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Aurora Cannabis to take C$1 billion in charges, cuts 500 jobs as CEO exits*

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Aurora Cannabis said Chief Executive Terry Booth will retire and Executive Chairman Michael Singer become interim CEO as the beleaguered marijuana producer announced C$1 billion ($752.79 million) in impairment charges on Thursday Feb 6, reports Reuters.*

The company also cut about 500 jobs, including about 25% of corporate positions.*

Aurora’s U.S.-listed stock fell 13% in after-hours trading. The shares were halted earlier on Thursday.*

Aurora expects impairment charges of as much as C$225 million on assets and as much as C$775 million on goodwill in the second quarter, it said. Net revenue will be between C$50 million and C$54 million, compared with C$54.2 million a year ago.*

Aurora also said on Thursday it had made amendments to its secured credit facilities, including removal of some covenants, giving it options to refinance at maturity. Analysts have warned the company may not be able to meet the covenants of a C$360 million loan due in August 2021.*

Aurora’s expenses in the most recent quarter were almost four times its sales, and it holds less than two quarters’ worth of cash and short-term investments.*

Singer takes the helm as Aurora faces criticism for its aggressive global expansion amid uncertain demand. Aurora has stopped estimating when it will become profitable after missing its own guidance.*

The executive change makes Aurora the latest in a string of Canadian cannabis companies, including Canopy Growth, Aphria, Supreme Cannabis and Sundial Growers to change leadership as soaring costs and disappointing sales prompt concern from investors sitting on billions of dollars in losses.*

Singer has been on the board of the Alberta-based company since May 2016 and was named executive chairman nearly a year ago.*

Booth, a co-founder of the company, will remain on Aurora’s board and will become a strategic adviser to the company, Aurora said, confirming an earlier Reuters story.*

“I don’t think we’re going to see some sort of major strategic change, because Singer has been involved with the company and they’re keeping Booth on as an adviser,” said Andrew Kessner, an analyst at William O’Neill in New York. “This is to signal to the market that they are making changes.”*

Aurora has begun a formal search for a permanent CEO, Booth said in the memo without providing a time frame, adding that details would be shared once the process is complete.*

Booth’s departure follows the abrupt exit of Chief Commercial Officer Cam Battley in December.*

* original article

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Tilray cuts 10% of workforce to reduce costs*

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Tilray Inc (TLRY.O) has cut 10% of its 1,443-strong workforce as part of a global restructuring effort to reduce costs, the Canadian cannabis producer said on Tuesday Feb 2, report Reuters.*

“By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry,” the company said in an e-mailed statement. “The tough decision to eliminate roles has not been taken lightly.”*

With costs that are multiples higher than revenues, Canadian cannabis companies face bleak prospects for turning profits as sales lag and investors flee the sector, analysts have warned.*

“I expect to see many (licensed producers) announce significant job cuts in the near future,” Jason Sandberg, research analyst at PI Financial, said by email. “Too many companies had been relying on capital infusions, which have dried up, and not internally generated cash flow.”*

Tilray’s adjusted quarterly loss before interest, taxes, depreciation and amortization in the September quarter tripled to $23.5 million, as sales and marketing costs spiked nearly five-fold. The company has said it expects to achieve positive EBITDA in the December quarter.*

Tilray shares closed up 5.2% in New York, compared with a 2% gain in the Horizons Marijuana Life Sciences Index ETF (HMMJ.TO).*

* original article

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Multiple sclerosis and muscle stiffness

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Ankylosing spondylitis

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NICE refuses GW Pharma’s cannabis-based Epidyolex for treatment-resistant epilepsy

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« The often distressing and life-limiting nature of these very difficult to control epilepsies mean that we should all welcome new treatment options. Cannabidiol is a promising treatment for people with these types of epilepsies. »

Meindert Boysen, Director of the Centre for Health Technology Evaluation at NICE

UK-based GW Pharma has suffered a setback in its home country after drug watchdog NICE chose not to recommend NHS reimbursement of Epidyolex (cannabidiol/CBD) in combination with clobazam for people with Dravet or Lennox-Gastaut syndrome (LGS), two forms of treatment-resistant epilepsy, report Pharmafile.com.*

Despite concluding that the combo therapy effectively reduced the total number of the most prominent seizure types associated with these conditions compared to standard of care, the institute pointed to the lack of definitive long-term efficacy data, given that trial data submitted covered just 14 weeks.*

