
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 88
Item 9B. Other Information 89
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections
Part III 90
Item 10. Directors, Executive Officers and Corporate Governance 90
Item 11. Executive Compensation 90
Item 14. Principal Accounting Fees and Services 90
Item 15. Exhibits and Financial Statement Schedules 91
Signatures 92
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 continued optimization of cannabinoid manufacturing approaches;
● Our ability to develop our therapies through early human testing;
1
● Our ability to successfully prosecute patent applications;
● 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.
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.
2
Overview
We are a clinical stage
pharmaceutical company developing a pipeline of prescription-based products, including rare cannabinoids and novel cannabinoid analogs,
targeting the treatment of diseases with high unmet medical needs (“Product Candidates”). Together with our subsidiary BayMedica,
LLC, we also have significant know-how in developing proprietary manufacturing approaches to produce cannabinoids for various market sectors
(“Products”). We are developing multiple manufacturing approaches for synthesizing rare cannabinoids for potential use in
pharmaceutical Product Candidates and Products. Our know-how includes traditional approaches such as chemical synthesis and biosynthesis,
as well as a proprietary, integrated manufacturing approach called IntegraSynTM. We are dedicated to delivering new therapeutic
alternatives to patients and consumers who may benefit from cannabinoid-based products. 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 scientific approaches to establish non-plant-derived (synthetically manufactured), individual cannabinoid
compounds as Product Candidates in important market segments including clinically proven, FDA-approved medicines and Products that are
provided to wholesalers and end-product manufacturers. 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 ingredients 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 or Product Candidates; our current pharmaceutical drug Product
Candidates are applied topically, although future drug candidates may utilize other routes of administration; 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 or Product
Candidates. The active pharmaceutical ingredient (“API”) under development for our initial two drug candidates, INM-755 for
Epidermolysis bullosa (“EB”) and INM-088 for glaucoma, is cannabinol (“CBN”). Additional uses of both INM-755
and INM-088 are being explored, as well as the application of novel cannabinoid analogs to treat diseases including but not limited to
neurodegenerative diseases such as Alzheimer’s, Parkinson’s, and Huntington’s.
We believe we are positioned to develop multiple pharmaceutical 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 intoxicating
effects of THC). Currently, we intend to deliver our rare cannabinoid pharmaceutical drug candidates 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. The cannabinoids products sold through our B2B raw material supply business are
integrated into various product formats by the companies who then further commercializes such products. We plan to access rare cannabinoids
via all non-extraction approaches, including chemical synthesis, biosynthesis and our proprietary integrated IntegraSynTM approach,
thus negating any interaction with or exposure to the Cannabis plant.
On October 13, 2021, we acquired BayMedica Inc.,
now named BayMedica LLC (“BayMedica”). Upon closing of the transaction, BayMedica became a wholly-owned subsidiary of InMed.
3
Corporate Information
We were originally incorporated
in the Province of British Columbia, under the BCBCA, on May 19, 1981 and we have undergone a number of corporate name and business sector
changes since this incorporation, ultimately changing our name to “InMed Pharmaceuticals Inc.” on October 6, 2014 to signify
our intent to specialize in cannabinoid pharmaceutical product development. Our principal executive offices are located at Suite 310 –
815 W Hastings Street, Vancouver, BC, Canada, V6C 1B4 and our telephone number is +1-604-669-7207. 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, COO, General Manager, and (Sr.) Vice Presidents of Clinical and Regulatory Affairs, of Preclinical Research
and Development, of Chemistry, Manufacturing and Controls, of Discovery Research, of Chemistry, of Synthetic Biology, of Sales & Marketing
and of Commercial Operations. 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 September 1, 2022, including our management team, we had 13 full time employees and we also utilize the services of
several consultants. 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.
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, we seek to keep our approach to compensation simple and streamlined to reflect the still relatively moderate size of
our 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 contingent 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. Our policies and
practices apply to all employees, regardless of title. These guidelines include our Code of Business Conduct as well as our policies for
corporate disclosure, insider trading and whistle blower, all of which are posted on our website.
