The Food and Drug Administration (FDA), the Drug Enforcement Administration (DEA), and anti-cannabis activists like to claim that marijuana has no proven value as a medicine. Both the FDA and the DEA have resisted approval or funding for trials using actual marijuana.

If marijuana has no medicinal value, why are there three FDA-approved pharmaceutical drugs based on marijuana with usage histories dating as far back as 1985?

Cesamet

Cesamet is an FDA approved medicine for nausea and vomiting caused by cancer chemotherapy. The scientific name of Cesamet is nabilone.

Nabilone is a purely chemically synthesized drug that activates the cannabinoid receptor CB1. Cesamet duplicates the healing properties of delta-9- tetrahydrocannabinol (THC), without actually contain any of the constituents found in the Cannabis plant and cannot tap into the full-spectrum effects produced by whole plant cannabis medicines.

The FDA approved Cesamet in 1985 when the drug was made by Eli Lilly and Company. Lilly discontinued the drug in 1989. Valeant Pharmaceuticals acquired Cesamet from Lilly in 2004. Valent sold the rights to Meda Pharmaceuticals which was bought by Mylan NV (NASDAQ: MYL). Mylan trades just below its 52-week high at $46.90.

Besides the FDA approved uses for Cesamet, the doctors frequently prescribe the drug for off-label uses such as fibromyalgia pain, anorexia from AIDS, multiple sclerosis and neuropathic pain.

A one-month supply of Cesamet averages about $2,000 a month. Insurance companies extend coverage for all or part of the expense of Cesamet.

Cesamet has fallen out of favor with the spreading acceptance of medical marijuana and the development of newer drugs.

Marinol

Marinol (dronabinol) is a prescription drug derived from marijuana. It is frequently prescribed to relieve nausea and vomiting associated with chemotherapy. It is also FDA approved for use as an appetite stimulant for HIV-positive people with severe weight loss. While its uses are like those of medical marijuana, Marinol is legal in all 50 U.S. states.

When used to relieve the symptoms vomiting or nausea, Marinol is prescribed when the usual anti-nausea drugs such as Vistaril, Zofran, or Compazine are ineffective.

The use of Marinol has decreased significantly since the drug was initially used in HIV therapy in the late 1980s when the likelihood of HIV-related death was extremely high. Marinol was often seen as the only means to address HIV-associated wasting.

Today’s more efficient antiretroviral therapies allow those with later-stage disease to restore their immune functions. Patients may now address issues related to appetite and weight with the use of less expensive stimulants.

MARINOL is a Schedule III controlled substance because it contains dronabinol. Dronabinol is a synthetic form of Delta-9-THC, which is the chemical found in smoked marijuana that treats distressing symptoms related to appetite loss.

Marinol is officially approved by the FDA to treat the symptoms of nausea and vomiting related to cancer treatment and to increase appetite in people with anorexia or those with AIDS-related weight loss. Unofficially, Marinol has all the same off-label uses as Cesamet.

Depending on a patient’s diagnosis, a one-month supply of Marinol costs between $200 and $800. Insurance companies will cover most costs for FDA approved uses.

Marinol first obtained FDA approval in 1985. Today it is marketed by AbbVie Inc. (NYSE: ABBV). ABBV is trading at $100.34 which is less than $1.00 below its recently hit 5-year high.

ABBV is sometimes considered to be a relatively safe way to gain exposure to the cannabis industry. However, Marinol is only responsible for a small fraction of ABBV’s $25.6 billion in revenue. Humira is responsible for more than $16 billion in revenue and AndroGel accounts for slightly more than $1 billion. The remaining $9 billion in revenue is spread across 25 other drugs.

Marinol is facing increased competition that may reduce sales even more. Therefore, ABBV’s share price will see very little appreciation associated with the cannabis industry’s growth.

Syndros

A new liquid formulation of dronabinol was approved by the FDA. The new version of the drug is made by Insys Therapeutics Inc (INYS) which markets it under the brand name Syndros. Insys main product is Subsys, a fentanyl-based medicine delivered in spray form. Subsys is a super opioid 50 times stronger than heroin.

Syndros has the same approved uses as Cesamet and Marinol: anorexia accompanying weight loss in patients with AIDS, and cancer chemotherapy-induced nausea and vomiting.

Insys Therapeutics spent years developing Syndros. The FDA turned down Insys’s initial application in 2014. The company submitted a new form in 2015 and obtained FDA approval in July of 2016.

The liquid version of dronabinol is supposed to be faster acting and more comfortable to digest by nausea patients. Greater bio-availability offers physicians the choice of using more flexible dosing.

Original estimates of peak annual revenues of up to $400 million have been reduced by 25 to 50 % due to the DEA’s decision to classify Syndros as a Schedule II drug. The DEA felt that the potential for abusing an oral preparation combined with the possibility of turning the liquid into a vaping solution justified the tighter controls.

INYS currently trades at $8.84 which is 78% higher than the 52-week low on November 7, 2017, and 40% lower than the 52-week high on May 31, 2017. INYS has other cannabinoid-based drugs under development and is a possible pharmaceutical cannabis investment if you do not mind that most of its current revenue comes from the opioid trade.

Final Thoughts

Naysayers and government officials say that the approval of three THC based drugs does not indicate marijuana itself has any medical value. Two breaths later the same naysayers will extoll the evils of THC as the primary psychoactive ingredient in marijuana.

If marijuana has so little medicinal value, why has the FDA recently approved several other drugs for various stages of clinical trials while avoiding studies on the actual plant?

We will discuss these potential new drugs in part two.

The author has no direct investment in MYL, ABBV, or INSY. The author may have an indirect stake in MYL, ABBV, or INSY through ownership of shares of the Fidelity Select Biotechnology Portfolio (FBIOX).