ABOUT: CanaQuest Medical Corp is a Life Science/Pharmaceutical Company developing health products utilizing cannabinoid molecules and other botanical compounds (pharmaceutical grade). The Company is the industry partner for research and product development with Dr. Steven Laviolette, a professor and neuroscientist, and his 13 team members, at Western University. The Company’s research is focused on the use of cannabinoids for the development of novel pharmacotherapies for mental health, such as anxiety, depression, addiction, schizophrenia, and Post Traumatic Stress Disorder “PTSD”. CanaQuest has identified the regulatory pathways to obtain Drug Identification Numbers (DINs) for its two Master Formations: Mentanine®Rx and Mentabinol®Rx in Canada and the USA. CanaQuest will be selling both products through its wholly owned subsidiary, ADC BioMedical Corp, which was awarded a Cannabis Medical Sales, Import/Export License, from Health Canada under the Cannabis Act. Licenced GMP Contract Manufacturers in Canada and the USA, capable of formulating, processing, and packaging, have been selected for production and distribution. The Company won the Go Global Awards, 2019, “Business of the Year – Category of Life Science,” presented by the International Trade Council.
WSA: Good day from Wall Street, this is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Paul Ramsay, the President and Co-Founder for CanaQuest Medical Corporation. The company trades over-the-counter CANQF. Thanks for joining us today there, Paul.
Paul Ramsay: Juan, thank you for having me. Very much appreciated.
WSA: Yeah, anytime. So please start off by providing us there with an intro and overview of the company?
Paul Ramsay: Sure. CanaQuest is a life science pharmaceutical company that develops health products and we utilize cannabinoids extracted from the cannabis plant and other botanical compounds. We’re the industry partner for research and product development with Dr. Steven Laviolette, Professor and Neuroscientist at Western University, London, Ontario, Canada. Dr. Laviolette has 20 years of research experience in the field of mental health and cannabinoids and he oversees a team of 13 scientists. And what’s really spectacular for our company as an industry partner is that Steve has made two amazing discoveries which we refer to as master formulations. I’ll elaborate on these later on in the interview.
Now our formulated products are commercial ready and we plan to launch in Canada and the US in the first and second quarters of 2021. As well, being both products are backed by science and preclinical trials, we’re positioned to initiate the regulatory pathway to obtain approvals from the US FDA and Canada’s Food and Drugs Act to be approved for pharmaceutical drugs. And an important note that I would like to highlight is that our CBD based formulation has the same efficacy as a FDA approved drug at 10 times the lower dosage. And this would enhance the probability of a fast track to approval.
WSA: Great, and can you bring us up to speed there on some of the most recent news including the Mentabinol update?
Paul Ramsay: Yes, our most recent announcement on December 3rd , the formulation of Mentabinol was about, being published in the Journal of Neuroscience. This journal is a world leading peer-reviewed research neuroscience journal. This publication further validates the scientific development and credibility of a research and preclinical trials. The trials show that when the THC based formulation was combined with L-theanine, which is an extract from green tea, it protected the brain against the negative side effects that can result from straight THC consumption. In essence, this discovery will be a safer alternative for people who are taking THC for mental ailments, pain, as well as chemotherapy side effects. And this will also be a viable treatment to help address and alleviate the opioid crisis.
Our second formulation, Mentanine, a CBD based formulation works synergistically and has multiple times the efficacy compared to other CBD products in the market. It’s important to point out that CBD by itself is not effective for mental health. Basically, it doesn’t cross the blood-brain barrier, whereas our formulated product does. Preclinical trials have shown that Mentanine has equal efficacy as GW Pharma’s Epidiolex at 10 times the lower dosage as it goes through the blood-brain barrier. Epidiolex does not do this and I can elaborate on that a little bit later.
WSA: Yeah, that’ll be great. So what are some of the key trends that you’re seeing right now in this sector and how is CanaQuest positioned there to capitalize?