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 recommenced limited business travel and some 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 non-intoxicating
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.
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.
4
Rare vs. Major Cannabinoids: Types, Prevalence
& Application
The molecular formula is C21H26O2 and the molecular weight is 310.43
g/mol. CBN has no chiral centers.
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, chemically synthesized CBN,
rather than a biological extract from the plant.
CBN as our Lead API
As the API in our lead therapeutic programs in dermatology
(INM-755) and ocular disease (INM-088), CBN has 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 may maximize the clinical benefit at the
disease site (skin, eye) while minimizing the systemic exposure and any corresponding adverse effects.
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 prolonged 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.
5
Following a review of our
toxicology studies, 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 in the Netherlands. 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, based upon this outcome, we advanced the product candidate into a Phase
II clinical trial in patients with EB (Study 755-201-EB). The 755-201-EB study is designed to enroll up to 20 patients using a within-patient
design in which matched index areas are randomized to INM-755 cream or vehicle (no drug) cream in a blinded manner. InMed will evaluate
the safety of INM-755 (cannabinol) cream and its preliminary efficacy in treating symptoms and wound healing over a 28-day treatment period,
the longest period supported by nonclinical toxicology. All four subtypes of inherited EB; EB Simplex, Dystrophic EB, Junctional EB, and
Kindler Syndrome are eligible for this study.
In the fiscal fourth quarter,
based on the safety data of the first five adult patients who completed treatment with INM-755 CBN cream for the treatment of symptoms
in the Phase 2 clinical trial, an independent Data Monitoring Committee (“DMC”) agreed it is safe to allow the enrollment
of adolescent patients, defined as persons aged twelve to seventeen.
The clinical trial is taking
place in seven countries including Austria, Germany, Greece, France, Italy, Israel and Spain. Enrollment and patient treatment began
in December 2021 and are expected to complete during the calendar year 2022.
CBN is also the active pharmaceutical
ingredient in our second pharmaceutical drug candidate, INM-088, which is in preclinical studies as a potential treatment for glaucoma.
Current treatments for glaucoma primarily focus on decreasing fluid build-up in the eye. We are conducting preclinical studies to test
INM-088’s ability to provide both 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 neuroprotective effect. Notably, exposure of retinal neurons, called
retinal ganglion cells (“RGCs”) to increasing concentrations of several cannabinoids, including THC and CBD, resulted in dose
dependent cytotoxicity, or cell death, over time. Importantly, CBN-exposed RGCs demonstrated the lowest level of toxicity among the cannabinoids
used in these experiments. We also verified that CBN has an anti-apoptotic effect on differentiated RGCs when subjected to elevated hydrostatic
pressure.
Furthermore, CBN also exhibited
intraocular pressure reduction capability. INM-088 is in advanced formulation development. We selected a final delivery technology (MiDrops®,
EyeCRO LLC) based on the extensive data collected from these assessments that included solubility, drug delivery localization and sustained
effect.
The Company continues to advance
discovery work for the potential use of a rare cannabinoid to improve neuronal function and provide neuroprotection for treating neurodegenerative
disorders such as Alzheimer’s disease, Parkinson’s disease and Huntington’s disease. To date, screening for this indication
has yielded some meaningful analog candidates and we will continue to proceed with our plan to find an appropriate compound for a pre-clinical
development program.
For all current and future
pharmaceutical Product Candidates we intend to submit new drug applications (NDAs) (or their international equivalents) in most major
jurisdictions, including the U.S. either alone or with development/commercial partners.
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.
Rare Cannabinoid Products in the Health and Wellness Sector
Following the acquisition
of BayMedica in October of last year, key priorities for the Company in the second half of fiscal 2022 was to accelerate commercial activities
to build out a robust product portfolio as a supplier of raw ingredients to the health and wellness market, as well as to build a robust
patent portfolio of cannabinoid analog compounds. We continue to design and manufacture novel analogs to further support our patents in
the field and we continue to explore the therapeutic potential of these analogs in preclinical testing.
