Israel generic drugs and medical devices company Panaxia has signed an agreement with Ultra Health, the leading medical cannabis distribution company in New Mexico, to build a cannabis processing plant. The plant will be built on one of Ultra Health's farms in New Mexico, and its products will be marketed in the US by Ultra Health.
Panaxia said that the six-month pilot project would include a commitment to buying merchandise for $250,000. Ultra Health operates in five US states besides New Mexico, providing potential growth for Panaxia's business. At the same time, Panaxia is also negotiating similar agreements with other US growers.
Panaxia Medical Devices and Pharmaceuticals is a private group of three companies - Panaxia Ltd., Tree of Life Pharma, and Maayan Haim Pharmacy with a business turnover of tens of millions of dollars a year. Founded 40 years ago as a chain of pharmacies, Maayan Haim is now a factory for pharmaceutical preparations providing drugs to pharmacy chains, health funds, and hospitals. Founded 15 years ago, Tree of Life produces over-the-counter drugs, based mostly on generic molecules in new formulations, and medical products, such as adhesive bandages, lice repellants, etc. The products are sold under the Tree of Life brand name, and also under private brand names, such as Super-Pharm's Life brand name. "Some of Life's hot items are actually ours," says Panaxia Medical Devices and Pharmaceuticals cofounder, partner, and business development manager Dr. Dadi Segal. Another company in the group is Luminera, which markets injectables for filling wrinkles.
The way cannabis is currently used through smoking or cooking does not allow a precise dosage of the material to be obtained. In addition, many patients do not wish to smoke it, and when the material is swallowed, most of it disintegrates, and a high dosage is therefore needed on order to obtain the desired effect.
Panaxia has developed a method extraction for the cannabis plant and measuring precisely the quantities of the leading active ingredients in it THC and CBD. The extract contains all the active ingredients in the cannabis plant, but in contrast to other extracts from the plan and the use of the entire plant, the level of the two active ingredients is controlled, and every pill or powder leaving the plant being built by Panaxia is designed to contain exactly the required dosage.
"We didn't realize at all that this was so special, until this grower from New Mexico came to us," Segal says. "He found us, and told us, 'I'm an excellent grower, but I don't know how to turn the crop into a medical product.' Today, the US medical marijuana market is growing, but there is a feeling that the plant actually comes from customers using the product for pleasure. The grower's aim now is to reach the real medical market, thereby sustaining strong growth. In order to convince patients, and especially their doctors, to consume the product, it has to act like a medical product - in other words, the customer knows what the exact dosage is, and exactly what ingredient he's getting."
Israel is very advanced in the medical cannabis field, both in academic research and openness of the market to this segment. It is currently difficult to find large international pharmaceutical companies willing to deal with this niche, mainly because it creates an image problem.
Panaxia already has a small amount of business in Israel. Segal says, "We know how to build small plants, because Israel is a small country. It turns out that this smallness is an advantage, because it's forbidden in the US to transport cannabis from one state to another, so they need a factory in every state on the scale of a small state like New Mexico exactly like Israel."
Panaxia is now preparing for clinical trials of its cannabis products, so that it can declare a clinical benefit for the product. It is currently illegal to conduct clinical trials for cannabis extract in the US, and the company regards this as another advantage.
Published by Globes [online], Israel business news - www.globes-online.com - on May 29, 2016
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