One of Europe’s largest pharmaceutical companies has inked a supply deal with MediPharm Labs Corp. (TSX: LABS) — a move the Canadian extractor is calling a milestone for the global cannabis industry.
On Monday, the Ontario company reported it will supply GMP-certified medical cannabis products to Stada Arzneimittel AG for German distribution, as well as manufacturing, logistics, and regulatory support.
MediPharm said the partners will focus on Germany before potentially expanding into other European countries. The agreement forges the way for big pharma to commercialize medical weed products, according to the company’s statement.
Shares of MediPharm rose more than 15 per cent Monday to $0.97 on the Toronto Stock Exchange, after the deal was announced.
Based in the German town of Bad Vilbel, Stada sells generic pharmaceuticals and natural health products in approximately 120 countries, recording revenues of over $4 billion in fiscal 2019.
“Working with MediPharm will meet the needs of pharmacists and patients and deliver on Stada’s purpose of caring for people’s health as a trusted partner,” CEO Peter Goldschmidt said in the statement. “This partnership with MediPharm demonstrates Stada’s ambition to be the go-to-partner for generics, consumer health and specialty products.”
MAJOR NEWS: European Pharmaceutical Company @STADA Enters Exclusive Medical Cannabis Partnership with MediPharm Labs. Milestone for global cannabis industry: sizable #Pharma Co commercializing medical cannabis products. $LABS $MEDIF $MLZ https://t.co/Jy3oBTV56M pic.twitter.com/lhfYT4aqVb
— MediPharm Labs (@MediPharmLabs) October 5, 2020
Aside from commercializing MediPharm’s products in Germany, Stada will take on marketing responsibilities, launching a medical weed education campaign and leveraging its extensive experience in the pharmaceutical space.
The German medical cannabis market is currently worth about $275 million, or three-quarters of the European medical market, the Medical Cannabis Network estimates. However, the industry research firm notes the German market could reach $2.3 billion by 2025 with greater awareness and education.
In Germany, which has a population of 83 million, only 10 per cent of the country’s 20,000 pharmacies currently sell medical cannabis and only a limited number of doctors prescribe it.
MediPharm CEO Pat McCutcheon says the partnership represents meaningful revenue potential for his firm as pharmaceutical giant Stada could significantly transform the European medical cannabis space in the years ahead. The company said details of product shipments will be revealed in the coming months.
“This partnership is exactly the type of business MediPharm has been pursuing since its inception and a validation of our strategy to deliver GMP-certified cannabis products that can be used in multiple new products in multiple markets around the world,” McCutcheon said in the statement.
Since MediPharm reported three consecutive quarters of declining Canadian revenues in August, the company said it’s focusing on accelerating its international growth strategy. MediPharm says its GMP-certification and pharmaceutical approach to processing cannabis is key in driving the strategy forward.
Last month, the extractor landed two deals in Denmark’s medical cannabis market, as well as two more contracts inside Latin America.
The Danish government will launch of a four-year medical cannabis pilot program in 2021 based on a pharmaceutical paradigm with strict standards and requirements set by regulators for producers and processors.
MediPharm signed a one-year supply contract with a Peruvian-based producer on Sept. 1, followed by a two-year agreement signed with Rio de Janeiro-based XLR8 Brazil on Sept. 22.
Top image via Stada