Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) has partnered with the multinational tobacco giant British American Tobacco (BAT) PLC (LSE: BATS) (NYSE: BTI) and botanical drug developer AJNA Biosciences in a joint venture (JV) aimed at acquiring FDA approval for a hemp-based botanical drug.
Charlotte’s Web announced the new partnership on Thursday and will have a 40 per cent stake in the initiative. The proprietary new drug will be intended to treat an unspecified neurological condition and the companies are aiming to file an investigational new drug (IND) application with the U.S. Food and Drug Administration (FDA) and start Phase I clinical development this year.
AJNA’s Chief Medical Advisor Dr. Orrin Devinsky will be leading the project and AJNA will hold a 40 per cent interest. The joint venture’s initial investor, BAT, contributed US$10 million to the endeavour and will hold the remaining 20 per cent stake.
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The new drug is being developed with certain hemp genetics from Charlotte’s Web and the US$10 million contributed by BAT will be invested in the clinical development of the IND.
“Our investment in the joint venture reinforces our commitment to Charlotte’s Web and represents another step for BAT in our exploration beyond tobacco and nicotine,” said James Barrett, Commercial Director of Wellbeing and Stimulation at BAT.
BAT previously made a substantial investment of £48.2 million in Charlotte’s Web last November to help expand its intellectual property portfolio in the cannabis field. The company also partnered with Organigram Holdings Inc. (TSE: OGI) during 2021 in a strategic collaboration agreement focused on the research and development of CBD and other cannabis products.
“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,” said Dr. Devinsky.
“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,” said Jacques Tortoroli, CEO of Charlotte’s Web.
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Charlotte’s Web’s stock rose by 5.81 per cent Wednesday to $0.46 on the Toronto Stock Exchange.
BAT’s stock rose by 0.11 per cent Wednesday to US$35.32 on the New York Stock Exchange.