Nemus Bioscience Inc., a preclinical biopharmaceutical company developing cannabinoid-based drugs, has secured its largest financing to date.
The $20 million series E investment from investment firm Schneider Brothers Ltd. in the United Kingdom is four times the company’s largest round till then, a $5 million series B investment in August 2015.
Chief Executive Brian Murphy, who was most recently chief medical officer of Eiger Biopharmaceuticals Inc. in Palo Alto, a clinical-stage biopharmaceutical company that develops treatments for diseases affecting fewer than 200,000 people—and was previously chief medical officer at Valeant Pharmaceuticals International, said it “is one of the largest single investments in a cannabinoid-based biotech [company] at our stage of development.”
Proceeds will allow the Costa Mesa-based company to investigate all five drug candidates in its research and development pipeline.
Schneider Brothers, which changed its name when it moved to London in 1999, was founded in 1991 in Switzerland as the Schneider Boyeldieu Holding SA Investment Fund. It has operated since 2008 as an “aggregated” fund comprised of a series of private and personal funds belonging to nine partners who invest separately and independently. It has offices in Europe, Asia and South America, an office in Newport Beach, and a Florida location “in progress,” according to its website.
Nemus is the only cannabinoid investment in Schneider Brothers’ portfolio, a representative said.
“Our investment firm views the cannabinoid therapeutic space as a transformative and disruptive opportunity in drug development,” said John “Corky” Severson, director and partner for Schneider Brothers in a company news release.
Cannabinoids are a class of chemical compounds that are extracted from the cannabis plant. They’re the chemicals that interact with the cells in the body to produce a feeling of euphoria and enhanced sensory perception, among other effects.
Studies on Tap
Nemus plans to file for Food and Drug Administration approval this year to start clinical human studies of its two most mature drug candidates, which treat glaucoma and chemotherapy-induced nausea and vomiting, respectively.
Its pipeline also includes drugs that treat chemotherapy-induced peripheral neuropathy—weakness, numbness and pain from nerve damage that’s usually in the hands and feet; MRSA—methicillin-resistant super bacteria that have become resistant to antibiotics; and several eye diseases, including dry eye, macular degeneration and diabetic retinopathy.
The news of Schneider’s investment moved Nemus shares up about 35% to $0.35 per share in recent over-the-counter trading to a $9.2 million market cap.
Nemus licensed all patents related to two primary cannabinoids—tetrahydrocannabinol and cannabidiol—from the University of Mississippi. The university, which is among 115 institutions classified as “R1: Research Universities”—institutions with the highest research activity—in the Carnegie Classification of Institutions of Higher Education, also performs some preclinical testing and assessment for Nemus.
Alternative Delivery
Murphy said challenges that remain in developing cannabinoid-based drugs include material purity—higher quality cannabinoids with quicker turnaround time—and drug delivery method.
For the former, Nemus had signed a license agreement last summer for rights to Tampa, Fla.-based Teewinot Life Sciences’ biosynthetic technology to produce cannabinoid molecules. Biosynthesis involves the insertion of genetic material from the cannabis plant into yeast.
“Yeast fermentation results in the production of highly purified cannabinoids in a manner more cost-effective than chemical synthesis or deriving the molecules directly from the plant,” explained Murphy, adding that the method also requires less turnaround time, down from weeks or months to days.
Nemus is also focused on developing more effective ways to deliver cannabinoid-based drugs. Some of its competitors, including GW Pharmaceuticals in Salisbury, England, and Insys Therapeutics in Phoenix, Ariz., deliver their drugs orally. Nemus is exploring alternative methods, including suppositories, eye drops and nanotechnology.
