Drug registration a linchpin in Creso Pharma’s penetration of animal health care market

Creso Pharma (ASX: CPH), a leading player in the global development of cannabis and hemp derived therapeutic grade nutraceutical products for humans and animals has, along with its partner Greveling Holding BV, been granted the first and unique European Union registration for two animal health CBD (cannabidiol) based nutraceutical products in a proprietary formulation in the category of animal feed for commercialisation in the global companion animal market.

These CBD nutraceutical products are unique and the first in the world to obtain registration with health authorities compared to unregistered competitor products sold via the internet.

This is a breakthrough development for Creso, particularly given the size and location of its addressable markets. In 2015 the global veterinary health care market was US$25 billion and this is expected to increase to nearly US$40 billion by 2021.

Importantly, Creso is well-positioned to export into European, Middle Eastern gulf region, and Latin American markets, with the European market alone valued at $8.37 billion in 2016.

The registration paves the way for Creso to sell the two products globally, following its application for a free sales certificate (for sales in Europe) and the impending application for a global import and export licence, with the company expecting to receive both these items by March.

However, Creso is still in its early stages and investors should seek professional financial advice if considering this stock for their portfolio.

Given the group’s strong pipeline of new products across animal and human health market segments (as outlined below), there are likely to be multiple share price catalysts for Creso in 2017 and 2018. It should be noted here that the two animal products listed below have already received regulatory clearance and will be launched to market well ahead of Creso’s initial indications.

European registration to assist Creso in achieving its global expansion strategy

Management believes this latest development will assist Creso in meeting its goal of capturing a substantial share of the global companion animal market with its CBD nutraceuticals, and a leading market share of the hemp derived animal health market worldwide.

Key markets being targeted by Creso are Europe, the Middle East, the Gulf Region and Latin America as it looks to establish a leading market share of the hemp derived animal health market worldwide.

Given the group’s products have been proven to provide a strong alternative to existing therapies and targets medical conditions such as behavioural disorders, pain, arthritis and inflammation, there is the potential to gain an early mover competitive advantage in new markets.

Management explained that the number of treatment options available to veterinarians is limited as they are often human therapeutics that are poorly adapted to animals.

By comparison, Creso’s CBD animal health nutraceuticals are specifically formulated for various companion animal segments and contain very low THC, the psychoactive components of cannabis, importantly at levels below legal thresholds.

Multiple applications across the endocannabinoid system

The endocannabinoid system is a unique control regulatory system in all vertebrates and is involved in the regulation of numerous physiological processes that affect many important functions.

The primary function of the endocannabinoid system is to maintain a stable internal environment despite changes in the external environment, as diseases and ailments often emerge when there is a deficiency or dysfunction of the endocannabinoid system.

The aim of Creso’s CBD veterinary nutraceutical products is to supplement deficient and unbalanced naturally occurring endocannabinoids with cannabinoids from the hemp plant.