Inside Cardiol: Acute Myopathy, Heart Failure, COVID-19, and Beyond

Cardiol Therapeutics (RSX:CRDL, OTCQX:CRTPF) is a biopharm company with a focus on the production of pharmaceutical cannabidiol (CBD) products. Cardiol’s products are specifically formulated to treat various forms of heart disease — they are currently developing innovative therapies to treat acute myocarditis and other causes of heart failure.

Analysts are calling Cardiol the next GW Pharmaceuticals following the commercial success of GW’s leading product Epidiolex. Epidiolex, an oral formulation of purified cannabidiol used to safely treat seizures in patients as young as two years old, was the first cannabis derived medicine to be approved by the FDA in the United States. Cardiol intends for their leading product CardiolRx to become the Epidiolex of cardiovascular disease.

CardiolRx, is designed to be the safest and most consistent cannabidiol formulation on the market, as well as the purest and highest concentration available. CardiolRx is pharmaceutically produced, Current Good Manufacturing Practice (cGMP) certified, and is THC-free (under 5 ppm) meaning it does not cause any psychoactive side effects.

By leveraging their extensive expertise in pharmaceutical cannabinoids, Cardiol is working to develop proprietary formulations for commercial development in two important areas of the medical cannabinoid markets. The first is commercializing a line of pharmaceutical cannabidiol products to satisfy demand in the growing market of medical cannabinoids, and the second is developing nanotechnologies designed to deliver cannabinoids and other anti-inflammatory drugs to the heart for the treatment of inflammatory heart disease.

As current leaders in the Canadian medical cannabinoid market, Cardiol strongly believes their new class of cannabidiol products will set new industry standards for product purity, traceability, dosimetry, and consistency.

Market Opportunities

The Canadian Cannabis Market

The Canadian medical cannabis market currently sits at a $1.2 billion valuation. Currently, the 65+ age bracket is the fastest growing cannabis user group in Canada. This age group also requires more variety of THC-free products as THC can lead to unfavourable drug interactions, delirium, instability, and other side effects in elderly patients.

There is also a need for THC-free medical cannabis for patients under the age of 25. The Canadian Paediatric Society states that THC use during adolescence can cause damage stemming from functional and structural changes to the developing brain. MRIs have shown structural changes in youth who use THC regularly; they show lower brain volumes, different folding patterns, thinning of the cortex, less neural connectivity, and lower white matter integrity. 

Because CardiolRx contains less than 5 ppm THC, it is virtually THC-free and earns a 0% THC classification. This product also lends itself well to use in these age brackets where the demand for THC-free cannabis products is increasing rapidly.

The Global Pharmaceutical Industry & Cardiovascular Drug Market

The global pharmaceutical industry has been around much longer than the legal and medical cannabis industries, and therefore is a much larger market — global pharmaceutical spending is predicted to hit $1.5 trillion by 2023 according t0 human data sciences company IQVIA. A sub-sector of this industry is the market for cardiovascular drugs which is projected to reach USSD $63.96 billion by 2026 (up from $47.29 billion in 2018).

Expansion Opportunities in Europe and Latin America

Cardiol’s commercialization of CardiolRx in the Canadian medical cannabinoid market (currently valued at $1.2 billion) is currently in the works with future plans to expand into the European and Latin American markets.

The European medical cannabis market is expected to reach USD $2.3 billion by 2024. As such, Cardiol has plans to expand their operations into the European market leveraging the pure CBD benefits of their product to become a secure distributor for the key markets of Germany and the UK.

Market estimates place the Latin American medical cannabis market at a USD $600 million by 2023. Cardiol is currently in the process of developing a partnership deal with a leading pharmacy chain in Latin America. Future plans include the potential to sell CardiolRx as an OTC product.

Partnerships & Distributions

Cardiol has several partnerships and agreements in place to ensure successful commercialization of CardiolRx upon completion of research and development and clinical testing periods. The company continues to attract world class talent and mainstream partnerships.

Shoppers Drug Mart

At the end of the 2019 fiscal year, Cardiol entered into an exclusive supplier agreement with Shoppers Drug Mart, a chain of well-known and trusted pharmacies with 1,300 locations across Canada. Cardiol plans to see three different strengths of CardiolRx (100mg, 50mg, and 25mg) available from Shoppers in the third quarter of 2020.

Dalton

Dalton is a Health Canada approved, FDA registered, cGMP manufacturer of pharmaceutical cannabinoids. Cardiol has worked with Dalton for over 20 years; they currently have an exclusive global manufacturing agreement for Dalton to supply pharmaceutical cannabidiol products to support research and development programs with plans for future commercial development.

