CB2 Insights (CNSX:CBII) on Launching Patient Data Management Software in UK
CB2 Insights Inc (CNSX:CBII) (OTCMKTS:CBIIF) CEO Prad Sekar joins Midas Letter to discuss strengthening the company’s presence in the UK medical cannabis market with MyAccess Clinics tie-up. CB2 Insights specialize in clinical trials for companies that want to develop medicine in a range of therapeutic areas. CB2 service over 100,000 patients a year which operates as a profitable business. Those profits then go to fund commercializing further technology and research. With the company’s latest news, CB2 will provide MyAccess Clinics its software within multi-clinic operation in the UK for data input and management.
James West: Prad Sekar joins me now, CEO of CB2 Insights. Prad, welcome.
Prad Sekar: Thanks for having me.
James West: Prad, can you give us an overview of what exactly is the business of CB2 Insights first, please?
Prad Sekar: Sure. So we’re a research and data technology company. We play within the medical cannabis sector only, so it’s a global company; we’ve been around since 2014. We have offices now in Canada, US, just launched into the UK and Colombia, as well. The company focuses on evidence-based outcomes for medical cannabis, so if you’re a drug developer or playing within the medical cannabis sector, safety, efficacy, all these are typical kind of things that you need to identify on a drug that’s being commercialized. So we specialize, using very unique technology, to be able to run clinical trials and effectively gather data on the clinical use of medical cannabis.
James West: Oh. So you’re not a grower or a product manufacturer?
Prad Sekar: No. We don’t actually touch the product at all. It’s completely ancillary.
James West: Oh, interesting. So you specialize in clinical trials for companies that want to develop clinical drugs, medical drugs?
Prad Sekar: Yeah. So we do third party clinical trials. We actually do our own testing as well, within our own centres that we have in the US market currently, and a big part of the data, as well, is to see how it can inform sort of future guidelines and recommendations and drug development.
James West: So, do you focus on, like, you’ve got CB in the name; is that strictly CBD, is that your focus?
Prad Sekar: CB2, so the idea behind it was a fun spin into cannabis insights.
James West: I see. Interesting. So, are you a profitable company at this point?
Prad Sekar: So we do have a profitable division. So we have three areas of the business: clinical operations, product and data analytics, and then we have a research division, as well. So the clinical operations is primarily focused in the US currently, so we own and operate the largest network of medical clinics, right now, that specialize in medical cannabis evaluation. So we have about 35 locations, 14 states; we service over 100,000 patients a year, unique patients, and that operates as a profitable business. And so the profits from that business go to fund technology and research, which we’re now starting to commercialize.
And we actually just released a new press release this morning that announced our second licensing of our technology platform in the UK market. So we’re starting to see added revenue streams coming in and the new revenue opportunities that are being created.
James West: Interesting. So then, does the – are your customers other LPs, or other cannabis pharmaceutically-oriented companies? Or, who are your customers?
Prad Sekar: Yeah, so we focus right now, you would call them licensed producers. Split between the two, we focus on producers that are looking at medical cannabis as cannabis-derived medications. So running trials and getting data on flower is very difficult, so we look at producers that are manufacturing products or single-use medications, per se, and then specifically help them with either understanding their products’ use in the market from a post-marketing surveillance perspective, or helping them through the actual drug development process as well.
We also work with third party research organizations, as well. So we announced over the summer we partnered with Drug Science in the UK, which is a third party independent research organization. So these are groups that are looking to do their own establishment of trials in certain markets, leveraging technology that we’ve developed, leveraging our experience and know-how within the US and Canadian markets.
James West: So the focus is on a technological differentiator to the usual business of running clinical trials for companies?
Prad Sekar: Yeah. So the anchoring aspect of the company is really based on tech. so it’s what we call as electronic data capturing, clinical data management systems; and you’ve got this in a variety of different verticals of health care. What makes it unique is that you’ve got this tech that allows you to specialize in running a very specific area of health care, and running trials in that space. And it’s quality of data capturing, and it’s quality of data reporting.
So what we designed through experience was, the system is able to follow the workflow of a medical cannabis evaluation in a real clinical setting. So it makes it much faster for a company who’s looking to deploy a clinical trial in the space; they don’t have to do all these customizations, it’s not as expensive. So using that as an anchor, we usually enter relationships, and then from there, we usually find sometimes clients also need help with the actual deployment of the clinical trial. So we’ve got an in-house CRO; we do complete, end-to-end clinical trials. So we can assist sort of as a one-stop shop across helping them recruit patients, helping them build patient networks using technology, and then actually running the CRO trials, as well.
James West: Wow, sounds fantastic. All right, so then, how does the business scale over time?
