4 Potential Takeout Candidates In The Marijuana Sector

A consolidation wave is sweeping across the marijuana industry, as companies aim to improve their competitive positioning and market share in an industry which offers a lot a promise.

Aurora Cannabis Inc ACBFF 3.43% recently announced a deal to buyMedReleaf Corp MEDFF 3.42% in an all-cash transaction valued at C$3.2 billion.

The proposed combination would mean a total funded capacity of over 570,000 kg per year of high-quality facilities in Canada and Denmark.

Recent Deals In The Space

Aurora itself has been on a buying spree, having bought CanniMed Therapeutics in a C$1.2 billion deal and taken a majority interest in Green Organic Dutchman.

Aphria Inc APHQF 3.26% announced a deal in January to acquire Nuuvera, which works with partners in Germany, Italy and Israel, for C$826 million in cash and stock. Aphria also boughtVancouver Island-based cannabis producer Coast Cannabis for C$230 million in cash and stock earlier this year.

In an interesting turn, Constellation Brands, Inc. STZ 0.07% announced last October its intention to pick up a minority stake in Canopy Growth for C$245 million.

Why This Frenetic Deal Pace

M&A activity has perked up in the space in the last couple of years following the widespread legalizing of medical marijuana. To top it, Canada is poised to make the selling of recreational marijuana legal this year.

Sales of recreational marijuana may fetch Canada $5 billion per year to start with, according to estimates by Deloitte. This number goes up to $8.7 billion, if people who are likely to consume are also accounted.

“I think we’re going to continue to see a lot more (consolidation),” Alan Brochstein, a cannabis industry analyst and founder of 420 Investor, was quoted as saying to Marijuana Business Daily.

In Canada, there could be continued consolidation among licensed producers, Matthew Karnes, Founder and Managing Partner at GreenWave Advisors, an independent cannabis research and financial analysis firm, told Benzinga.

Karnes sees big alcohol companies picking up financial stakes in marijuana companies, with pharma companies waiting on the sidelines.

The momentum in pot stocks is so strong that Canopy Growth is seeking to list its shares on the NYSE under the ticker symbol CGC before the end of May. The company also announced an agreement to buy the 33 percent stake it doesn’t already own in its BC Tweed Joint Venture.

“Continued M&A activity and the billions invested in cannabis companies this year signal a maturation of capital market activity in the cannabis sector,” said Javier Hasse, Benzinga cannabis reporter and author of “Start Your Own Cannabis Business: Your Step-By-Step Guide to the Marijuana Industry.”

“The high level of investments also comes with better conditions to raise money and more comfort among investors,” said Hasse.

4 Potential Targets

Maricann Group Inc MRRCF

Maricann Group, which recently picked up Malta’s Medican Holdings, a licensed operator, has been discussed as a takeout target for quiet some time now. A March 19 article in Deep Divepointed to comments by CEO Ben Ward about a potential interest by an undisclosed party, and the appointment of M&A lawyer Clay Horner as counsel to the special committee of Maricann. The company recently announced a foray into the European market through its deal to buy Haxxon AG, a producer of feminized high CBD cannabis plants. In late December, it stitched up a deal to supply cannabis to Canadian pharmacy chain Lovell Drugs.

Emblem Corp EMMBF 0.85%

Licensed Canadian marijuana producer Emblem that focuses on edible oil and smokeless products could be a viable acquisition target, according to Technical420.com. The reason? Attractive valuation and focus on expansion and cannabis oil.

OrganiGram Holdings Inc OGRMF 1.42%

The company’s recently reported Q1 results showed a record revenue of C$2.4 million and the recent cultivation license expansion it received from Health Canada, which triples its production to 16,000 kg per annum.

Hiku Brands Company Ltd. DJACF 1.11%

The vertically integrated company formed following the merger of DOJA Cannabis Company and Tokyo Smoke has been on a bulking up spree. It recently announced an agreement to buy WeedMD. There have been whispers that Hiku is also being sought out.

