Intec Pharma (NTEC) Stock Pops On Cannabis Collaboration

Intec Pharma Ltd (NASDAQ: NTEC) is screaming for the top in the market this morning, trading on gains of well over 100% early on. The gains started when the company announced that it has entered into a cannabis-centric collaboration with GW Research, an arm of GW Pharmaceuticals (NASDAQ: GWPH). 

Don’t forget, GW Pharmaceuticals is the first company to receive FDA approval for a cannabis-centric treatment in the United States. So, a partnership here is very exciting news. 

Here’s what’s happening:

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NTEC Announces a Cannabis-Centric Collaboration

What Is Intec Pharma?

Cannabis in Medicine Is Big Business

A Recent Push for Legalization Will Improve Access

Risks to Consider Before Buying NTEC Stock

Final Thoughts

NTEC Announces a Cannabis-Centric Collaboration

As mentioned above, Intec Pharma announced that it has entered into a new agreement with GW Research, an arm of GW Pharmaceuticals. 

In the press release, NTEC said that the agreement is a feasibility agreement. As a result of the agreement, the two companies will work to explore the Accordion Pill (AP) platform for an undisclosed program. 

In a statement, Jeffrey A. Meckler, Vice Chairman and CEO At NTEC, had the following to offer:

We are very excited to collaborate with GW. Through partnerships such as this, we continue to evaluate the utility of our Accordion Pill (AP) platform in the development of innovative therapeutics.

What Is Intec Pharma?

Intec Pharma is a clinical-stage biotechnology company that’s focused on the development of various treatments using a unique drug delivery platform, known as the Accordion Pill, or simply AP. 

The company’s AP technology takes advantage of efficient gastric gastric retention and releases the therapy to targeted areas of the body. In doing so, the company is working to improve both the safety and efficacy of currently available therapies and therapies under development. 

To date, the company’s technology is part of one Phase 3 clinical trial and three Phase 1 trials. Moreover, the company continues to research and look for collaboration opportunities to expand its pipeline. 

While NTEC and GWPH didn’t release any information with regard to the program they are working on together, there are a few clues:

  • First and foremost, GW Pharmaceuticals is the company behind Epidiolex, the first cannabis-centric therapy approved in the United States. The treatment is approved for severe forms of epilepsy, and has done well in the market so far. 
  • The AP technology developed by NTEC is designed to increase efficacy and safety of currently approved therapies as well as therapies under development. 
  • Intec Pharma has been relatively active in the THC, CBD, and other cannabinoids as a treatment space. 

Considering these factors, I believe that the collaboration is centered around combining Epidiolex with the AP delivery platform to further improve efficacy and quality of life for epilepsy patients. 

Cannabis in Medicine Is Big Business

The benefits of cannabis in medicine have been researched for some time. However, due to the taboo topic that is cannabis, this research largely flew under the radar until GW Pharmaceuticals and Epidiolex hit the tape. 

Since then, there have been several companies that are stepping into the space, trying to take their piece of the pie, and for good reason. 

The cannabis market is massive, and there’s a feeling among a large population of consumers that it is both, more effective and more safe, than currently available therapies for various ailments. 

As a result, there’s a boom coming in the cannabis as a therapy industry, and as that boom comes, those who get on the boat early will reap the benefits. NTEC seems to be one of those companies. 

A Recent Push for Legalization Will Improve Access

Recently, we’ve seen quite a bit of news surrounding the legalization of cannabis in the United States. In fact, the House of Representatives in the United States recently returned a vote for the approval of legalization of cannabis on a federal level in the United States. 

While prescription drugs don’t need to be legal for recreational use to be effective, in the R&D stage, especially in the case of cannabis-centric therapies, legalization will help in a big way. 

Ultimately, as the regulatory view of cannabis changes, the plant will become more available to researchers, which is great news for NETC and GWPH. 

Risks to Consider Before Buying NTEC Stock

It’s important to remember that no investment you make in the stock market will come without risk. Those risks are exacerbated when talking about clinical-stage biotech companies, or companies operating in a highly regulated market. 

With that said, Intec Pharma doesn’t come without risks. Some of the major risks to consider before making an investment include:

  • Capital Risk. First and foremost, clinical-stage biotech companies don’t actually have revenue-generating products on the market. As a result, they must survive on the cash they have in the bank. NTEC falls in this category. Should its bank account not be enough, it may move forward with an offering of common stock that dilutes current shareholders. 
  • Regulatory Risk. The biotech and cannabis industries are highly regulated in the United States. Therefore, in order for Intec Pharma to be successful, regulators need to be in line with the company’s vision. Should the company get a therapeutic option through all trials, it will be up to the regulators as to whether or not that therapeutic option will be able to be sold in the United States or in other regions around the world. 
  • Clinical Risk. As a clinical-stage biotech company, an investment in NTEC comes with clinical risk. Ultimately, clinical trials go wrong all the time, and if one of the company’s trials were to fail, it could lead to significant declines. 

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Final Thoughts

All in all, Intec Pharma stock is one to watch. The company has been working to develop THC and CBD-related therapies for some time. So, it only makes sense that the company would benefit from a partnership with the first company to get a cannabis-centric therapy approved in the United States. 

Ultimately, this partnership has the potential to yield therapeutic options that may drive significant revenue. That’s exciting news for investors. 

Nonetheless, while excitement is high, it’s important that investors consider the risks before making any investment! 

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