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Medicinal cannabis company AusCann Group (ASX: AC8) has announced an exclusive storage and distribution agreement today with national pharmaceuticals provider Clifford Hallam Healthcare (CH2).
The move comes within a week of AusCann reporting the release of its low-dose cannabinoid-based hard-shell capsules, which it aims to have commercially available for physicians to prescribe in Australia within four months.
The deal is valid for 12 months with an option to extend further, and AusCann has consolidated its warehousing and logistics operations under the agreement, effective immediately.
"The agreement with CH2 replaces the Heads Of Agreement signed in January 2018 with Australian Pharmaceutical Industries Limited (API)," the company states.
"The Heads Of Agreement was discharged by mutual agreement between AusCann and API to enable both parties to engage with additional commercial partners in the field of cannabinoid-based medicines.
"Under the terms of the supply agreement with CH2, products will be supplied to pharmacies by CH2 for AusCann, in full compliance with the regulations governing the supply of an unregistered medicine."
The Western Australia-based company says the agreement marks another step on its path to making the capsules available for clinical evaluation and prescription through the Therapeutic Goods Association's (TGA) special access scheme.
Last week AusCann's CEO Ido Kanyon said reliable, stable and standardised medicines were critical for generating quality clinical evidence for cannabinoid-based medicines.
"This evidence is a prerequisite to market expansion and medical acceptance by healthcare professionals," Kanyon said.
"We remain committed to making our dose-controlled capsules commercially available for prescription to patients in Australia in the first half of 2020 through the TGA special access scheme and authorised prescriber scheme."
Kanyon said AusCann had a comparative advantage through its ability to customise dosing in an accurate and scalable way.
"Our ability to customise dosing in an accurate and scalable way will enable doctors to personalise dosing for specific," Kanyon said.
"Providing true to label customised dosing and enabling customisable treatment of the patient is what differentiates our product in the market."
The group expects cash outflows of y $4.68 million in the current quarter, compared to $6.4 million in the last three months of 2019 which was higher due to $3.4 million in construction costs for AusCann's product development facility.
The company finished 2019 with $26 million cash in the bank.
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