Cannabis companies have been feverishly stitching up partnerships with each other, beverage companies and biopharma companies to tap into the market's huge potential.
Israel-based Teva Pharmaceutical Industries Ltd (NYSE: TEVA) has taken a giant leap of faith in this direction.
The Canna-Pharma Tie-up
Teva's subsidiary Salomon, Levin, Elstein, better known as S.L.E., and Canndoc, a subsidiary of InterCure Ltd (OTC: IRCLF), struck a strategic distribution agreement, under which Teva's subsidiary will distribute Cannadoc's GMP products to pharma clients, which include hospitals, health maintenance organization and all pharmacies in Israel.
The agreement also allows S.L.E. to provide logistics capability to export Cannadoc's products to countries where sale and distribution of medical cannabis products are legalized.
The distribution agreement will run for a three-year, and carries the option for automatic extension for two years each. S.L.E. has an Israeli Health Ministry license for GDP distribution.
Meanwhile, Cannadoc is among the first licensed producers, with its GMP-approved medical cannabis prescription products sold in pharmacies.
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A Win-Win Scenario
For Cannadoc, the Teva deal provides the leeway to distribute GMP products to its patients within the S.L.E. pharmacy network throughout Israel, while it can also leverage the latter's logistical capabilities for exporting its products.
"Through its S.L.E. partnership, Canndoc has aligned itself with one of the most prominent pharmaceutical companies in the world, for the distribution of cannabis-based medical treatments to countries that recognize the value of these medicines for people in need," said Canndoc Chairman Ehud Barak.
Teva shares have been on an extended downtrend, as the company is besieged by multiple issues, including dropping revenues, especially of its multiple sclerosis drug Capaxone, margin squeeze stemming from slumping generic prices and liabilities associated with price gouging allegations.
Big Pharma Players Take Note
Aside of the Teva deal, there has been increasing interest among big pharma companies to gain a foothold or at least a toehold in the burgeoning medical cannabis industry.
GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) has an FDA-approved CBD drug for epilepsy in Epidiolex. By June 2018, there were about 400 clinical trials, both active and completed, involving cannabis world over, according to Visual Capitalist.
Medical cannabis sales could touch $5.9 billion in 2019, according to the report. It has the potential to poach about $4 billion in sales from the pharma industry annually.
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