Canopy Growth, the Canadian marijuana company in which U.S.-based Constellation Brands owns a 38 percent stake, has acquired C3 Cannabinoid Compound Company,a German company based in Neumarkt/Oberpfalz and a leading manufacturer and distributor of dronabinol, a registered pharmaceutical drug in Germany, Austria, Switzerland, and Denmark. The all cash-acquisition for €225.9 million (USD 253 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 C³ has developed in its nearly 20 years of research and development into synthetic and natural cannabis medical products, the company said in a press statement on Thursday.
C³ 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 companies 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.
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. In March 2017, Germany became the first country in the world to make dronabinol reimbursable. C³ has a total of five medicines in the market and its commercial operations generated EUR 27.1 million (USD 30.3 million) in 2018. The company runs in Germany two manufacturing facilities in Neumarkt/Oberpfalz and Frankfurt-Höchst specializing respectively in natural extraction and synthetic production.
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.
Canopy Growth stacked up its cash reserve when Constellation Brands increased its 9 percent stake in the company, which it acquired in October 2017 for a sum equivalent to USD 191 million (inside.beer, 30.10.2017), up to 38 percent in August 2018 in a deal worth equivalent to a record sum of USD 4 billion (inside.beer, 15.8.2018).
Through this cash reserve, Canopy Growth will continue to make strategic investments and acquisitions, the company announced today.
"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,” said Bruce Linton, Chairman & Co-CEO, Canopy Growth. “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."