UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
(Mark
One)
☒ ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended June 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from to
Commission
file number: 001-39685
INMED
PHARMACEUTICALS INC.
(Exact
name of registrant as specified in its charter)
Suite 310 – 815 W Hastings, Vancouver, B.C., Canada V6C 1B4
(Address of principal executive office) (Zip Code)
(604)669-7207
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Exchange Act:
Title of Each Class Trading Symbol Name of Each Exchange On Which Registered
Common Stock, no par value INM The Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐
No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has fi led a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting fi rm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of December 31, 2022, the last business day of the Registrant’s
most recently completed second fiscal quarter, the aggregate market value of the Company’s voting and non-voting common equity held
by non-affiliates of the Registrant was $3,180,248.
On September 29, 2023, there were 3,328,191 shares of the registrant’s
common stock outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions
of the registrant’s definitive proxy statement for the registrant’s 2023 annual meeting of stockholders to be filed pursuant
to Regulation 14A within 120 days of the registrant’s fiscal year ended June 30, 2023 are incorporated herein by reference into
Part III of this Annual Report on Form 10-K.
InMed
Pharmaceuticals Inc.
TABLE
OF CONTENTS
Page
Part I 1
Item 1. Business
Item 1A. Risk Factors 44
Item 1B. Unresolved Staff Comments 77
Item 2. Properties 77
Item 3. Legal Proceedings 77
Item 4. Mine Safety Disclosures 77
Item 6. [Reserved] 78
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 90
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 91
Item 9B. Other Information 92
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevents Inspections 92
Part III 93
Item 10. Directors, Executive Officers and Corporate Governance 93
Item 11. Executive Compensation 93
Item 14. Principal Accounting Fees and Services 93
Item 15. Exhibits and Financial Statement Schedules 94
Signatures 96
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”). 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 in important market
segments. Such segments include clinically proven, FDA-approved pharmaceuticals, referred to herein as our “Product Candidates”,
and “Products”, synthesized cannabinoids that are provided to wholesalers and end-product manufacturers in the health and
wellness sector. Together with our subsidiary, BayMedica, we are developing multiple manufacturing approaches for synthesizing rare cannabinoids
for potential use in pharmaceutical Product Candidates as well as leveraging this significant manufacturing know-how as a business to
business (B2B) supplier to wholesalers and end-product manufacturers / marketers in the health and wellness sector. Our know-how includes
traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called
IntegraSyn. While our activities do not involve direct use of Cannabis nor extracts from the plant, we note that the US 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 as prescription-based
drugs. 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 and we do not utilize tetrahydrocannabinol (“THC”)
or cannabidiol (“CBD”), the most common cannabinoid compounds that are typically extracted from the Cannabis plant,
in any of our Products or Product Candidates. The API under development for our initial two lead 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 in our ocular program and for our INM-900 series program to treat
neurodegenerative diseases including but not limited to 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 companies who then further commercializes such products. We access rare cannabinoids via all non-extraction approaches, including
chemical synthesis, biosynthesis and our proprietary integrated IntegraSyn approach, thus negating any interaction with or exposure to
the Cannabis plant.
3
Corporate
Information
We
were originally incorporated in the Province of British Columbia, under the Business Corporations Act (British Columbia) (the
“BCBCA”), on May 19, 1981 and we have undergone a number of executive management, 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 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 20, 2023, 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 implemented 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, among others,
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.
Rationale
for Use of CBN and Cannabinoid Analogs 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
CBN molecular formula is C21H26O2 and the molecular weight is 310.43 g/mol. CBN has no chiral centers. See Figure 1 below.
Figure
1. Structural Formula of CBN
CBN
occurs naturally as a trace component of Cannabis, or as a degradation product of THC. However, our Product Candidates utilizing
CBN contain highly purified, chemically synthesized CBN, rather than a biological extract from the plant.
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. In this patient population, it is common for the blisters to become open wounds that do not heal well.