Growing Market

The focus of companies operating out of North America could shift to potential targets in South American countries such as Columbia and Uruguay, according to Hasse. The rationale – license holders will be sought out, as these licenses are limited and have already been handed out.

With the imminent Canadian approval of recreational marijuana and more and more U.S. states legalizing marijuana, the prospects for the industry appears bright.

“In the US, we expect 2018 retail sales of $12.2B up from $8.2B in 2016 and reaching $35B by 2022 based on the expectation that every state will be medical only or fully Legal,” said Karnes.

https://bit.ly/2JgTKTr

Aimmune announces new clinical data on AR101 for Peanut Allergy

Aimmune Therapeutics reported additional results from its pivotal Phase 3 PALISADE trial of AR101 for the treatment of peanut allergy at the Congress of the European Academy of Allergy, Asthma, and Immunology 2018 in Munich. Aimmune previously announced that the trial met its primary and secondary efficacy endpoints in the pre-specified primary analysis of the 4-17 age cohort. Additional analyses including adults treated in the study were presented at EAACI. PALISADE enrolled a total of 554 patients ages 4-55. After approximately one year of treatment, clinical reactivity to peanut protein was assessed in an exit double-blind, placebo-controlled food challenge. The trial met its primary endpoint as 67% of AR101 patients ages 4-17 tolerated at least a 600-mg dose of peanut protein in the exit DBPCFC, compared to 4% of placebo patients. The lower-bound of the 95% confidence interval of the difference between treatment arms at the primary endpoint was 53%, greatly exceeding the pre-specified threshold of 15%. Based on these results, Aimmune plans to submit a Biologics License Application for AR101 to the U.S. Food and Drug Administration by the end of 2018, followed by a Marketing Authorisation Application to the European Medicines Agency in the first half of 2019. In the U.S., AR101 has FDA Fast Track Designation, as well as FDA Breakthrough Therapy Designation for peanut-allergic patients ages 4-17

https://bit.ly/2KZiufZ

Myriad Genetics signs definitive agreement to acquire Counsyl

Myriad Genetics announced that it has signed a definitive agreement to acquire Counsyl, a pioneer in expanded carrier screening and non-invasive prenatal screening for $375M through a combination of cash and Myriad common stock. On completion of the transaction, which is expected to close in Myriad’s fiscal first quarter 2019, Counsyl will become a wholly owned subsidiary of Myriad. Myriad estimates that approximately 900,000 carrier screening tests and approximately 1.3M non-invasive prenatal screening tests will be performed in the U.S. during its fiscal year 2018. The company believes these markets will grow at a double-digit rate with approximately 3.5M total reproductive genetic tests performed in the U.S. in fiscal year 2023, representing a market of more than $1.5B.

https://bit.ly/2kxuyK0

How age-enhanced photos of missing children are created

It happens everyday on Facebook, Instagram and in real life—that moment when you see someone you haven’t seen in years. Maybe they’ve gone gray or gained a few pounds, but there’s no doubt you’re looking at that friend from high school or the cousin who moved away when you were both 10 years old. You see the boy you once rode bikes with in the face of the man or the girl who taught you how to French-braid your hair in the eyes of the woman.

Those moments can be both exhilarating and nostalgic. You’re happy to see a person who played an important role in your life but wistful over the time together that’s been lost.

For parents of missing children, a photo of their child as he or she might look today can call up multiple emotions—sadness, anguish, frustration and anger to name a few. But for many, they also bring hope.

Colin McNally, supervisor of the Forensic Imaging Unit at The National Center for Missing and Exploited Children in Alexandria, Va., and three forensic artists on staff, have been tasked with creating age-enhanced photos of missing children. The photos can provide essential information in finding missing individuals.

“It’s a way to bridge a gap in time,” says McNally. “The missing child isn’t going to be just the 4-year-old boy in the photo. He’s going to be 10 years old—maybe 16 years old. He’s going to age and we do everything we can to make that aging appear as authentic as possible.”

Once a parent agrees to the process, McNally’s team tries to gather as many photos and as much information as possible before creating the age-enhanced image.

