NanoSphere Health Sciences

Enhancing the Delivery of Cannabis and other Medications with Nanobiotechnology

This profile is part of a paid investor education campaign.*

Overview

NanoSphere Health Sciences (CSE:NSHS) is a nano-biotechnology company paving the way in the development of innovative delivery systems for cannabinoids, medications, nutrients and animal health. Built on a foundation of over 20 years of research and development, NanoSphere has designed a patented delivery system that increases the effectiveness and delivery time of cannabinoids (THC and CBD) by nanosizing the particles and transporting them directly into the bloodstream.

With the aim of further disrupting the medication delivery space, NanoSphere is also in the process of using its platform for additional nano-biotechnology solutions in the delivery of nonsteroidal anti-inflammatory drugs (NSAIDs) and nutraceuticals. NanoSphere’s delivery system makes particles easy to absorb and completely bypasses the gastrointestinal tract (GI) and respiratory system when cannabis is smoked, which can often cause adverse effects to the patient. NanoCanoids bypass first pass liver effect and avoids pre-systematic metabolism.

For its cannabis products, NanoSphere has developed a growth model that is based on developing partnerships with producers of high-grade cannabis extracts that have established distribution channels. Looking to build out this model, the company expects to enter into more agreements while it focuses on growth and on raising awareness on the alternatives to cannabis consumption.

In recognition of the innovative and disruptive work the company is doing, NanoSphere has been awarded the 2018 Frost and Sullivan Technology Innovation Award and was recognized by ACQ5 Global Awards as Company of the Year for Nano-Biotechnology, Innovative Company of the Year for Healthcare and CEO Robert Sutton was honored as Gamechanger of the Year.

“It comes as no surprise to us that our technology is being recognized for its market disruption,” said NanoSphere Chief Science Officer Dr. Richard Kaufman. “We are proud of our achievements so far in the nanoparticle delivery space and look forward to advancing our technology with new applications and new markets.”

NanoSphere is led by a management team with noted experience in its field. This includes Dr. Richard Kaufman, whose patents on delivery system nano-biotechnology have set him apart as a leader in the medical technology world. Management is also significantly invested in the company, holding 50 percent of shares with another 25 percent held by friends and family.

Company Highlights

  • Covered by U.S. Patent No. 10,028,919 and U.S. Patent No. 9,925,149, the NanoSphere Delivery System™ represents one of the most important developments for advancing the non-invasive and user-friendly delivery of biological agents in over 25 years.
  • Nominated for NCIA award for 2018 Excellence in Technology Award
  • Awarded the 2018 Frost and Sullivan Technology Innovation Award
  • Recognized by ACQ5 Global Awards as Company of the Year for Nano-Biotechnology, Innovative Company of the Year for Healthcare and CEO Robert Sutton was honored as Gamechanger of the Year
  • Developing growth model through partnerships with cannabis companies producing high-grade extracts and with established distribution channels
  • Company looking to use its technology to enter other industries including nutraceuticals, pharmaceuticals (NSAIDs) and animal health
  • Technology development led by Dr. Kaufman, leader in delivery system nano-biotechnology
  • Management team of industry experts, and board of directors holds 50 percent of shares
  • The company has signed agreements in California, Arizona, Indiana, Oregon and Canada.
  • Canadian subsidiary provides NanoSphere with international expansion opportunities.
  • The company intends to penetrate additional markets in the near term.

Problem to Solve

When it comes to the current delivery methods of cannabinoids, there are a number of factors that either impede the effectiveness of the drug or present adverse results to the consumer. For instance, when administered orally, only six percent of cannabinoids reach the bloodstream while the rest are dispelled as they traverse the GI tract. Oral consumption also presents significant delays in the onset of effects, with consumers having to wait 45 minutes to two hours. Lastly, due to both of the above factors, the consumption of cannabis edibles also presents the possibility for accidental over-administration.

nanosphere evolve application

When it comes to cannabis delivery through smoking, the issues presented here are a lack in standardized dosing—which is also a concern for medical professionals trying to prescribe cannabis—and the potential damage to the respiratory system caused by smoke inhalation.

Beyond cannabis, there are other medications such as NSAIDs that also present risks to the patient when consumed. In particular, according to an article published by Harvard Health Publishing, NSAIDs can have negative impacts on the GI tract and kidneys when ingested orally. The obstacles presented in the ingestion of cannabis and NSAIDs could be resolved by an enhanced delivery system, like NanoSphere’s, that standardizes dosing, enhances rapid absorption into the bloodstream and mitigates the risks associated with current delivery systems.

NanoSphere’s Delivery System

In its pursuit to improve the absorption of medicinal particles, NanoSphere has developed a delivery system that adjusts the size of cannabinoids from pharmaceutical-grade extracts and encapsulates them in all-natural, protective nanosized spheres (NanoCanoids™) that the body absorbs with ease. Having researched and determined the ideal particle size for absorption, NanoSphere has implemented a patented design that allows for rapid absorption through intraoral, intranasal or transdermal application. In this way, a high concentration of cannabinoids is directly absorbed into to the bloodstream, bypassing the dilutive effects of the GI tract, the liver and pre-systemic metabolism.

In implementing this technology, NanoSphere has decreased the onset time of effects to five to 10 minutes, making the particles much more impactful for consumers. Additionally, consumers are spared the adverse effects caused by smoking.