In
addition to relief of symptoms such as itch, 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 non-clinical 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 1 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 1 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 1 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 1 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 1 clinical studies in healthy volunteers and, based upon this outcome, we advanced the product candidate
into a Phase 2 clinical trial in patients with EB (Study 755-201-EB). Patient treatment in this study commenced in December 2021 and took
place across 13 sites in seven countries including Austria, Germany, Greece, France, Italy, Israel and Spain. The Study completed enrollment
in April 2023 and we released preliminary results in June 2023. INM-755 demonstrated sufficient anti-itch activity to warrant its further
development as an anti-itch therapy in patients with EB or other diseases.
The
purpose of the Phase 2 trial was to evaluate the safety of INM-755 CBN cream, which consists of the control cream plus the active pharmaceutical
ingredient CBN, and obtain preliminary evidence of efficacy in treating symptoms and healing wounds over a 28-day period in patients
with EB. All four subtypes of inherited EB, including EB Simplex, Dystrophic EB, Junctional EB, and Kindler Syndrome were accepted into
the Phase 2 trial. The Phase 2 trial used a within-patient, double-blind design whereby matched index areas were randomized to INM-755
CBN cream or control cream.
Results from the Phase 2 clinical
trial showed a positive indication of enhanced anti-itch activity for INM-755 cannabinol cream versus the control cream alone in an exploratory
clinical evaluation. The results for non-wound itch were not statistically significant in this small trial due, in part, to the clinically
important anti-itch effect of the underlying control cream. We are, nevertheless, encouraged by and satisfied with the INM-755 clinical
data for non-wound itch treatment. That the majority of the assessed patients in the trial showed important improvement in non-wound itch
from the application of INM-755, be it with similar outcomes to the control cream or better than the control cream, can be considered
impressive. For a discussion of the results, please refer to Summary of Completed and Contemplated Clinical Development Plans.
Full data from the study is expected to be published in the second quarter of fiscal year 2024.
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. 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, other rare cannabinoid and cannabinoid
analogs 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.
6
Rare
Cannabinoid Products in the Health and Wellness Sector
Our
wholly-owned subsidiary, BayMedica, LLC, is a revenue-stage biotechnology company leveraging its significant expertise in synthetic biology
and pharmaceutical chemistry to develop efficient, scalable, and proprietary manufacturing approaches to produce high quality, regulatory-compliant
rare cannabinoids for consumer applications. BayMedica is currently commercializing rare cannabinoids as a B2B supplier to distributors
and manufacturers/ marketers in the health and wellness sector, including nutraceuticals, cosmetics, functional foods and beverages,
as well as animal health markets. BayMedica currently has a robust portfolio of four different non-psychoactive cannabinoids including:
cannabichromene (“CBC”), cannabidivarin (“CBDV”) tetrahydrocannabivarin (“THCV”) and cannabicitran
(“CBT”).
Following the acquisition of BayMedica in 2021, a key priority in 2022
was accelerating commercial activities and building out a robust product portfolio as a supplier of raw ingredients to the health and
wellness sector. While there was slower than expected revenue growth in 2022, we have seen increased demand through the first half of
calendar 2023 due to better research of rare cannabinoids, companies and brands looking for product innovation and effects-based outcomes,
and the ability of companies like ours to be able to reliably supply high quality rare cannabinoids with low batch-to-batch variations.
During the financial year ended June 30, 2023, BayMedica had sales of approximately $4.1 million.
Supply chain optimization has been prioritized over the last 12 months
to ensure there is an adequate inventory to meet demand for our products. BayMedica continues to optimize its manufacturing processes
and supply chain logistics to reduce the overall cost of goods, while also improving the already high quality and purity levels for all
products in its portfolio. BayMedica has also been working hard to augment sources of raw materials and to add to its downstream purification
partners.
Although
there are no assurances this growth will continue in future quarters, this recent trend is encouraging. The increase in sales results
from expanded marketing efforts and increased demand in certain cannabinoid Products. BayMedica will continue to evaluate opportunities
for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain
focused on Products and Product Candidates that contribute highest margins, where BayMedica continues to hold a strong competitive position.
