Aussie pharma development company Algorae Pharmaceuticals (ASX: 1AI) has partnered with HL Pharma, an Australian company registered with the Victorian Department of Health, for the sourcing, supply, and distribution of various cannabinoid compounds for research purposes. The collaboration is governed by a comprehensive three-year agreement, adhering to Good Distribution Practice (GDP).

Under the terms, HL Pharma will manage the importation, storage, supply and distribution of a range of under-studied alternative cannabinoids (not CBD or THC) for research, in conjunction with pharmaceutical compounds. These compounds will integrate into ongoing research programs conducted by Algorae’s research partners, La Trobe University and Monash University.

Algorae is a pharma company that specialises in producing drugs for “unmet medical needs”, such as Parkinson’s and dementia. It does so not only through clinical studies but also drug discovery using artificial intelligence. 

This is highlighted in its original agreement with HL Pharma, dated December 28, 2023. It specified that the less-explored alternative cannabinoids would be used to boost the predictive functionalities of Algorae’s artificial intelligence platform, AlgoraeOS. While this AI platform is designed to offer predictive capabilities across all pharmaceutical drugs and therapeutic molecules of interest, its distinguishing feature lies in its specialisation in cannabinoid and cannabinoid combination drug targets, setting it apart from other AI-powered pharmaceutical platforms.

In H1 FY24, Algorae made moves to further enhance AlgoraeOS. In collaboration with the University of NSW (UNSW) and CSIRO, it joined the Next Generation Artificial Intelligence Graduate Program. The agreement involves UNSW recruiting three PhD candidates supervised by AlgoraeOS lead investigator A/Professor Fatemeh Vafaee. These candidates will contribute to developing the AlgoraeOS, with funding shared between CSIRO (two-thirds) and Algorae (one-third) over a three-year scholarship term.

Globally, the AI drug discovery market is set to be worth over $19 billion by 2032, a nine-fold growth over its value in 2023. AI will enable quicker and more comprehensive drug development, helping companies tap into solutions for medical ailments that are challenging to address. 

The HL Pharma partnership will specifically explore two cannabinoid-based combination drug candidates, AI-116 and AI-168, targeting dementia and cardiovascular disease. 

Monash University will undertake an extensive range of pre-clinical studies to assess AI-168 in various cardiovascular models. The World Health Organisation (WHO) reports that cardiovascular diseases take about 18 million lives every year, demanding a better infrastructure to discover solutions. The agreement with Monash, signed in November 2023, expects to reveal results in stages over the next year. 

These findings will guide future research steps and may lead to new patents, fitting Algorae’s strategy to create valuable intellectual property that aligns with its commercial goals.

For the HL Pharma partnership, extensive pre-clinical studies will be conducted, comparing its drug candidates to existing commercial therapeutics to establish their preliminary economic potential. The initial engagement is set for three years, and either party can request a review and amendment of the agreement before the scheduled three-year review period.