Prad Sekar: So we started primarily technology here in Canada; it’s where our method centre is. Our biggest market right now is in the US, because that’s where we spent the last few years really establishing that market. And we’re starting to see an evolution of medical cannabis, especially from data-driven outcomes coming out of markets like Europe and South America. So we’re starting to make headway into those markets; the UK, obviously, is our first European entry. We just launched our Colombian office as well, and we’re starting to enter conversations around doing clinical trials there, as well.
Colombia is an interesting market; it’s going to be a great source for clinical trials, we think. I mean, obviously there’s ability to do clinical trials at lower costs, but also the regulatory compliance is also much easier down there, as well. So for us in scalability, it’s going to be licensing technology to more players, publishing more research, getting involved in more of the medical side of the industry, and starting to really support drug developers in bringing products to market.
James West: Hmm. The conventional perception in the investor space is that if you’re going to take a product from zero to FDA licensing that is a drug, that you’re looking at a minimum of $800 million and probably a 10-year cycle. Does that still apply for cannabis, and if it does, where can do you do it cheaper?
Prad Sekar: Yeah, so I mean, it’s an interesting market, and we have this conversation frequently. So we’ll talk to producers who say ‘I want to be the next GW Pharma in the industry’ and we go, okay, well, you know, you understand that that’s going to take a significant amount of time, right? I mean, it’s not a quick effort.
James West: Took them, what, 15 years?
Prad Sekar: Right. And it’s going to cost a lot of money, and at the end of the day, sure, you get a patented product that can be marketed and can be commercialized, and you can protect your product. And ultimately, no one’s piggybacking off your data. Well, the reality is, in the medical cannabis sector, people are still piggybacking off of the research that’s out there. And so you’ve got this product that can be sold as a medicine, and in a lot of markets, it can be sold under a special access program where you don’t need to get it really registered the same way any other drug does.
And for years, it’s got all this safety data; people have used cannabis for years. We know that it’s not killing people, and we know that its efficacy is not fully understood, and we know that we don’t understand its addiction capabilities. But there’s a lot of research that’s being committed into there. So we talk to producers and we say, Look: you can go one of two ways. You can go the traditional drug development route, but be prepared for time and money.
And a lot of producers need to be able to also show value to shareholders sooner, so that means that, take the products that you’ve already developed and start to create post-marketing data around it, and start to at least generate data to at least support the claims you’re making when you’re educating physicians, or helping doctors prescribe your product better.
So there’s a variation. I think there’s an evolution of the industry, and I think it depends, from a producer’s perspective, how they want to position themselves. I don’t think it’s exclusive; I think you can have products that exist today in the market, and you could be working on future product formulations that will eventually be patented and FDA-approved. But you know, I think there’s definitely an opportunity to do it with both.
James West: Okay. I actually possess a license to sell medical cannabis products in a Latin American country, and they have said, the Ministry of Health, who I’m dealing directly with, has said that they need to see what kind of clinical data we have on any product we want to introduce as a medical product, and what approvals we have from existing medical authorities.
Well, obviously, the only medically approved compounds in the system globally are GW Pharma’s epidiolex, dronabinol, marinol, and anything more or less that it derived from a synthetic THC molecule could, theoretically, make it through that process.
Prad Sekar: Right.
James West: But more likely, it’s we have to explain to the health authority that no, this isn’t licensed anywhere yet, but, we can generate clinical data demonstrating its safety, efficacy, absence of side effects, etcetera. Is that where you would come in?
Prad Sekar: Yeah, so it’s actually in one of two ways. It’s interesting you say that. So, some governments, like in Colombia for example, INVIMA will allow sale of products if you can show some data to support it. And so, we use this term loosely: it’s called real world data and real-world evidence. It’s basically showing that a product’s been used in some capacity, and that validates at least the product to be able to be tested further.
And so you can take the cannabinoid profiles that are within the product that you’re selling, and say, Look: there’s been trials conducted on high CBD products or blended THC/CBD products, and it’s had an efficacy on this indication that I am looking to sell my product for. And it clearly has some value. So that should allow me to at least submit initial information to say, let me sell my product in the market, but I will deliver clinical results if I were to do it through a trial.
And so we aggregate a ton of data on usage patterns and patients and what products they’re using at a clinically validated level, and you know, this data could be useful on helping to generate that initial, let’s call it, acceptance for getting a product to clinical trials. And it doesn’t have to be the traditional Phase I, Phase II trials, but rather, sure: get your product into market and prove to me that it’s working. So, you know, get five physicians to start prescribing it, track it over six months, and then show me that that product is not hurting anybody, and that it’s actually having a positive effect on someone’s health outcome.
James West: Prad, we are going to have many more conversations, I can assure you that. But in the context of this show, we’re going to have to leave it there for now.
Prad Sekar: Okay, yeah.
James West: But thank you very much for joining me today.
Prad Sekar: Well, no, thank you for having me. I appreciate it.
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