The acquisition brings together Canopy Growth‘s medical business with Europe’s largest cannabinoid-based pharmaceuticals company. C3 is a leading manufacturer and distributor of dronabinol, a registered pharmaceutical drug in Germany, Austria, Switzerland, and Denmark.
Dronabinol was the first cannabinoid product in Germany that could be prescribed by the country’s physicians. In 2018, C3 supplied approximately 19,500 patients in Germany with dronabinol, achieving a YOY increase of 85%. In 2018, C3 achieved sales of approximately €27.1 million (CDN$ 41.5 million) with cannabinoid products worldwide.
Significant addition to the Company’s European infrastructure including a robust sales and marketing organization already serving pharmacies and healthcare practitioners.
Provides existing production of pharmaceutical grade API (active pharmaceutical ingredient), both natural and synthetic THC and CBD, to support pharmaceutical sales growth and ongoing global clinical research programs. C3 currently holds several patents related to cannabis including extraction technology and the synthetic production process and has several clinical trials underway.
The all cash-acquisition for €225.9 million (CDN $342.9 million) furthers Canopy Growth’s expansion into European markets with prescription medicines and gives the Company immediate access to a wealth of knowledge and intellectual property that C3has developed in its nearly 20 years of research and development into synthetic and natural cannabis medical products.
C3‘s primary medicinal offering is dronabinol, a pure chemical compound with standardized concentrations of tetrahydrocannabinol (THC), one of the active ingredients found in cannabis plants that is responsible for various pharmacological effects. Dronabinol is available in Austria, Denmark, and Germany for nausea and vomiting refractory to conventional treatment in oncology and palliative care, and for cancer pain. In Germany, dronabinol can be prescribed for any type of chronic pain and for any condition in palliative care. C3 has a total of five medicines in the market and its commercial operations generated €27.1 million (CDN $41.5 million) in 2018.
The acquisition will allow Canopy Growth to further empower European physicians with the knowledge and therapies drawn from the full range of synthetic to naturally-derived cannabinoid-based medicines. Adding dronabinol to Canopy Growth’s product offering in Europe and potentially other key markets will allow the Company’s medical division, Spectrum Cannabis, to present an expanded, medically validated suite of cannabinoid therapies to the benefit of healthcare professionals and patients. Furthermore, C3‘s infrastructure including production, distribution, and sales & marketing significantly adds to the Spectrum Cannabis footprint in Europe, including an expanding product line and additional reach into pharmacy and medical specialists’ networks.
C3‘s clinical research programs currently underway are expected to complement Canopy Growth’s own clinical activities and provide data that could potentially be applied to emerging product lines, enhancing the Company’s prospects for bringing new approved products to market sooner. C3‘s founding company, Bionorica SE, one of the world’s leading manufacturers of scientifically researched herbal medicines and Canopy Growth have also entered into a separate cooperation agreement and will be collaborating in areas spanning clinical research, IP development and distribution opportunities.
With its substantial cash reserve, Canopy Growth will continue to make strategic investments and acquisitions that will drive growth, create competitive advantage, enhance Canopy’s IP portfolio, and accelerate development and approval of cannabis-based therapeutics to continue to better serve its patients globally.
“What this boils down to is greater choice,” said Bruce Linton, Chairman & Co-CEO, Canopy Growth. “This acquisition will allow us to offer more options to physicians across Europe, accelerate our commercial sales and increase our economic footprint on the continent, and drive forward new innovations. Our goal is to build on C3‘s extraordinary reputation and decades of success as we move to an innovative continuum of medical cannabis therapies that will enable physicians globally to better treat their patients.”
“We are committed to changing the conversation around cannabis-based therapeutics in Canada and around the world,” said Dr. Mark Ware, Chief Medical Officer, Canopy Growth. “To do that, we need a diverse toolbox of therapies that can be used by physicians who see the potential of the complete spectrum of cannabinoid-based medicines. Welcoming C3 into our portfolio will help us put those tools in the hands of physicians and their patients in Germany and elsewhere across Europe.”
“In the last two decades, we’ve devoted ourselves to the research of cannabinoids and have developed a wide range of valuable cannabinoid compounds and related patents,” commented Professor Michael A. Popp, Owner and CEO, Bionorica SE. “Combining our knowledge, intellectual property, and reputation amongst clinicians and doctors in Germany, Austria, Switzerland, and Denmark with Canopy Growth’s expertise with natural full-spectrum medical cannabis products and ongoing clinical trials promises to better serve patients globally.”
C3 operates two state-of-the-art manufacturing facilities specializing, respectively, in natural extraction and synthetic cannabinoid production. These facilities have grown over the past 12 months to meet the growing demand for dronabinol and are scheduled for further expansion this year to accommodate forecasted rapid growth in the business.
In March 2017, Germany became the first country in the world to make dronabinol reimbursable. The prescription medicine is the first reimbursable cannabinoid agent in the country.
C3‘s senior management team includes; Dr. Josef Harrer, Head of Business Development and Medical Marketing at Bionorica ethics; Kristin Mann, Head of Marketing and Sales, Anna Urlacher, Chief Financial Officer, and Dr. Silvia Heise-Grubner, Head of Austrian operations. All four will continue to drive the business post-closing, accepting leadership roles in the Company.
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading diversified cannabis and hemp company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms. Canopy Growth offers medically approved vaporizers through the Company’s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in over a dozen countries across five continents.
About C3 Cannabinoid Compound Company
The C³ Cannabinoid Compound Company was founded in 2014 by Bionorica SE, one of the world’s leading producers of herbal medicines, as a holding company for the companies Bionorica ethics and THC Pharm. Both Bionorica ethics and THC Pharm have for almost two decades been researching and developing the key therapeutic ingredients of the cannabis flower: tetrahydrocannabinol and cannabidiol. Under the umbrella of C³, research, production and marketing have been pooled and optimized.