Purisys/Noramco

Purisys, an affiliate of Noramco, is an ingredient and solutions provider of CBD and other cannabinoid-based ingredients. Cardiol is in partnership with Purisys for the manufacture and supply of pure pharmaceutical CBD for Canada and Mexico. Purisys will supply large-scale amounts of pure pharmaceutical cannabidiol to support Dalton’s manufacturing program.

Medical Research and Applications

Cardiol is heavily involved in the development of innovative methods to treat heart disease and other inflammatory conditions. They are currently focused on three main areas of medical applications for their products: acute myocarditis, heart failure, and COVID-19.

Acute Myocarditis Orphan Drug Program

Acute Myocarditis is an inflammatory condition of the heart that is most often the result of a viral infection. If left untreated, it can progress to dilated cardiomyopathy and heart failure; it remains one of the leading causes of sudden death in children and young adults.

Acute Myocarditis is currently eligible for US and European Orphan Drug Status. Orphan drugs typically obtain high reimbursement levels and the potential for fast tracked regulatory development and approval. For example, GW Pharmaceuticals entered Phase 3 clinical trials for their cannabidiol-based medication Epidiolex in 2015 for the treatment of two orphan conditions in children. Their product was fast-tracked by the FDA to treat newborns with epilepsy, and in 2018 became the first cannabis-based prescription medication to be FDA approved.

A clinical trial for CardiolRx in treatment of Acute Myocarditis is in the planning phase, and orphan status brings the potential for quick and explosive growth. Cardiol’s clinical trials will be conducted at highly respected and reputable medical research centers in North America and Europe.

These locations include:

• The Cleveland Clinic, a non-profit academic medical center in Ohio with a nationally ranked cardiology program

• The Mayo Clinic, a world renowned medical center highly specialized in complex heart conditions

• Houston Methodist DeBakey Heart & Vascular Center, a world leader in heart treatment and the home of North America’s first heart transplant 

• The University of Ottawa Heart Institute, Canada’s largest cardiovascular health center

• The University of Pittsburgh Medical Center, a $21 billion integrated global nonprofit health enterprise 

• McGill University Health Center in Montreal, one of Canada’s largest medical institutions

• Chartité Universitätsmedizin in Berlin, one of Europe’s largest university hospitals and frequently ranked as the top hospital in Germany

Heart Failure

Heart failure is one of the leading causes of death and disability in North America as well as the leading cause of hospitalization. It is also one of the most expensive diseases with healthcare costs exceeding $30 billion annually in the United States. Over 6 million adults in Canada and the US suffer from heart failure and the high mortality rates associated with it; 30% of heart failure patients die within one year, and 50% die within 5 years. Cardiol hopes to change this — the company is in the process of developing a new approach to the treatment of heart failure that uses proprietary nanoformulation of cannabidiol to directly target inflammation in the heart.

There is massive market potential in this space as there have been no significant developments in the field of diastolic heart failure in at least 20 years; change and advancements are desperately needed. A competitor to Cardiol, biopharmaceutical company MyoKardia is currently successfully completing Phase II of clinical trials for their product Danicamtiv. The successful completion of this clinical trial saw MyoKardia’s value quadruple in a little less than three months. CardiolRx promises similar results, and therefore the potential for exponential growth in a short time span.

COVID-19 Application

Covid-19 represents a new cause of myocardial injury resembling Myocarditis. Research shows that COVID-19 patients with cardiac injury and past cardiac complications have a higher mortality rate than those without. Patients with cardiac injury are also more likely to experience COVID-19 complications and require medical ventilation.

Currently, Dexamethasone is used to treat inflammation in COVID-19 patients. Dexamethasone is a toxic steroid with powerful anti-inflammatory properties that can help to reduce mortality in COVID-19 patients, but the toxic properties of the drug make its use very hard on the body — Cardiol hopes to intervene with the use of their drug CardiolRx to prevent the need for use of Dexamethasone.

A new application for CardiolRx as a preventative drug in COVID-19 damage presents itself — because cannabidiol protects the heart in models of cardiovascular disease, there is a therapeutic potential for pharmaceutical cannabis use in the treatment of COVID-19 patients with cardiac injury. This means that CardiolRx could be beneficial in preventing the need for ventilation in patients with pre-existing heart conditions and cardiac injury. With over 9.64 million COVID-19 cases confirmed globally, and new studies emerging daily suggesting that COVID-19 can cause heart injury even in people without underlying heart issues, the need for a heart-targeting anti-inflammatory like CardiolRx continues to grow exponentially.

Executive Team 

Cardiol’s executive team encompasses a wealth of research and development experience and advanced manufacturing capabilities. Their Management Team, Board of Directors, and Scientific Advisory Board is made up of 18 individuals — business and thought leaders with decades of industry experience between them, extensive expertise in the commercialization of proprietary drugs, and over 100 clinical trials conducted amongst them.