Paul Ramsay: Well…. the trends we have looked out are quite horrifying. Firstly, mental illness will cause the world $16 trillion by 2030, that’s trillion. And you look at different – we looked at different articles and a few research reports and the conclusion is that one in four people in North America lives with a mental illness. So this is very serious. It’s a pandemic in its own right. As an example, the economic burden for mental illness in Canada is estimated at over $50 billion per year and it’s growing substantially especially as a result of this COVID pandemic we’re in. Regarding cannabis, there is no science behind medical cannabis products per se. Today, medical cannabis products, they take a trial and error approach to treating symptoms and it’s very ad hoc versus following a scientific method.
So in all fairness to doctors’ positions and so forth, they have no guidance in prescribing the proper dosage. So we’re going to change that. As well, we’re going to secure regulatory approvals for rare diseases and as I mentioned earlier, we’re going to create pharmaceutically approved products. As well, we’re going to generate near term revenue by producing products for mental and non-mental illness based on our preclinical trial results. In essence we’re ready to produce and sell Mentanine throughout the states thus building our brand and position our company to sell Mentabinol, our THC based formulation in the US when cannabis, THC, is legalized for medical purposes at the Federal level. We believe this will happen in the very near future.
WSA: Yeah, certainly. And perhaps you can give a little bit more of a in-depth look at some of the products and the progress there as well as what the key milestones are here especially over the first half of 2021.
Paul Ramsay: Well thanks Juan. As I mentioned before, Dr. Laviolette has made these two amazing discoveries, which we refer to as master formulations. So Mentabinol as I mentioned is THC plus L-theanine formulation. It’s a safer alternative to any other THC product in the market. It addresses anxiety, depression, schizophrenia and post-traumatic stress disorder while protecting THC users from the negative psychiatric side effects caused by THC consumption. As well, we learned, as a result of these trials, is that Mentabinol reversed depression like symptoms related to schizophrenia. It completely blocked memory impairment, it completely blocked hyperactive activity and completely blocked gene vulnerability. And when I say, gene vulnerability, I’m referring that some parts of the population have this gene and if they take THC or if they consume THC for an extended period of time, they’re going to create irreversible damage to their brain. So that’s something that has to be looked into in a much more serious way.
Now our second formulation is Mentanine. This is a real life changer. Its Omega-3 compounds, DHA, EPA combined with the CBD molecules. These molecules, andboth the compounds are pharmaceutical grade with zero THC. So it’s non-psychotic. And it has an increased efficacy of more than 10 times as compared to other CBD productsproducts. As I mentioned before, the formulation works synergistically and attattaches to a receptor in the brain, in particular the PPAR receptor. The essential fatty acid compounds from the Omega-3s such as DHA and EPA,.push the CBD molecules through the blood-brain barrier and they go directly to the section of their brain that deals with emotion such as anxiety, depression, PTSD as well as addiction. So we believe this is going to be a real-life changer and it’s going to help an awful lot of people in bad situations, for the lack of a better description. CBD, as I mentioned before, is not effective for mental health because it doesn’t go through the blood-brain barrier. Our product is going to make a big difference as I highlighted before.
Additionally, there was a reduction in inflammation and Dr. Laviolette stated that this could be really beneficial for the treatment of pain. This is something we haven’t looked into as yet because Dr. Laviolette’s focus is on mental health. But we have plans in the works to do some preclinical trials in that domain. On top of that, it’s nice to have a formulated product, but delivery is very critical. Our process is sublingual and it facilitates bioavailability with up to 90% absorptionand uptake in approximately 10 minutes versus hours.
You asked earlier about future milestones and I’m trying to be as clear as possible on this. Firstly, the company has two regulatory pathways to market, pharmaceuticals via the US and Canadian FDA. The second pathway is medical cannabis products, under the 2018 US Farm Bill and the Health Canada Cannabis Act. This will facilitate near-term revenue. So those are the two pathways. Going back to the first pathway, pharmaceuticals, we’ve identified a route called the Break-Through Therapy designation. This will reduce the timeline for approval from the FDA or we believe it will.
We’re working with regulatory consultants, BioPharma Global out of Virginia and they deal with the FDA on a daily basis. They have given us proposals to start theprocess upon completion of our first tranche of funding. Dr. Tom Ng, the COO stated we could receive approval in approximately one year and that’s a short-term scenario. On top of that, the pathway has already been laid off by GW Pharmaceuticals, which developed Epidiolex. We’re just following the same pathway and they’ve done an incredible job from a regulatory standpoint. Epidiolex, which was approved by the FDA in 2018 achieved first-year revenue of $291 million. As you can see, the potential is quite significant.
