Agricultural engineering company Evogene Ltd. (NASDAQ: EVGN) has announced the establishment of a new subsidiary, called Canonic, to develop next-generation medical cannabis products.
Keep in mind that while Evogene may be small ($58 million market cap), it has strategic collaborations and licensing agreements with some major companies, including Monsanto and Bayer.
Evogene has been evaluating the medical cannabis field for more than a year, including market evaluation, obtaining governmental approvals for its research program and the establishment of a research facility, technology assessment and initial product line planning.
Canonic’s initial activities will focus on creating improved cannabis varieties by addressing the current developmental roadblocks of yield, stability and specific metabolite composition.
These development efforts will be based on the utilization of Evogene’s broadly applicable leading Computational Predictive Biology (CPB) platform, which has in the past demonstrated success in addressing similar objectives for other crops.
Although the cannabis market is growing rapidly, the firm notes that it is well recognized that next-generation products will need to address the current limitations of low metabolite yield (causing high costs for patients), low variety stability (causing inconsistent products that have become unreliable as a medical treatment) and uncertainty in connecting cannabis metabolite profile to specific medical indications.
The indications that the company aims to address are post-traumatic stress disorder (PTSD), severe chronic pain and cancer.
Dr. Arnon Heyman, Canonic CEO, commented:
Having led Evogene’s Ag-Seeds division for the past few years, I am proud to now lead Evogene’s cannabis activity as Canonic’s CEO. Evogene’s cutting edge genomic technology, alongside our multidisciplinary team of professionals, uniquely positions Canonic to bring to market the most advanced, stable and consistent next-generation medical cannabis products, and I am confident we can make a significant impact in the world of medical grade cannabis.
Shares of Evogene were last seen up 35% at $2.33, in a 52-week range of $1.67 to $3.46. The consensus price target is $8.00.