Cannabis Pharmaceuticals and Biotech: Industry Vertical Infographic

How do pharmaceuticals and biotech apply to cannabis?

Companies in this category research and develop medical treatments using cannabis and hemp-derived ingredients. These ingredients include major cannabinoids (such as THC and CBD), minor cannabinoids, and the discovery of new active pharmaceutical ingredients. This category also includes companies aiming to produce non-plant-derived cannabinoids based on attributes of cannabinoids extracted from plants.

Subsegments

• Pharmaceutical discovery and development
• Delivery method (ex: pill, soft gel, tincture)
• Non-plant-derived cannabinoids and other molecules
• Medical devices (ex: inhalers)
• Lab equipment

The pharmaceuticals and biotech investment opportunity

Results from some early clinical trials around major cannabinoids (such as THC and CBD) have been promising, suggesting that medical cannabis may be used to treat conditions ranging from epilepsy to chronic pain. Further investment in research may help verify these trials and substantiate medical cannabis as a viable treatment option. Additional research around other molecules in the cannabis plant, such as terpenes and minor cannabinoids, could lead to first mover advantages for companies conducting that research.

A comprehensive intellectual property strategy may help successful pharmaceutical and biotech players lock in and protect the value stemming from their research and development efforts.

We believe the acquisition landscape in the pharmaceuticals and biotech category makes this a compelling area for investment. Both sectors have a deep history of M&A, with larger companies often acquiring early-stage companies. In these deals, companies typically look for experienced management teams, support from peer-reviewed research, and strong intellectual property. With large companies from these industries now eyeing the cannabis sector, we believe this vertical will provide strong returns.

Key statistics for the pharmaceuticals and biotech vertical

• ~450 active and completed clinical trials surrounding CBD, epidiolex, and THC¹
• US$62.6B - est. global medical cannabis market size by 2024²

 

¹Source: U.S. National Library of Medicine - “ClinicalTrials.gov” (as of February 2020)
²Source: Prohibition Partners - “The Global Cannabis Report” (2019)

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