David Elsley

Cardiol’s President and CEO David Elsley has nearly 30 years of experience in financing development and management of biotechnology corporations and high-growth organizations. In 1990, he founded Vasogen Inc., a biotech company with a focus on research and development of novel therapeutics in the treatment of heart failure and inflammatory conditions.

Eldon Smith

Cardiol’s Chief Medical Officer Eldon Smith has been in the field of cardiology for over 40 years. Previously holding positions as Head of Cardiology and Dean of Medicine at the University of Calgary, he was also Editor in Chief of the Canadian Journal of Cardiology for 13 years.

Chris Waddick

Cardiol’s Chief Financial Officer Chris Waddick has over 30 years of experience in financial and executive roles in the biotechnology and energy industries. He formerly worked with Vasogen Inc. as the Chief Financial Officer, and Chief Operating Officer.

Thomas Moffatt

Cardiol’s Chief Commercial Officer Thomas Moffatt has an extensive background in corporate mergers and acquisitions, franchise, corporate retail and consulting. He has considerable experience in the pharmaceutical sector after a 20-year tenure with Shoppers Drug Mart.

Anthony E. Bolton

Cardiol’s Director of Research Dr. Anthony Bolton has published over 100 research papers and is listed as the named inventor on over 15 issued patents. He has been in the field of medicine since graduating from the University of London in 1967. He was a co-founder, Director of Research and CSO of Vasogen Inc.

Andrea B. Parker

Cardiol’s Director of Clinical Affairs Dr. Andrea Parker is a senior executive with over 30 years of experience in the biomedical and medical device fields, specifically in the execution of Phase I-IV research programs, and clinical trials for cardiovascular disease.

Anne Tomalin

Cardiol’s Director of Regulatory Affairs Anne Tomalin has practiced exclusively in regulatory affairs since 1971, and has a strong background in business, government, regulations and reimbursement policies.

Blagoja Ristevski

Cardiol’s Director of Chemical Engineering and Manufacturing has over 25 years of senior executive level experience in the Canadian pharmaceutical and biotechnology industries. He has worked with several biopharmaceutical companies in the research and discovery of active drug molecules, drug delivery technologies, and manufacturing methodologies for finished drug products.

Dolly Kao

Cardiol’s Intellectual Property Counsel Dolly Kao has over 20 years of experience with several leading IP firms in Canada. In addition to her work as an intellectual property lawyer, Ms. Kao is also a registered patent agent, and a registered trademark agent.

Steve Grasso

A recent addition to Cardiol’s executive team, Steve Grasso, is well known as a CNBC Market Analyst, and is a regular investment commentator on the program “Fast Money.” As an advisor to Cardiol, he will assist in raising the company’s profile within the US investment community. Having worked in the NYSE since 1993, Mr. Grasso will help to accelerate the recognition of Cardiol’s true market potential, and the value of the company’s equity.

Steve is an extremely valuable asset to the Cardiol Advisory Team. With his considerable high-level connections at the Nasdaq and the SEC, Steve will be vital in helping to prepare Cardiol for an up-listing on the Nasdaq later this year. His highly respected reputation and extensive connections inside these regulatory bodies will help immensely in expediting Cardiol’s approval process.

With his comprehensive understanding of US equity markets, Steve will be able to directly share insights and knowledge with Cardiol’s Executive Team and Board of Directors, as well as providing feedback on the company’s financing strategies. His direct involvement with Cardiol sends a powerful signal to the investors as a whole, and provides important validation and endorsement of Cardiol’s potential as a publicly traded company.

Conclusion

In June 2020, Cardiol closed their most recent round of financing for $17.25 million. The closing of this financing places Cardiol in a strategic position to address significant issues and opportunities in healthcare by continuing their medical research, and moving their products towards commercial development.

There has never been a better time to invest in medical cannabis as prices are low and demand continues to increase rapidly. Additionally, there is always a demand for pharmaceuticals, and now, in the midst of a global pandemic, lifesaving medication is needed more than ever.

In a world where health and health care has never received such a high profile, Cardiol Therapeutics, whose market cap is listed at USD $55 million, is an investment opportunity which separates itself from the crowd. Will this distinguished company grow up to be the next GW Pharmaceuticals, the pharmaceutical cannabinoid leader valued at $4.5 billion? Or maybe it is destined to become the next MyoKardia, an industry leader in new therapies for heart disease, valued at $5.2 billion? What will Cardiol be worth if its COVID-19 approach becomes the new treatment protocol for COVID-19 patients with pre-existing heart conditions, and increasingly those with damage caused by the virus? 

The time to engage is NOW.