Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX) Is A Nice News Play In Cannabis-Oncology

Back in early November, we published this piece, outlining the potential for near term upside in junior cannabis related biotech company, Cannabics Pharmaceuticals Inc (OTCMKTS:CNBX). The company just picked up a close to 10% boost on the back of a release detailing it investigatory efforts, and we think that this could be just the start of a longer term run, assuming it can maintain a positive news flow.Before we get on to the specifics of the latest update, a quick note. Cannabics is one of a large number of cannabis stocks that took some benefit from the recent recreational legalization ballots in various states across the US. It's since corrected a little, but management has maintained some degree of communication by way of various press releases purporting to the potential efficacy of its approach to cancer treatment. Our buy thesis is based on this communication. That is, to say, it doesn’t suggest we'd be happy to get in long term on the potential for this treatment hitting commercialization and bringing in blockbuster revenues. It does suggest, however, that it's a hot space, and the company is using this to its advantage. As time passes, and more developments hit press, we expect they will boost the market cap of Cannabics further – almost irrespective of their inference.With that said, this latest release is pretty interesting.The company just reported that, as part of an ex vivo study of various combination formulas of specific natural cannabinoids (which are the active compounds found in marijuana), these combinations have induced apoptosis in cancer cells.Apoptosis is the primary process through which cells die. Generally, in healthy cells, this happens when the cells reach a certain age, or state, or when they are exposed to various pathogens. Essentially, it's a sort of cell suicide. The membrane breaks up, the cell's components spill out, and the immune system clears up the mess. Cancer cells don't undergo this process as efficiently as healthy cells. More often than not, they don't undergo it at all. They just keep growing and replicating, and this leads to the proliferation commonly associated with the disease.So, what Cannabics was trying to show here, is that its formulations can kill cancer cells (by kick starting the natural cell suicide process). And it has.The way companies generally undertake these very early stage studies is they acquire a cell line, which has derived from cancer cells taken from a real person. Cell companies take the cells, culture them in to a commercial batch, and then sell them to companies like Cannabics for investigation. There are about a dozen different breast cancer cell lines, and the one on which Cannabics has shown its formulation works on is called MDA-MB-231. This is the most widely used investigative type (it's not ER+ or PR+) and it's derived from invasive ductal carcinoma.This release, of course, is a nice step forward for the company, and it follows up on a very similar brain cancer release that hit press in October. ore important than the release itself, however, is the pattern of reports hitting press. October, we got a brain cancer release (again, anti tumor activity against a legacy cell line). December, we get a breast cancer release. We're looking for another release to hit press over the next month or so that demonstrates anti tumor activity in another type of cancer, and in turn, we're looking for this release to draw further speculative volume towards the company, and increase its market cap near term.This isn’t a company with a particularly attractive balance sheet, and its going to be diluting to fund trials (if it gets that far) but right now, it's a nice news play in a cannabis/oncology crossover.We will be updating our subscribers as soon as we know more. For the latest updates on CNBX, sign up below!Disclosure: We have no position in CNBX and have not been compensated for this article.