Oxford Cannabinoid Technologies (OCT), a legal cannabis company in the pain treatment space that counts the American rapper Snoop Dogg among its backers, is to list on the London Stock Exchange. The start-up has been valued at £50 million in a share placement that raised £16.5 million. The shares will start trading on Friday as a standard rather than a premium listing.
Oxford Cannabinoid, which has a research partnership with Oxford University, was founded as recently as 2017 and is developing what it hopes will become prescription pain treatment medicines derived from cannabis. As well as U.S. celebrity Snoop Dogg, who has interests in a number of legal cannabis companies through his venture capital firm Casa Verde, the company also includes tobacco giants Imperial Brands among its investors. The FTSE 100 company invested $100 million in 2018.
OCT has the stated target of 2027 by which to have brought its first approved drug into commercial production. To that aim, it intends to “develop a portfolio of four drug candidates for approval as licensed pain medicines”.
The company estimated the “addressable pain market” its intended future products would be sold into is worth at least £42.5 billion globally. There has been a surge in recent interest in medicines derived from cannabis, particularly with application to pain relief. GW Pharmaceuticals, the first company to gain regulatory approval for a cannabis-derived drug, was acquired by larger rival Jazz in January for a price of $7.2 billion.
Cambridge-based GW chose to list on Wall Street with London’s financial markets not considered as receptive to cannabis-derived pharmaceuticals at the time. At the time the UK’s cannabis laws were stricter and while U.S. capital markets investors have more experience of legal cannabis stocks, OCT has decided things have evolved enough domestically to not have to list on the other side of the Atlantic.
Co-founders Neil Mahapatra, through his company Kingsley Capital Partners, and Gavin Sathianathan and his wife, will retain ownership stakes in OCT of 21% and 8% respectively. Imperial Brands will own 11% of the company’s stock and Snoop Dogg’s Casa Verde 2%.
The cannabidiol cannabis derivative medicinal drugs being developed are usually based on contains only CBD, not THC, the compound that gives the “high” associated with recreational use of the drug. GW’s approved epilepsy treatment Epidiolox racked up 2020 sales of over $500 million.
Of the drugs pipeline OCT is working on, a solid oral medicine currently named OCT461201 is furthest advanced and currently in pre-clinical testing with plans for early-stage clinical trials. It’s being tested for efficacy as a treatment for both irritable bowel syndrome and post-herpetic neuralgia, a complication that can result from shingles.
The Oxford Cannabinoid Technologies IPO is being advised by States Bridge Capital and Cairn Financial Advisers.