In April 2022, we announced
the market introduction of the rare cannabinoid cannabidivarin (“CBDV”) and in May launched delta-9 tetrahydrocannabivarin
(“THCV”), bringing the BayMedica portfolio to four cannabinoid products. Since October 13, 2021, the date of acquisition,
to June 30, 2022, BayMedica had revenues of approximately $1.1 million. While consumer companies have begun to investigate the use of
rare cannabinoids for new products, this has not translated to immediate, meaningful market demand, resulting in slower than expected
revenue growth. Contributing factors include but are not limited to: recent overarching recessionary pressures leading to hesitation within
the health and wellness sector to invest in, and launch, new rare cannabinoid products; in this nascent market, BayMedica’s perceived
competitive advantages of certified high purity and reliability and consistency of supply not resonating with the industry product manufacturers;
and, additional downward pricing pressure for cannabinoids in the health and wellness sector.
6
Given the above, the timing
of revenues for the BayMedica products has become highly uncertain and is causing management to re-evaluate whether, in the long-term,
the BayMedica commercial activities will achieve margins sufficient to justify further investment in that business line. As a result,
the Company made the decision to refocus on its core business in the pharmaceutical drug development area and reduce our financial exposure
in the health and wellness sector. To make that transition, the Company plans to focus sales efforts on reducing inventory and decreasing
other commercial manufacturing R&D efforts. BayMedica will continue to evaluate opportunities for potential structured supply arrangements
and collaborations and will consider other potential strategic alternatives for the commercial business.
Our Business Strategy
Our goal is to develop a pipeline
of prescription-based Product Candidates targeting treatments for diseases with high unmet medical needs as well as to develop proprietary
manufacturing technologies to produce rare cannabinoid Products for various market sectors and to produce their novel analogs for our
use in the pharmaceutical industry, by pursuing the following:
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. Building upon preclinical
data sets, 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 drug candidates towards commercialization.
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 either i) a “go-it-alone” commercialization effort; ii) out-licensing to third parties; or, iii)
co-promotion agreements with strategic collaborators for our Product Candidates. 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, 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. We
may also choose to partner or out-license INM-755. For INM-088 in glaucoma, because of the potentially large number of clinical trial
participants (possibly several thousand) and the extensive sales effort required to reach a large number of prescribing physicians, we
may consider exploring partnership opportunities early in the development process.
We are developing an integrative
cannabinoid synthesis approach designed to produce bio-identical, economical, pharmaceutical-grade cannabinoids in a cost-efficient manner,
called IntegraSynTM. IntegraSynTM is designed to offer superior yield, control, consistency and quality of rare
cannabinoids when compared to alternative methods.
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 6 years.
At the core of our activities,
we are a pharmaceutical drug development company and a developer and supplier of rare, naturally occurring cannabinoids and their analogs
that is focused on commercializing important cannabinoid-based medicines to treat diseases with high unmet medical needs.
7
Our Strengths
We are the only clinical-stage
company with both multiple cannabinoid drug candidates, in multiple therapeutic categories, that also has internal expertise in multiple
manufacturing approaches including chemical synthesis, biosynthesis and a proprietary, integrated biosynthesis-based manufacturing approach,
called IntegraSynTM, to meet the needs of the rapidly evolving markets 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, multiple manufacturing techniques, 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 us through all facets of drug development and product commercialization, either internally or externally
via partnerships. It is this group of individuals that will help optimize our chances for success.
Multiple manufacturing approaches.
The combined manufacturing
technologies from InMed and BayMedica provide us with a competitive advantage to utilize the most cost-efficient methodology (i.e. chemical
synthesis, biosynthesis, IntegraSynTM) for the development and commercialization of new Products and Product Candidates and
provision of rare bio-identical cannabinoids or their analogs to a wide spectrum of markets.
Leading experts in the therapeutic potential of the rare cannabinoid
CBN.
We have invested significant
time and effort in understanding the 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 rare 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. The acquisition of BayMedica brought several additional new
patent families to enrichen our manufacturing as well as drug development opportunities.
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 140 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.
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.
8
Significant investigation is currently underway
to determine the role of cannabinoids in affecting other receptor systems in the human body.