“Photos and videos of relatives when they were the current age of the missing child are really helpful,” McNally says. “They can help us determine what someone might look like today—the shape of the nose, the skin tone, the hairline. We don’t necessarily take all the traits from the mother or the father and incorporate them into the image. Instead, we try to be as logical as possible. If there are brothers or sisters, who do they look like? If there’s an aunt or uncle who looked like the child when they were young, we take that into account. We try to be as thorough as possible.”

In some cases, though, the source material is limited.

“We may only have one or two photos to use, maybe just of the child, so we have to work with what we have,” says McNally. “We’ll use what we know about general growth principles—wrinkles, sagging eyelids—to age them so it can be more difficult but it’s still possible.”

Once the source material is collected, the forensic artists use a high-resolution photo of the missing child as the base of their image or start from scratch. McNally’s team works on drawing tablets and iMacs, using Adobe Photoshop to create and enhance their work.

“We do color corrections and a few other Photoshop tasks but the majority of our work is actual drawing and digital painting,” says McNally. “It’s a very hands-on process.”

That process—nearly a pencil-to-paper approach—helps humanize the subjects and can keep the artists grounded in their work. “We have an amazing staff who put so much of their own selves into these images,” McNally says. “These are artists with a deep connection to their subjects.”

Before the images are finalized, the forensic artists show them to the child’s parents for their approval.

“They’re the experts on their child,” he says. “They may point something out that we missed, like a small scar or attached earlobes, or they’ll say something about a hairstyle or clothing.”

Once the photo is approved, it’s distributed to the FBI, thousands of law enforcement agencies and numerous private agencies. Since the program’s inception in 1989, NCMEC’s forensic artists have used age-enhancement techniques on more than 6,500 images of missing children and created more than 500 facial reconstructions for unidentified deceased children. Photos of the missing children are updated every two years until the child turns 18, then every five years. McNally says that some of the missing children have had their photos age-enhanced 12 times.

That commitment to the program is reflective of the importance McNally and others place on their profession. “It’s a huge responsibility,” says McNally.

And one that’s essential to NCMEC’s mission. “Any given day staff at the Missing Children Division are working on 5,000 to 6,000 active missing children reports—many of these are considered long-term cases—and the work our Forensic Imaging Team does to age progress long-term missing children is invaluable to our ability in finding these children,” says Robert Lowery, vice president of the NCMEC’s Missing Children’s Division. “It allows us to continually place in front of the public renderings of what we believe the child looks like in a present day setting and ask for their help in reporting any sightings. These images also serve as a reminder to the public that we are still looking for these children and will not stop until they are found.”

Given the difficult nature of searching for missing children, McNally says the challenge in aging someone isn’t just a matter of gray hair and added weight.

“We want to make sure that we’re really capturing the unique characteristics of the child, those little things that might make them recognizable to someone, like the way they smile—do they show their teeth? – or how they position their head—is their face at a slight angle when they speak?” he says. “If we’re right, someone will be able to look at someone who’s in 40s or 50s and see the person they knew when they were in their teens. We’re not just trying to capture what they look like; we want to show who they are. It’s not always possible but sometimes, we can find a small trait that can make all the difference.”

 Explore further: Abducted children: Conventional photos alone don’t aid the search

https://bit.ly/2GXpZBM

Genome’s dark matter offers clues to major challenge in prostate cancer

The dark matter of the human genome may shed light on how the hormone androgen impacts prostate cancer.

Researchers at the University of Michigan Rogel Cancer Center identified a novel gene they named ARLNC1 that controls signals from the androgen receptor, a key player in prostate cancer. Knocking down this long non-coding RNA in mice led to cancer cell death, suggesting this may be a key target for future therapies. The study is published in Nature Genetics.

Current prostate cancer treatments aim to block the androgen receptor to stop cancer growth. But most patients become resistance to androgen-specific therapies, developing a challenging form of the disease called metastatic castration-resistant prostate cancer.

“The androgen receptor is an important target in prostate cancer. Understanding that target is important. This study identifies a feedback loop that we could potentially disrupt as an alternative to blocking the androgen receptor directly,” says study senior author Arul Chinnaiyan, M.D., Ph.D., director of the Michigan Center for Translational Pathology.