Under our second pathway, we will sell Mentanine to patients in Canada and customers in the US through our e-commerce store as well as other distribution channels that we have in play. Additional revenue will be generated with international partners who have production facilities and have established distribution networks throughout Europe and other continents. I can comfortably and confidently say this because we have ongoing discussions with a few of these entities.
WSA: Yeah, and perhaps you can walk us through your background experience Paul and talk about who the key management team is, your background, and what your investment outlook looks like?
Paul Ramsay: Sure, thank you. CanaQuest was founded in 2008 as an algae company. We did an IPO and listed on the US OTCQB markets in 2014. We learned all about Omega-3 oils and compounds extracted from algae while wewere working with Professor Kirsten Muller in the biology building at the University of Waterloo. About three years ago, we were asked if we would consider extracting oils from cannabis. We didn’t know anything about this at the time. We researched the benefits of Omega-3s for our receptors and learned that most of us have receptors that are defective or not working. We hear a lot of people talking about CB1, CB2 receptors, the primary receptors for intake of cannabis. If they’re not functional, there is no effective cannabis treatment. We put together a presentation and we were introduced to Dr. Laviolette at Western University and Dr. Laviolette embraced our scientific approach and we signed a contract as the industry partner. From a management standpoint, I have a business degree and I have over 30 years of business development and management experience.
Behind that, I, along with Richard Rusiniak, CEO of our company, we co-founded our previous company called Cymat Technologies. We commercialized the aluminum form technology, we acquired from Alcan International Research in Kingston, Ontario and we took the company public. When we resigned in March 2002, Cymat was listed on the Toronto Stock exchange and had avaluation of approximately $200 million. So basically, we’ve done it before and we’re going to do it again. Richard is a mechanical engineer and he previously worked for the Ontario Research Foundation, known in some parts of the world as Ortech. He consulted on a multitude of projects including NASA’s Zero Gravity Program and the BiLevel Go Train Modularization Program. If anyone rides the Go Train, Richard was instrumental in part of that design. Ross Eastley, our CFO is a charted accountant and has experience in both private and public sector organizations. He has been a member of our team for 10 years and has been integral in our ongoing developments.
So basically, there are three of us, but we have a lot of support outside of this…….it’s not just the three of us. Our scientific and marketing advisory boards have been selected and it’s an ongoing building process. From an investment outlook standpoint, firstly, we’ve been accomplishing everything on fumes. We’ve been underfinanced, bootstrap financing and we’re able to accomplish everything that we’re discussing today. We hope and believe that we’ll be financed in the first quarter of 2021. Upon completion of our first tranche, we will list on a Canadian Stock Exchange and we’ll also up list in the US. Our business plan will be implemented with the intent of earning the right to list on NASDAQ. That’s where our sites are. By achieving our milestones, I’m confident our share price will be representative of the deserved value, which will be for the benefit of our shareholders.
WSA: Certainly. So once again, joining us today is Paul Ramsay, the President, and Co-Founder for CanaQuest Medical Corp, which trades over-the-counter CANQF. So, before we conclude here Paul, to recap of some of your key points here, why do you believe investors should consider the company as a good investment opportunity today?
Paul Ramsay: I have three points to answer this question, Juan. Firstly, our stock is extremely undervalued because very few investors know we even exist. The second point is after our comparative analysis to our other life science companies with valuations ranging from $40 million to $four billion, we believe, we are confident, our formulated products are the best in the world for mental and non-mental ailments. My third point is that our business model, having an exceptionally low burn rate ….and…. agility, enables our company to partner with premier organizations anywhere in the world. I think these three points speak for themselves. We can validate and back up these points.
WSA: Well, we certainly look forward to continue and track the company’s growth and report on your upcoming progress. And we like take to thank you for taking the time to join us today Paul and update our investor audience on CanaQuest—It was great having you on.
Paul Ramsay: Well, thank you, Juan. And I would like to thank you for giving me this opportunity to share our story with your listeners and happy holidays and happy 2021 to everyone.