AusCann has unveiled plans to enter the European cannabis market and import product into Australia and New Zealand under a deal with unlisted Australian firm, Eurocann.
The two firms will explore AusCann’s self-emulsifying drug delivery technology (SEDDS) with the aim of developing standardised dosage-form cannabis products in Germany and “other markets”.
Meanwhile, Eurocann’s wholly owned German subsidiary, HAPA Pharm, will exclusively manufacture and supply GMP medicinal cannabis to AusCann to sell in Australia and New Zealand.
The firms believe the tightening of quality requirements for imported products will prevent some international manufacturers from supplying medicine to Australia.
“This presents an attractive opportunity for the companies to supply low-cost EU-GMP cannabis products into Australia,” they said in a statement.
Under the terms of the agreement, AusCann will loan A$5 million to Eurocann to build additional greenhouses and expand its facilities to manufacture the new products.
Shares in the listed operation jumped 8% on the news to close the week’s trading on $0.069c.
The agreement cements the already close ties between the companies.
AusCann chairman Tod McGrouther is also non-executive chairman of Eurocann, and holds an indirect shareholding in the company. In addition, AusCann director Chris Mews is an employee and officer of the investment manager for Eurocann’s major shareholder.
AusCann said McGrouther and Mews were not involved in the negotiations from AusCann’s side “given their material personal interest”.
In a separate development, AusCann has halted production of its Neuvis 1:1 THC CBD oral capsules in order to focus on developing its SEDDS technology.
While “extremely pleased” with the response to Neuvis from patients and prescribers — repeat prescriptions account for 75% of sales — the firm acknowledged that revenue is limited.
“As such, the company has temporarily paused production of its 1:1 oral capsules to focus on the completion of its process development activities,” it said.
Those activities are “intended to significantly reduce manufacturing costs while improving consistency of supply and enabling a better variety of product formats for local and export markets”, AusCann added.
An exploratory clinical study into spinal cord injury has also been shelved to reduce costs while it completes its “manufacturing optimisation program”.