Our
Business Strategy
Our
goal is to develop a pipeline of cannabinoid and proprietary cannabinoid analog 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
as raw ingredients to end-product manufactures within the health and wellness sector.
These
activities are well underway, at various stages, for INM-755 for diseases of the skin, INM-088 for diseases of the eye and the INM-900
series for neurodegenerative diseases. 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 internal 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 are actively
seeking development and commercial partnerships. For INM-088 in glaucoma, because of the potentially large number of clinical trial participants
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. The commercial strategy for the INM-900 series of compounds will be evaluated in due course.
7
Leveraging
off our extensive chemical synthesis and biosynthesis know-how, we are developing an integrative cannabinoid synthesis approach designed
to produce bio-identical, economical, pharmaceutical-grade cannabinoids in a cost-efficient manner, called IntegraSyn. IntegraSyn is
designed to offer superior yield, control, consistency and quality of rare cannabinoids when compared to alternative methods.
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.
Our
Strengths
We
are the only clinical-stage company with multiple cannabinoid drug candidates, in multiple therapeutic categories, that is also currently
supplying rare cannabinoids to manufacturers in the health and wellness sector and who has internal expertise in multiple manufacturing
approaches including chemical synthesis, biosynthesis and a proprietary, integrated biosynthesis-based manufacturing approach, called
IntegraSyn, 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, IntegraSyn) 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 market opportunities.
Early
mover status as a B2B supplier of rare cannabinoids to the health and wellness sector.
As
demonstrated by the launch of several rare cannabinoids into the health and wellness sector, the team at BayMedica has substantial expertise
in the commercial manufacturing scale-up to produce rare cannabinoids at large scale as well as extensive cannabinoid sales and marketing
expertise. This know-how is important to establishing an early-mover status and to maintain cost leadership with regards to specific
rare cannabinoids.
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.
8
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.
Significant
investigation is currently underway to determine the role of cannabinoids in affecting other receptor systems in the human body.
9
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 cannabigerol (“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.
10
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 IntegraSyn 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 IntegraSyn. IntegraSyn 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.
IntegraSyn 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 IntegraSyn 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.
IntegraSyn
BayMedica’s
Chemical Synthesis and Biosynthesis Technologies for the Development and Production of Cannabinoids, Their Variants and Analogs
BayMedica
continues 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.
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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 a 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 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.
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 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 Commercialized by 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. 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 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 current batch sizes exceeding 100kg.
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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 and commenced commercial sales of CBT in calendar 1Q2022.
Cannabidivarin
(CBDV)
Beginning
in early 2021, BayMedica worked internally and with external parties to access and develop manufacturing technologies for the chemical
synthesis of the rare, non-intoxicating “varin” cannabinoid, CBDV. In calendar 4Q2021, via a 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 sector. We have since developed a novel and efficient
method allowing for the scalable preparation of CBDV at an improved costs of goods.
Tetrahydrocannabivarin
(THCV)
As
part of the R&D into manufacturing techniques to synthesize and produce CBDV, we also began researching and developing processes
to convert CBDV to the non-intoxicating rare cannabinoid THCV. In conjunction with our Chemistry CDMO and our in-house team, we developed
a robust pilot-scale process that produces THCV. We have now 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. As new manufacturing
approaches lead to reduced cost of goods for CBDV, these cost improvements benefit the THCV product as well.
Analogs
of Cannabinoids / New Chemical Entities
In
addition to the natural cannabinoids above, we have leveraged our expertise in pharmaceutical chemistry and biosynthesis to produce a
number of novel cannabinoid analogs and variants of pharmaceutical interest.
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.
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.
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, which expired
in 2021. Other than the 1% royalty, we do not have any ongoing financial commitments under these arrangements with the University of
British Columbia.
13
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 intellectual property (“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