Renew Biopharma Inc is a research company developing proprietary therapeutics to treat neurodegenerative diseases, traumatic brain injuries (TBI), and for pain management. CEO Mike Mendez provides an introduction to the company and explains its interest in developing treatments using biosynthetic cannabinoids. Mendez believes both the discovery of synthetic biology and the changing legal status of cannabis have created a “new frontier” of treatment development. Mendez describes Renew’s approach as “chassis agnostic” and reveals the company is more interested in developing specific therapeutics. Renew is currently producing cannabinoids and derivatives using microalgae and already has its first drug lead for the treatment of traumatic brain injuries. Renew’s focus on traumatic brain injuries meets a need in the medical space and Mendez notes that cannabinoids are a promising avenue because cannabinoid molecules can cross the blood-brain barrier. Mendez talks about the process for developing Renew’s research into FDA-approved medical treatments and highlights GW Pharmaceuticals (NASDAQ:GWPH) (OTCMKTS:GWPRF) (FRA:GW2A) for its leadership in the space.
Narrator: Renew Biopharma is a San Diego based synthetic biology company focused on creating pure, uncontaminated, and non-psychoactive cannabinoids to enable human therapeutic breakthroughs and improve human health.
The company relies on molecular biology and pathway engineering instead of using agriculturally-grown cannabis plants. Renew Bipharma plans to develop therapies for chronic pain management, Huntington’s disease, Parkinson’s disease, and concussion therapy.
James West: Joining me now is Mike Mendez. He’s the CEO of Renew Biopharma. Mike, welcome.
Mike Mendez: Thanks. Great to be here in Toronto.
James West: Yeah, you bet. What are you biopharming?
Mike Mendez: Well, you know, it’s big news on the streets: it’s cannabinoids.
James West: Right.
Mike Mendez: It’s new molecules. It’s kind of a new frontier. People now are thinking about ways to make cannabinoids, make therapeutic, make new molecules –
James West: THC?
Mike Mendez: Yeah.
James West: CBD?
Mike Mendez: But all kind of, maybe in a biotech play, in terms of it’s done through fermentation – so, outside of the plant.
James West: So this is one thing that I am curious about: fermentation qualifies as bioengineering?
Mike Mendez: Yeah, it does, in that sense. So it’s controlled.
James West: It’s the same way we make alcohol, isn’t it?
Mike Mendez: Yeah, it’s true, but it’s on a kind of controlled – there’s some control of it, and I think that’s kind of been, maybe, a real factor in focusing this, is one wants to make therapeutics, which is what Renew does. Our focus is really making therapeutics, and to do so, we need to do it in a controlled fashion.
James West: So therapeutics are, essentially, pharmaceutical formulations using the key molecules, the key compounds, from the different CBD array to target specific indications?
Mike Mendez: Yeah, and actually, beyond that. So the plant makes a lot of natural cannabinoids, and there’s a broad range of them, hundreds of them. But actually, you can make derivatives if you take those, move them beyond even that. You can actually modify them to actually be the real therapeutic value that you want. So it’s an untapped area. This is an area that a), scientists haven’t even looked at; there was legality issues, but also, it couldn’t be done outside of the plant. And so only recently, with kind of the discovery of synthetic biology, along with the legality, has now allowed this new frontier, this new area, to kind of emerge.
James West: So Renew Biopharma: what is your approach within this biosynthetic space? We’ve got different chassis, as we call them, or organisms, on which to propagate or express cannabinoids. So some of the chassis are yeasts, some are bacterial, some are algae, some are even methane. So what is your approach to this whole thing?
Mike Mendez: Well, you know, again, in some ways I guess we’ll use the term, we’re kind of chassis-agnostic. It really doesn’t matter which chassis we want to hook up; we’re more interested in which of these chassis make the molecules, the therapeutic set that we want to make. We have focused heavily on micro-algae because, in a lot of ways, you’ve got to think of, you have a plant, you want to go put that system into another plant. So it makes more sense to go from a cannabis plant into a micro-algae, which is a plant. So there’s advantages.
James West: Right. Where are you at with the whole evolution of this? Are you actually producing cannabinoids now, on micro-algaes?
Mike Mendez: We are. And in fact, we’ve gone much further than that; we make a lot of, we’ve already made derivatives. We already have our first drug lead; we’re focusing on traumatic brain injury, TBI, and the real factor for that, why we came into this space, is cannabinoids are privileged molecules. They get across the blood/brain barrier, as we all know. And that allows for the first time to actually go after neuroinflammatory diseases, neurodegenerative diseases, and even make a TBI treatment. So TBI, as you know, is a big deal in the States, and there is no way to solve that problem. But we think with cannabinoids, you’re definitely going to have an advantage to go and treat TBI.
James West: So how soon is it, then, till we see a Renew bioengineered traumatic brain injury product on the market?
Mike Mendez: So in some respects, if you’re going to go down this direction, it has to be treated like a new drug. So probably in the next three years, we’ll file our first IND, so you have to go through all the – this is an FDA approved drug, so it’s going to, the IND we’ll file in three years, probably follow that by more clinical trials, so there’s going to be a lot of rigour involved. And only for that is because we want to make medical claims. So this isn’t a nutraceutical; it’s a therapeutic.
James West: So would an analogous company be GW Pharma?
Mike Mendez: Yeah. So I think they’ve done such a great job in kind of pioneering the concept that you can find useful molecules out of the plant, right? They’re using it for epilepsy, again because they need to treat kind of a what you’d say, a brain injury, in that case. So it’s the same play, and the only difference is that they’re using whatever natural molecules that the plant makes. We use those natural molecules kind of as a direction to point to, so we’re using the framework of them, like that’s the direction to go; but we modify them to make them far more potent and have a far more drug ability.