Our Products, Product Candidates and Technologies
Development of a Flexible Suite of Processes for the Manufacturing
of Cannabinoids
Introduction:
While there are over 140 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; this also now includes genetically modified plants designed to significantly increase quantities of CBG in
harvested crops. 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, CBD and CBG.
Nevertheless, like the major
cannabinoids THC, CBD and CBG, these rare cannabinoids may hold very important physiological benefits in humans. The challenge, and opportunity,
that we have identified, and seek to solve, is selecting and engineering the most appropriate manufacturing approach to making a specific
rare cannabinoid, at the desired quantity and requisite quality, which is 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 will be a critical
success factor not only for our own drug development strategy, but also for other pharmaceutical and health and wellness companies.
Development of InMed’s biosynthesis and IntegraSynTM
technologies:
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. Other than the 1% royalty, we do not have
any ongoing financial commitments under these arrangements with the University of British Columbia.
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.
9
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. 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
and the ability to economically scale the process. For these reasons, we believe that a modified biosynthetic approach may be superior
to both of these alternatives for pharmaceutical grade production of certain cannabinoids.
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 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 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 more than 140 different individual cannabinoids.
Figure 1:
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.
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.
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, we
further optimized the fermentation conditions and the purification processes. Working with various contract development and manufacturing
organizations (“CDMOs”), we have continued development and optimization of our manufacturing processes that led to the development
of IntegraSynTM.
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IntegraSynTM
integrates various pharmaceutical manufacturing processes to maximize yield and minimize the cost of cannabinoid synthesis, in particular
for pharmaceutical-grade products. 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 for pharmaceutical use. 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:
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 commercial 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.
BayMedica’s Chemical Synthesis and Biosynthesis Technologies
for the Development and Production of Cannabinoids, Their Variants and Analogs
BayMedica, Inc. was founded
by Shane Johnson, MD, Philip Barr, PhD and Charles Marlowe, PhD in September of 2016 with the objective of manufacturing cannabinoids
and novel cannabinoid compounds for use in health and wellness and pharmaceutical markets. BayMedica set out to develop cannabinoid manufacturing
techniques that are ‘method agnostic’, utilizing the most practicable, expeditious and cost-effective means to produce any
particular cannabinoid or novel cannabinoid compound.
Chemical Synthesis for the Development and Production of Cannabinoids
Chemical synthesis is a well-established,
long-standing, robust and reliable method for the production of myriad compounds for use in both consumer and pharmaceutical products,
including such commonly used medications as vitamin-D and acetaminophen. The production of cannabinoids, in particular CBD and THC, by
synthetic methods was first described in 1965 by Mechoulam, et. al. Although yields were typically less than 10% and the scales were small,
this work paved the way for methods to synthesize these common cannabinoids as well as many rare and novel cannabinoid compounds. Today
several companies such as Noramco, Purisys, Biovectra, Kinetochem and Benuvia reliably manufacture a wide variety of common and rare cannabinoids
to pharmaceutical API standards. However, because price points for these compounds have remained high, their utility in non-pharmaceutical
applications has historically been limited.
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Pharmaceutical chemistry methods
have also been of paramount utility in the creation of combinatorial libraries of new chemical entities for drug discovery. We believe
these pharmaceutical chemistry methods will also be of great value in the preparation of novel cannabinoid compounds with enhanced pharmacological
activities and have leveraged our expertise to this end. Using combinations of pharmaceutical chemistry and biosynthesis, the BayMedica
team has generated a wide variety of these compounds with the primary focus being on modifying the pentyl side chain found on many naturally
occurring cannabinoids. We believe that unlike a traditional drug discovery approach using combinatorial libraries, our approach, because
it does not change the core structure of each cannabinoid type, will result in a larger proportion of novel cannabinoids showing pharmacological
activity, thus increasing the probability of a successful drug candidate. Prior to the acquisition by InMed, BayMedica delivered multiple
novel CBN-based cannabinoid analogs to InMed for evaluation. Since that time, we have developed additional New Chemical Entities (“NCEs”)
with the ability to expand through existing and novel methods currently under development.
