Our client is a preeminent medical cannabis company that was founded in 2012 and launched a successful IPO in 2019 at a valuation of $1.35 billion. They have operations in 15 different jurisdictions in the US and the European Union (EU) and offer a diverse range of medical cannabis products. Their competitive advantage lies in one, the pharmaceutical quality of their products, which provides for consistent, repeatable dosing for their patients and two, their partnerships with leading research and clinical organizations to establish the efficacy and safety of medical cannabis.
Challenges & Actions
The client was looking for ways that they could ramp up US growth and extend their global reach. Bridge Point Capital was brought on board to provide financial advice and operational guidance on their market strategy.
Our primary goal was to help them obtain third party reimbursement for medical cannabis through our proprietary network of providers and payers, both public and private.
We’ve had meaningful conversations with third-party administrators (TPAs) and self-insured employer groups who have interest in adding medical cannabis to their health benefits plan. We built an algorithm that demonstrates to each targeted payer, the Quality Adjusted Life Year (QALY) improvements in their population group that could be achieved as well as the cost savings associated with coverage of medical cannabis.
We have also assisted with the company’s mandate of expanding their global reach. We provided both financial and strategic advice in the company’s interactions with a large government payer. We participated in calls between the two parties and constructed a thorough pricing analysis of the client’s products for the meetings.
Federal Status of Marijuana
While the medical use of cannabis is approved in 33 states and the District of Columbia, it is still regulated as a Schedule I controlled substance by the US FDA. As such, the FDA considers that marijuana offers no medical benefits and has a high risk for abuse. This position seems to be softening, however, especially as the US Congress has recently voted to make it illegal for the federal government to restrict state laws enabling the prescribing of medical marijuana.
Our strategic consulting services have included finding different avenues that our client could pursue to increase their scale given the complicated legal landscape of medical cannabis. We proposed several different options for our client, tackling not the Rx formulary initially, but instead focusing on hospital/medical coverage by substituting medical cannabis for opioids when patients leave the hospital or outpatient facility after a surgical procedure. We are also working with a large, integrated healthcare delivery system to enable medical cannabis to be prescribed for almost a dozen unique diagnoses.
Bridge Point Capital is a private equity firm based in New York with a focus on U.S.-China cross-border investment. We invest in disruptive late-stage healthcare companies that can benefit from penetrating the vast yet unexplored Chinese healthcare market. We aim to leverage our expertise in both healthcare and capital markets to establish a sustainable investment platform for our investors.