Chinnaiyan’s lab identified thousands of lncRNAs in a 2015 paper. Long non-coding RNAs are considered the dark matter of the genome because so little is known about them.

While searching for lncRNAs that might play a role in prostate cancer, the team discovered that ARLNC1 is elevated in prostate cancer relative to benign prostate tissue, which suggests a role in cancer development. And it was associated with androgen receptor signaling, which made it more intriguing.

The researchers found that the androgen receptor actually induces ARLNC1 expression. Then ARLNC1 binds to the androgen receptor messenger RNA transcript. This stabilizes the level of androgen receptor, which then feeds back to sustain ARLNC1.

“At the end of the day, you’re creating or stabilizing more androgen receptor signaling in general and driving this oncogenic pathway forward. We’re envisioning a potential therapy against ARLNC1 in combination with therapy to block the androgen receptor—which would hit the target and also this positive feedback loop,” Chinnaiyan says.

When researchers blocked ARLNC1 in cell lines expressing androgen receptor, it led to cancer cell death and prevented tumor growth. In mouse models, elevating ARLNC1 caused large tumors to form. Knocking down ARLNC1 in mice caused tumors to shrink.

Researchers plan to continue studying the biology of ARLNC1 to understand how it’s involved in prostate cancer progression and androgen receptor signaling.

“We want to further characterize the dark matter of the genome,” Chinnaiyan says. “There are a number of these lncRNAs that we don’t understand how they functionally work. Some of them will certainly be very useful as cancer biomarkers and we think a subset are important in biological processes.”

More information: Yajia Zhang et al, Analysis of the androgen receptor–regulated lncRNA landscape identifies a role for ARLNC1 in prostate cancer progression, Nature Genetics (2018). DOI: 10.1038/s41588-018-0120-1

https://bit.ly/2GWq7RW

Interrupting androgen production: New drug target to combat prostate cancer

A study by an international team of researchers from University Children’s Hospital Bern and the Autonomous University of Barcelona has discovered how the production of specific human sex hormones known as androgens is interrupted. These findings can help in development of new therapeutic approaches, as the overproduction of androgens is associated with many diseases including prostate cancer in men and polycystic ovary syndrome in women.

One in seven men in Europe are diagnosed with prostate cancer. While majority of cases are treated with surgical procedures and hormone therapy, in about 70’000 cases tumor growth continues even after surgical castration (castration-resistant prostate cancer), where chemotherapeutic intervention is required.

One promising target has been the enzyme CYP17A1, which produces a precursor of androgens. Current treatment options include a drug called abiraterone. However, abiraterone has strong side effects and the life extension gained from treatment is only a few months.

Now a research team led by Amit Pandey from the Department of Pediatrics, Inselspital Bern and the Department for Biomedical Research of the University of Bern, in collaboration with Vall d”Hebron Research Institute in Barcelona, has reported a gene mutation that damages the specific enzyme CYP17A1 which controls the production of androgens. The results of this study, published in the Open-Access Journal “Pharmaceuticals,” could lead to a more efficient therapeutic approach for the treatment of castration-resistant prostate cancer. “Abiraterone, a CYP17A1 inhibitor, has been one the biggest breakthough drugs to combat advanced cancer. But resistance to this drug is still a major problem. Having a second line therapy as suggested by the current study, could be an effective way to control prostate cancer disease progression. This is a most exciting result,” says Mark A Rubin, Director of the Department for Biomedical Reseach and Prostate Cancer Investigator.

Gene mutation prevents androgen production

Amit Pandey in Bern has been investigating how prostate cancer drugs work and found that the drug abiraterone changes many metabolic pathways. Collaborators in Barcelona, led by Dr. Laura Audi, identified a patient that had a loss of androgenprecursor. After genetic and biochemical laboratory tests, the Spanish team was able to confirm a novel mutation in the gene CYP17A1. “I immediately realized that this was not some ordinary mutation but is located at the center of CYP17A1 protein where sex hormones bind,” says Pandey.