Chemical Synthesis-Derived Cannabinoids Under Development or Commercialized
BayMedica
Cannabichromene (CBC)
The historically high cost
of goods for cannabinoids manufactured by chemical synthesis has largely precluded their widespread adoption for non-pharmaceutical applications.
BayMedica has successfully manufactured and commercialized a rare cannabinoid, CBC, for sale to distributors into the health and wellness
industry. The development of a scalable process for the manufacturing of CBC began in 2018 using well established chemical synthesis protocols.
In calendar 1Q2019, a Material
Services Agreement was completed with a multinational contract research, development and manufacturing organization (“Chemistry
CDMO”) to facilitate the optimization and scale-up of BayMedica’s proprietary CBC manufacturing process using commercially
available starting materials sourced from various manufacturers. We scaled to a batch size of greater than 1kg by calendar 3Q2019 at which
time we contracted a leading U.S. manufacturer to provide the final purification of CBC to greater than 95% purity, a product we call
ProDiolTM CBC. This manufacturer also operates a North American (NA) based toll-processing facility with the capability to process
from 10kg to metric ton quantities of our crude CBC material under food-grade GMP conditions. By late 4Q2019 our Chemistry CDMO had scaled
the process to greater than 10kg, and by year end 2019 to almost 30kg with final purification at the NA contractor. We commenced commercial
sales of ProDiolTM CBC in November 2019.
Large scale manufacturing of crude CBC began at
our Chemistry CDMO in 1Q2020 at >40kg. The emergence of the Covid-19 pandemic significantly impacted sales beginning in calendar 1H2020.
Large scale production continued with several batches of over 100kg and 200kg in 2021.
Cannabicitran (CBT)
We have developed a process
for the efficient chemical synthesis of CBT through both in-house R&D efforts and via our CDMO. We began scaling this process and
conducted downstream processing and purification trials in late calendar 2H2021. We received initial purchase orders for, and commenced
commercial sales of, CBT in calendar 1Q2022.
Cannabidivarin (CBDV)
In calendar 1Q2021, BayMedica
acquired a license to utilize novel chemical synthesis technologies to produce and distribute the rare, non-intoxicating “varin”
cannabinoid, CBDV, exclusively in the USA and non-exclusively worldwide. BayMedica began R&D and scale up with our Chemistry CDMO
in calendar 2Q2021. Through that partnership, we have developed a novel and efficient method allowing for the scalable preparation of
CBDV. In calendar 4Q2021, via the Chemistry CDMO, we successfully scaled CBDV synthesis to commercial quantities and initiated procurement
of starting materials sufficient to meet expected customer demand. In April 2022, we commenced B2B sales of CBDV to the health and wellness
industry.
Tetrahydrocannabivarin (THCV)
As part of the calendar 1Q2021
license for techniques to synthesize and produce CBDV, we also acquired the rights to synthesize, sell, and distribute the non-intoxicating
rare cannabinoid THCV exclusively in the USA and non-exclusively worldwide. In calendar 3Q2021, we began researching and developing processes
to convert CBDV to THCV. In conjunction with our Chemistry CDMO and our in-house team, we have developed a robust pilot-scale process
that produces THCV. We developed a purification process to produce the finished THCV material. We began scale-up of our novel process
with this CDMO in calendar 1Q2022 and commenced sales in calendar 2Q2022.
Analogs of Cannabinoids / New Chemical Entities
In the field of pharmaceutical
drug development, the term analog is used to describe structural and functional similarity between an original (or parent) molecule and
one that has been somewhat modified. While any company researching a naturally occurring compound, like cannabinoids, cannot own a patent
on the molecule itself for commercial exclusivity, a modified molecule, which has certain structural and pharmacological similarities
with the original compound, can be patented. As well, modifications of the original molecule (ie, the analog) can be designed to confer
certain improvement in activity of the parent, such as an elevation of the desired physiological effects, a decrease in unwanted side
effects, improvement in aspects related to drug delivery to targeted tissues, etc., or a combination of these targeted outcomes. We have
filed patents covering numerous structural additions and modification of the naturally occurring cannabinoids. Each individual modification
to each individual cannabinoid represents a New Chemical Entity (“NCE”) which can be patented. If issued, this patent family
will confer market exclusivity to us for the analogs that we intend to develop into pharmaceutical Product Candidates, license, partner
or sell to interested external parties.
