Canadian biotech firm invests in Lowe's Flavocure lab

Wednesday, November 07, 2018

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Canadian firm Atlas Biotechnologies Inc has acquired a 20 per cent stake in Dr Henry Lowe's US-based lab Flavocure LLC in a share swap valued at US$5.75 million.

The agreement will see Atlas investing US$500,000 cash in Flavocure and the issuance of Atlas common shares at a value of CAD$6 per share.

Both biotechnology companies announced the investment yesterday, pointing out that it will facilitate the research and development of pharmaceutical drugs derived from cannabis.

“Our early success in finding cannabis-derived molecules for new therapeutic cancer discoveries attracted the interest of a great partner in Atlas,” a news release quoted Dr Lowe, Flavocure's executive chairman. “We are very much looking forward to collaborating with them on our genetics programme and other drug research programmes in the field.”

Atlas said it plans to develop a breeding programme dedicated to isolating additional molecules in the flavonoid spectrum and identifying further cannabinoids for potential research and supply for future drug commercialisation.

“Flavocure is an excellent fit for Atlas Biotechnologies, as our business philosophy is built around curing disease and illness using cannabis derivatives,” Atlas CEO Sheldon Croome said, adding that Flavocure's US Food and Drug Administration (FDA) orphan drug designation for the treatment of Acute Myeloid Leukemia (AML), combined with its “attractive oncology pipeline”, made the company an obvious choice for collaboration with Atlas.

“We intend to jointly develop specialised cannabis cultivars to further unlock the potential of targeted flavonoids in medical research,” said Croome.

Flavocure, which is based in Maryland, USA, has developed an impressive pipeline of oncology research, with patent pending status on two therapeutic molecules which use cannabis flavonoid derivatives in the treatment of three aggressive forms of cancer — AML, pancreatic, and glioblastoma (brain) cancer.

Flavocure said that it is collaborating with some of the world's most prestigious cancer research institutions and has discovered ground-breaking cannabis-derived molecules with preliminary data indicating activity against therapeutically validated kinase mutation targets.

One of the firm's two proposed therapeutics, Cresorol, has been approved by the FDA with an orphan-drug designation which, following planned short-term toxicology studies, is anticipated to permit fast-tracking of advancement to Phase One and subsequent studies. Flavocure said it is also undertaking the development of a new drug for the treatment of both pancreatic cancer and glioblastoma.

“Due to the emphasis on the growing of cannabis and the isolation of crude products, including cannabis oils, to meet the needs of the medical cannabis industry, the base of the pyramid has become too broad,” Dr Lowe said.

“Around 98 per cent of the players in the industry are operating in this same space. However, there is a need for secondary and tertiary products that will allow for effective research and development as well as innovation. This will also lead to significant wealth creation when pharmaceutical products are developed. It is in this area that Flavocure has been focused, particularly in the development of drugs for the management and cure of cancers,” Dr Lowe added.

Flavocure was founded in 2015 by Dr Lowe in association with the company's Chief Executive Officer Dr Ngeh Toyang. The lab is one of three science-based institutions developed by the Jamaican scientist in an effort to expand local cannabis research and development of natural products.

Flavocure said it should soon undertake a new equity financing which, combined with expected research grant funding in 2019, will be used to accelerate research efforts on its current three target cancers.

The companies explained that as part of the integral future collaboration, Atlas' vice-president of operations and one of its founding directors, Jeffrey Gossain, will sit on Flavocure's initial seven-member board of directors. He will aid in the development of Flavocure's operational and corporate structure.

Atlas is based in Edmonton, Alberta, and its wholly owned subsidiary, Atlas Growers Ltd, is federally licensed for cultivation and production of medical cannabis products.

The company said it currently has a purpose-built, 38,000-square foot laboratory where it can produce over 5,000 kg of dried cannabis annually as well as refine cannabis into isolated concentrates in mass capacity. Further, Atlas Growers' owns a 160-acre site that could allow for significant future expansion of cultivation capacity in Alberta, with a development permit in place for up to 1,000,000 square feet of additional construction.

Atlas also owns 50 per cent of Coastline Canada Inc, a late-stage applicant with Health Canada that is anticipated to be licensed for cultivation on Vancouver Island in late 2019.

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