One of the market leaders in CBD products is teaming up with a subsidiary of the world’s biggest tobacco company to seek regulatory approval for a new botanical drug.
Charlotte’s Web Holdings, a market leader in full-spectrum hemp extract wellness products, announced on April 6 that it is forming a joint venture with AJNA BioSciences PBC (or “AJNA”), a subsidiary of British American Tobacco billed as “a botanical drug development company focused on mental health and neurological disorders.”
The companies said that the joint venture “was established to pursue FDA-approval for a novel botanical drug to target a neurological condition identified by the [joint venture] leadership team, which will be comprised of [Charlotte’s Web], AJNA and [British American Tobacco] representatives.”
“This novel botanical drug will be developed from certain proprietary hemp genetics of [Charlotte’s Web],” the announcement said. “The [joint venture] plans to engage with the FDA to file an Investigational New Drug (“IND”) application and commence Phase I clinical development in 2023.”
The announcement of the approval also added that British American Tobacco is kicking in $10 million to the joint venture as its initial investor.
“This joint venture is a capital efficient way for Charlotte’s Web to unlock the value of its intellectual property to advance development of effective botanical alternatives to current neurological pharmaceuticals,” Jacques Tortoroli, CEO of Charlotte’s Web, said in Thursday’s announcement.
The joint venture will be helmed by Orrin Devinsky, M.D., Ph.D., a neurologist and researcher who will oversee both its clinical and regulatory strategy.
According to the announcement, Devinsky “is an early stakeholder in AJNA and is the Director of New York University (NYU) Langone’s Comprehensive Epilepsy Center and a Professor of Neurology, Neurosurgery, and Psychiatry at NYU Grossman School of Medicine,” and “was a principal investigator for the development of the cannabis-based FDA approved drug, Epidiolex,” which is used to treat various seizure disorders.
“As one of the first clinicians to research novel cannabinoids, I am very excited to work on this project. I believe the properties of cannabis and hemp are well suited for the FDA’s new Botanical Drug Development pathway”, Devinsky said in the announcement.
British American Tobacco has diversified its portfolio in recent years to include holdings focused on both hemp and cannabis.
Last year, the company acquired a non-controlling minority stake in the Berlin-based marijuana startup Sanity Group GmbH, a move that a top executive at British American Tobacco described as part of the “ongoing work to explore numerous areas beyond nicotine, positioning BAT for future portfolio growth across a range of categories and geographies.”
“We continue to transform our business, through better understanding of our current and future consumers, as part of our A Better Tomorrow purpose,” Kingsley Wheaton, the chief growth officer at British American Tobacco, said in an announcement at the time.
Finn Age Hänsel, the founder and chief executive officer of Sanity Group, called the funding from British American Tobacco “an important milestone for us and a strong signal towards the future of cannabis in Germany and Europe.”
“I am grateful for the belief shown by both new and existing investors. Our goal is to leverage the full potential of the cannabis plant and to explore and harness the different cannabinoids—with the new capital, we will be able to accelerate our medical and consumer business units whilst preparing accordingly for cannabis legalization in Germany,” Hänsel said in a statement.
On April 7, James Barrett, the commercial director of wellbeing and stimulation at British American Tobacco, said that the new joint venture with Charlotte’s Web and approval “represents another step for BAT in our exploration beyond tobacco and nicotine.”
“We continue to transform our business, through strategic investments in innovative consumer, new sciences and technology businesses, as part of our purpose to build A Better Tomorrow,” Barrett said.