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BayMedica Yeast Biosynthesis for Cannabinoid Development and Production
BayMedica utilizes the yeast
S. cerevisiae as a “biofactory” to produce cannabinoids and cannabinoid analogs. Compared to other heterologous systems,
we believe that S. cerevisiae is an attractive host for development of a cannabinoid biosynthesis platform. S. cerevisiae is a
generally recognized as a safe organism that has a long history of successful use in the biotechnology industry for the large-scale production
of a variety of different fermentation products. In particular, S. cerevisiae has previously been engineered to produce high levels
of terpenes and polyketides – the building blocks of all cannabinoids. Genetic manipulation of S. cerevisiae is straightforward
and advanced genetic tools enable rapid strain engineering for optimized cannabinoid production. Moreover, our team has deep knowledge
and experience engineering S. cerevisiae for the heterologous production of natural products by fermentation.
Unlike in the Cannabis
plant, our flexible yeast platform allows for the specific production of a single precursor or cannabinoid. This process negates the need
for additional downstream steps to isolate and purify the desired precursor or cannabinoid from other naturally produced compounds found
in a plant-based extraction process. To that end we have engineered strains that produce the precursors and cannabinoids OA, DVA, CBGA,
CBGVA and THCVA at concentrations supporting further scale-up and development for future commercialization. At benchtop scale, we have
developed simple downstream processes for the purification of these compounds. We have evaluated multiple CDMOs capable of both the biosynthesis
scale-up and downstream processing.
In addition to the natural cannabinoids above, we
have leveraged our expertise in pharmaceutical chemistry and yeast biosynthesis to produce a number of novel cannabinoid analogs and variants
of pharmaceutical interest.
Hybrid Methods as a Platform for Cannabinoid Development and Production
Unlike other groups, our expertise in the areas
of yeast engineering, biosynthesis and pharmaceutical chemistry allows us to develop in-house technologies for the production of novel
cannabinoid compounds as well as the conversion of “common” precursors or cannabinoids into rare natural cannabinoids. For
instance, we have employed methods where we take a biosynthetic starting material and convert it into CBC via chemical synthesis.
We have also developed technologies whereby chemical
synthesis is used to make novel precursor compounds that are then converted biosynthetically into novel cannabinoids. As part of an announced
collaborative research agreement prior to the acquisition of BayMedica by InMed Pharmaceuticals, BayMedica delivered several novel CBN
analogs to InMed Pharmaceuticals for preclinical evaluation.
Competitive Conditions:
Other companies deploy a diversified number of cannabinoid
synthesis manufacturing techniques, including:
● Synthetic chemistry; and
● Combinations of these above-listed technologies
Several companies (see chart
below) are active in the cannabinoid manufacturing space including BioVectra, CB Therapeutics, Cellibre, Cronos, Ginko Bioworks, Hyasynth,
Intrexon, KinetoChem, Librede, and Purisys, among several others.
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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. Other than the 1% royalty, we do not have
any ongoing financial commitments under these arrangements with the University of British Columbia.
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 CDMO. 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. In May 2020, we announced our working relationship
with Almac on an integrated approach to augment current biosynthesis-based methods for cannabinoid production. The companies have been
engaged in developing a streamlined cannabinoid manufacturing process, specifically optimizing the upstream cannabinoid assembly processes
as well as downstream purification processes, to achieve cost-efficient, GMP-grade active pharmaceutical ingredients for prescription-based
cannabinoid medications. Almac is an international, privately-owned organization which has grown organically over the past five decades
now employing over 5,600 highly skilled personnel across 18 facilities including Europe, the US and Asia. 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.
Other Milestones Include:
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Research and Development Pipeline of Therapeutic Drug Candidates
INM-755 for the Treatment of Epidermolysis bullosa (“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