It also voiced scepticism in the reliability of economic models provided by the manufacturer on the drug combo’s cost-effectiveness, arguing that they failed to adequately account for all key aspects that would affect those with treatment-resistant epilepsy and their caregivers and families.*

“The often distressing and life-limiting nature of these very difficult to control epilepsies mean that we should all welcome new treatment options. Cannabidiol is a promising treatment for people with these types of epilepsies,” commented Meindert Boysen, Director of the Centre for Health Technology Evaluation at NICE. “Even though the committee accepted that the evidence shows that cannabidiol with clobazam reduces seizure frequency, its long-term efficacy is unknown, and the committee was not convinced about the way the company had modelled the effect on people living longer or having a better quality of life.*

“Based on the evidence presented to it, the committee could not recommend cannabidiol with clobazam as an effective use of NHS resources. However, we are committed to working with the company to resolve the economic modelling issues identified by the committee, and to help them understand what they may need to do to mitigate the cost of cannabidiol to the NHS. Patients, carers and their families deserve no less.”*

A spokesperson for GW Pharma responded: “We are committed to working with NICE to address the technical questions it has raised, with the aim of ensuring patients can access the medicine on the NHS as soon as possible following regulatory approval. We remain hopeful that NICE will recommend cannabidiol oral solution at the end of its appraisal process.”*

The therapy was approved by the FDA in June last year under the slightly different moniker Epidiolex, while EU approval is expected by October this year following a positive CHMP recommendation in July.*

Matt Fellows*

* original article

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*** ndlr. : –.

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Otsuka, GW announce Sativex fails in Phase III cancer pain trials

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« While the results overall have been disappointing, and not necessarily wholly consistent with clinical experience, nonetheless they suggest that Sativex may have a useful role in the treatment of certain subgroups of patients with advanced cancer pain who have exhausted opioid treatments. »

Dr Marie Fallon, professor of palliative care at the University of Edinburgh

Otsuka and GW Pharmaceuticals cannabis-based drug Sativex failed to show superiority over placebo in two Phase III trials, report Pharmafile.com.*

The studies were testing Sativex (nabiximols) in the treatment of pain in patients with advanced cancer who experience inadequate analgesia during optimised chronic opioid therapy.*

In a previously-reported Phase III trial earlier this year, Sativex also failed to meet the primary endpoint in the additional two trials. The first involved 397 patients from the US, Mexico and Europe, and the second was conducted entirely outside the US and used a different clinical design.*

However, a pre-specified pooled analysis of patients across the two Phase III trials in the US did show a statistically-significant improvement for Sativex compared with placebo, with several secondary efficacy endpoints reaching statistical significance.*

In this study, the US was the largest single recruiting country and represented 30% of the overall trial population. The efficacy data from US sites alone showed more positive trends than those in non-US sites, which the companies say is consistent with data from the first Phase III trial and the Phase IIb trial.*

GW Pharmaceuticals and Otsuka say these more positive US results have led them to request a meeting with the FDA, to discuss the clinical relevance of these data and determine potential paths forward.*

Justin Gover, GW’s chief executive, says: “In light of the missed primary endpoint in the first trial earlier this year, these additional results are not a surprise. Nevertheless, we are encouraged by data across the trials which consistently show positive outcomes for US patients when analysed as a separate cohort. We believe that this finding may provide important guidance in determining the optimal target patient population for Sativex and look forward to a discussion with the FDA on a potential path forward.” *

Dr Marie Fallon, professor of palliative care at the University of Edinburgh and a principal investigator in the Phase III program, comments: “While the results overall have been disappointing, and not necessarily wholly consistent with clinical experience, nonetheless they suggest that Sativex may have a useful role in the treatment of certain subgroups of patients with advanced cancer pain who have exhausted opioid treatments.”*

“In particular, the US patients enrolled in this program showed a useful therapeutic benefit whereas results in European patients were generally not favourable. These US patients were less frail, hence the Sativex intervention was subjected to less ‘noise’, providing clearer results and valuable guidance in determining the optimal target patient population for Sativex. This is a patient population with a significant unmet need and I believe that this important observation for Sativex warrants further investigation.”* 

Sativex, usually used in the treatment of multiple sclerosis, was developed by GW with the Japanese company Otsuka acting as a licensing partner in the US. It was the world’s first plant-derived cannabinoid prescription drug.* 

Joel Levy

* original article

** image

*** ndlr. : –.