James West: Wow. Okay, so tell me, it sounds like this is high science. It’s beyond rocket science; it’s real, serious stuff. So tell me about your bench strength.
Mike Mendez: Well, you know, again, what you’re seeing for the first time in this conference is there’s a whole different, I guess, school of people now entering the space. There’s a lot of – myself, I’ve been biotech for 30 years, I’ve been involved in a lot of start-up companies; this is my tenth start-up company. And you’re seeing now, I think, more of the biotech approach, which again entails raising a lot of money, hiring a lot of people, and there’s a real drive toward it. I think it’s a very different philosophy; you know, intellectual property comes to play. Understanding your markets in terms of what therapies you’re using. It’s becoming a lot more sophisticated in that sense, and it’s a new breed. I mean, you were at the conference; you saw the different players that were there. There were some, you know, fairly large companies, fairly small companies, a lot of innovation, but it’s an amazing time.
James West: Sure. The takeaway for me from the conference was that it doesn’t seem like the biosynthetic cannabinoids are going to threaten the cultivated cannabinoid industry anytime soon.
Mike Mendez: Yeah, but I would agree with that, and again, you know, we talk in terms of timelines, right? I think that there’s a group of people you saw at the conference who are very focused on trying to make large-scale production. So I think their focus, and I think maybe their timelines, are three to four years before they’re able to make large-scale production and get it down to the price metrics that the customer wants, and that’s a completely different timeline than maybe a company like Renew, which is developing drugs.
James West: Okay, right. Interesting. So then, what made you choose traumatic brain injury as your leading drug?
Mike Mendez: You know, a big driver, again, was the fact that when you look at treatments for TBI, even treatments for neurodegenerative diseases in general, most companies in the US, most large pharmaceutical companies, have failed. They just can’t get the molecule across the blood-brain barrier to make the treatments, so it’s an unmet need. So we felt this was a great advantage by using these molecules, and by doing so, we have a leg up. And we do have a leg up.
James West: Wow. So it’s almost like the ability of the science to treat traumatic brain injury could not advance until a molecule like cannabinoids came along to transport other compounds or modified compounds across a blood brain barrier?
Mike Mendez: Oh, well said, well said. Exactly that.
James West: I couldn’t repeat it if I tried. [laughter]
Mike Mendez: But you did sum it up well, which is, we wouldn’t be able to do this kind of science if the legality issues in California weren’t lifted in their frame. Once they were lifted, it allowed us to raise money, it allowed us to go after these molecules, but until then, all these treatments and all those molecules were held hostage. So that has made the biggest change from that perspective; it has kind of freed us to now go after things that no one had ever been able to go at before. And we feel pretty confident that there’s going to be a TBI treatment in there.
James West: Sure. My audience is almost 100 percent investors, so my next question is, how does the retail investor access a participation in this at this point, or if not now, then when? And also, how do the institutions get involved now – if not now, when?
Mike Mendez: Well, I mean, I think you saw a little bit at that conference. So you saw all forms of life there. You saw people who either have invested heavily in cannabis, the growing of cannabis, who want now to come back and double down; they want to have capability to go both directions. We have investors who are only interested in the therapeutics, so they only want to invest in the therapeutics, and you see all types of investors; people who are interested in a seed round, they just want to come in on a seed, and some of the companies, ourselves, we still have a seed round open. And then we’re raising – everyone there at the conference was raising money, so they were in their first A round or B round, raising money.
So now the time is, if you want to invest, now’s the time.
James West: Okay, send me subs.
Mike Mendez: Okay, it’s all good. Yeah, yeah!
James West: Great. So then, it’s a long evolutionary pathway, so obviously as an investor, even at the seed stage, you’re going to want to have a long horizon to realize the fullness of your investment. So this investment obviously isn’t for everybody; day traders come to mind.
Mike Mendez: Yeah, yeah, absolutely.
James West: [laughter]
Mike Mendez: There’s a lot of risk involved, as you say. It’s a long term play.
James West: Sure. And the other aspect that attracts me to the space, though, was that, so even yesterday, there were 12 companies out of a known total of 20 companies in the world pursuing this. And I thought, well, that’s going to be a very crowded space soon. But after listening to all of the speakers at the conference I realized, well, it’s not going to really be that crowded that quickly because it takes such a merger of scientific disciplines to come together under one particular management scheme and direction with an outcome in common, that it’s not the kind of thing that you could say Well, you know what? Let’s go start a mine, or drill an oil well, or grow a crop. You’ve got to invest a lot in the assembly of the manpower. So that was a bit of a relief.
But then, so, is this – should this be viewed by the investor as a longer term biotech play, then?
Mike Mendez: I think you have both setups. I think if you want to invest in Renew, it’s a long term play, and it’s more risky play, because we’re developing therapeutics. And some people, that’s exactly – they’re okay with the multiples, because you’re going to get that fairly large multiple on a drug, but it’s going to take longer term, and it’s going to take more investment. So there are investors who are okay with that.
Now, on the flip end, if that’s not your cup of tea, then more than likely you would invest in companies that want to make more of a commodity, whereas I think you could get a potential return in two to three years from that. So I think, where do you want to play, and how you judge your risk, you know? Because there is risk, and I’d say Renew, in some respects, has some of the greatest risks in terms of long term play, but has the greatest payout in terms of multiples.
James West: Right, perfect. All right, Mike, we’re going to leave it there for now. That’s a fascinating story. We’ll come back to you in due course, next time you’re in town, stop by.
Mike Mendez: Great. Is that a promise?
James West: That’s a promise. Thank you for joining us today.
Mike Mendez: All right. Yeah, yeah, thank you so much.
©2019 Midas Letter. All Rights Reserved.