Further studies in Bern showed that sex hormones could no longer attach properly at the center of the defective enzyme. Biochemical studies in Bern also found that mutated gene results in a defective CYP17A1 protein which is responsible for production of androgen precursor DHEA. Pandey hopes that knowledge from this study will lead to the development of better drugs for the treatment of prostate cancer and polycystic ovary syndrome.

Successful International teamwork in translational medicine

This research is an example of translational medicine showing the collaboration of the bedside to laboratory research. “This could not have been achieved by either team alone,” Pandey emphasizes. The Audi group in Barcelona provided their decades of experience and competence in genetics and pathology and laboratories of Christa E Flück and Amit V Pandey at the University Children’s hospital Bern used their experience in advanced recombinant protein production, molecular biology of sex steroids, and bioinformatics to understand the complexities of androgen production in humans. “These research results exemplify what can be achieved with close collaboration between multidisciplinary teams,” says Pandey.

More information: Mónica Fernández-Cancio et al. Mechanism of the Dual Activities of Human CYP17A1 and Binding to Anti-Prostate Cancer Drug Abiraterone Revealed by a Novel V366M Mutation Causing 17,20 Lyase Deficiency, Pharmaceuticals (2018). DOI: 10.3390/ph11020037

https://bit.ly/2L1LpzZ

Paving way for personalized obesity treatments

Research by scientists at King’s College London into the role the gut plays in processing and distributing fat could pave the way for the development of personalized treatments for obesity and other chronic diseases within the next decade. The research is published in Nature Genetics.

In the largest study of its kind, scientists analyzed the fecal metabolome (the community of chemicals produced by gut microbes in the feces) of 500 pairs of twins to build up a picture of how the gut governs these processes and distributes fat. The King’s team also assessed how much of that activity is genetic and how much is determined by environmental factors.

The analysis of stool samples identified biomarkers for the build-up of internal fat around the waist. It’s well known that this visceral fat is strongly associated with the development of conditions including type 2 diabetes, heart disease and obesity.

By understanding how microbial chemicals lead to the development of fat around the waist in some, but not all the twins, the King’s team hopes to also advance the understanding of the very similar mechanisms that drive the development of obesity.

An analysis of fecal metabolites (chemical molecules in stool produced by microbes) found that less than a fifth (17.9 percent) of gut processes could be attributed to hereditary factors, but 67.7 percent of gut activity was found to be influenced by environmental factors, mainly a person’s regular diet.

This means that important changes can be made to the way an individual’s gut processes and distributes fat by altering both their diet and microbial interactions in their gut.

On the back of the study researchers have built a gut metabolome bank that can help other scientists engineer bespoke and ideal gut environments that efficiently process and distribute fat. The study has also generated the first comprehensive database of which microbes are associated with which chemical metabolites in the gut. This can help other scientists to understand how bacteria in the gut affect human health.

Lead investigator Dr Cristina Menni from King’s College London said: ‘This study has really accelerated our understanding of the interplay between what we eat, the way it is processed in the gut and the development of fat in the body, but also immunity and inflammation. By analyzing the fecal metabolome, we have been able to get a snapshot of both the health of the body and the complex processes taking place in the gut.’

Head of the King’s College London’s Twin Research Group Professor Tim Spector said: ‘This exciting work in our twins shows the importance to our health and weight of the thousands of chemicals that gut microbes produce in response to food. Knowing that they are largely controlled by what we eat rather than our genes is great news, and opens up many ways to use food as medicine. In the future these chemicals could even be used in smart toilets or as smart toilet paper.’

Dr Jonas Zierer, first author of the study added: ‘This new knowledge means we can alter the gut environment and confront the challenge of obesity from a new angle that is related to modifiable factors such as diet and the microbes in the gut. This is exciting, because unlike our genes and our innate risk to develop fat around the belly, the gut microbes can be modified with probiotics, with drugs or with high fiber diets.’

Source: https://www.kcl.ac.uk/

https://bit.ly/2IYtWYv