Medical Marijuana Inc (OTCMKTS:MJNA) just announced that Axim Biotechnologies Inc (OTCMKTS:AXIM) has entered into a term sheet that will see it develop a Marinol bioequivalent. For those not familiar with the relationship between these two companies, Medical Marijuana holds a large stake in Axim, and the former generally reports any developmental updates from the latter in its own news stream. Interestingly, Axim is valued at a far higher capitalization that Medical Marijuana (a little over a two-time multiple right now), and we think that Medical Marijuana could be in for a revaluation that balances out the discrepancy a little. After all, a positive development for Axim should translate to some upside, however small, in Medical Marijuana.With this in mind, here's what the latest development told us, and what it means for shareholders.So, we’ve mentioned that Axim is going to try and develop a bioequivalent to Marinol, but what does this mean? Well, Marinol is the commercial moniker for a drug called dronabinol, which is a clinically approved version (synthetic) of THC, the active compound in cannabis. Some readers might remember the uproar when this got approved surrounding the higher classification of cannabis on the banned substances scale. That's now well underway to being addressed, but at the time there was plenty of shouting about it.Anyway, that's a digression.This drug can basically be used to treat anything that cannabis is good for. Nausea, weight loss, pain management, all those sorts of thing. There's a problem, however, and it's rooted in side effects. In order to become active, and because it's a pill form dosage, it needs a liver pass. Basically, the THC needs to pass through the liver, before being distributed systemically. This means the drug needs some pretty potent concentrations of synthetic THC, and to put it bluntly, it gets patients high.This, of course, isn’t ideal for many patients, and it's this issue that Axim is trying to overcome.The company is employing its proprietary chewing gum development platform, the one that we've discussed here at Insider Financial on a number of occasions in the past, to develop a synthetic THC form of dronabinol, or Marinol, that doesn’t need a liver pass to activate the active ingredient. The removal of a liver pass means that lower potency concentrations can be used, and this should serve to, if not eliminate, at least reduce considerably the psychoactive side of the therapy.There's a huge market available to the company if it is successful in its efforts. More than 40% of patients that use Marinol stop using it because of the side effects. That's 40% of a market that's worth $160 million annually, but that is expected to grow exponentially over the coming decade, and that could grow dramatically based on the introduction of a chewing gum based dosing alone, without external growth factors adding to the potential revenue pool.So it's still early days, and investors should recognize this before considering a position in either Axim or Medical Marijauna based on this development alone. The latest announcement simply details the teaming up of Axim with a manufacturing API company, which will provide the active compound (the synthetic THC) to Axim for development. It's then got to pass through proof of concept and into the clinic before we get any idea of potential commercial likelihood.With that noted, these sorts of assets can be quickly pushed through development pathways due to their wide target patient population, and the novelty aspect of administration.Bottom line – it's a decent development and another string to both Axim and Medical Marijuana's bow. It's not going to bring about a revaluation of the former, but we should see some near term movement in the latter as markets take stock of Medical Marijuana's Axim stake and revalue accordingly.We will be updating our subscribers as soon as we know more. For the latest updates on MJNA, sign up below!Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.
Here's What The Medical Marijuana Inc (OTCMKTS:MJNA) and Axim Biotechnologies Inc (OTCMKTS:AXIM) Announcement Means