The company has developed two products, a topical THC-dominant Transdermal NanoSerum™ and a topical CBD-dominant Transdermal NanoSerum™ for localized relief of pain, inflammation and tension. The company has also developed Evolve NanoGelTM, an intraoral cannabis product that produces a similar effect to smoking, but is safer and more effective than ingesting edibles.

NanoSphere has enabled consistent and standardized dosing in its proposed products, making them convenient and easy to use. Additionally, the standardized dosing also makes it easier for doctors to prescribe cannabis to patients, as the effects are more practically measured.

nanosphere-product-1

nanosphere-product-2

Applications beyond cannabis

NanoSphere’s particle delivery technology has applications beyond the cannabis space as it is commercially applicable to the pharmaceutical, dietary (nutraceutical) and animal health industries. For the pharmaceutical space, NanoSphere has created a patented approach that uses its delivery system to encapsulate NSAIDs, making the drug particles easily absorbed into the bloodstream and thus less potentially harmful to patients.

NanoSphere believes that its technology will act as a disruptor to how cannabis, medication and other nutrients are consumed.

“Prescription and non-prescription medications administered by NanoSphere’s unique encapsulation process show improved bioavailability and more predictable blood levels,” said NanoSphere medical advisor Dr. David Theil. “The NanoSphere technology is also well-suited for transdermal delivery, a great advantage in the use of NSAIDs as well as THC products…I also believe that this technology could open the door for the use of a variety of other non-opioid medications which could greatly enhance our ability to effectively and safely manage pain.”

Growth Through Industry Partnerships

Partnerships

In order to deploy their products, NanoSphere has been exploring partnership opportunities with cannabis manufacturers across the US and Canada that can produce the quality of cannabis oils required. In identifying potential partners, NanoSphere is also ensuring that these companies have established distribution channels so that the availability of its products can grow quickly and efficiently within each state. Having already entered into several licensing agreements, the company expects to establish additional agreements and envisions that each of these partnerships will contribute positively to their bottom line. The reason the company has chosen to forge partnerships is to dedicate its resources to continued product development, thus leaving production and distribution to its partners.

nanosphere evolve

NanoSphere has entered into a partnership with Vertical™. As the largest integrated company in the legal medical cannabis industry, Vertical™ will launch NanoSphere’s Evolve Formulas product line in California and Arizona. Vertical™ is set to provide planning, permitting, development and operation of cultivation, extraction, manufacturing, distribution and retail facilities in both states.

“This partnership with Vertical™ represents an ongoing phase of growth for Evolve Formulas,” said NanoSphere CEO Robert Sutton. “Expanding into Arizona and California allows us to bring our advanced, cutting-edge technology to a broader range of consumers and patients as we look towards reaching a national and global audience.”

In Canada, NanoSphere has entered into a partnership with Delta 9 Cannabis INC. to bring Evolve Formulas products to the Canadian cannabis market. Delta 9 is a licensed producer of marijuana and operates an 80,000-square-foot production facility in Winnipeg, Manitoba, Canada.

“Delta 9 shares NanoSphere’s vision for bringing innovative and reliable products to market for recreational and medical consumers alike in the only G7 nation that has legalized cannabis for both purposes. This milestone furthers our momentum during a period of substantial company expansion,” said Sutton.

NanoSphere has entered into a revenue-sharing agreement to expand its Evolve Formulas product line to Indiana with Jeff DeHart, Managing Member of Evolve Formulas of Indiana, LLC. Under the agreement, NanoSphere will introduce a new, hemp-derived offering to the Indiana market.

“With a proven track record of success already under our belt, we are eager to forge a path into the Midwest with an exciting new product. Bringing our unique delivery system to the residents of Indiana will serve to not only educate the public on the extraordinary medical potential of hemp, but also set the bar for a high standard of hemp-derived products in this untapped market,” Mr. Sutton said.

NanoSphere signed a LOI with Cascade Pure, LLC, which will bring Evolve Formulas products to the Oregon medical and recreational cannabis markets. Cascade Pure, LLC will provide a state-of-the-art cultivation and processing facility located in Bend, Oregon. Their conceptual plan is designed around the Smart Grow Systems solutions, and will be modified to fit NanoSphere’s needs. Their proprietary building system revolutionizes indoor cultivation and processing facilities. NanoSphere plans to take this partnership into additional markets in the future.

“Like NanoSphere, Cascade Pure’s mission is to bring revolutionary solutions to the cannabis industry from seed to sale, making them an ideal partner fit. Together, we will drive innovation and set a new precedent for quality, safety and precision in cannabis-infused products,” said Sutton.

Nanosphere has teamed up with Gofire, a Denver-based healthcare startup, to launch their new DoseCode-enabled Evolve Formulas in Colorado. DoseCode is a branded QR code that’s attached to plant-based medical products found in dispensaries across Colorado.

Gofire’s app allows patients to access and save detailed descriptions, anonymous patient reviews and ratings, complete lab testing information and dosing recommendations by scanning the QR code on each Evolve Formulas product. Patients are also able to track their results, document their top-rated products and record dosage preferences.

“Powered by the groundbreaking NanoSphere Delivery System™, Evolve Formulas products deliver unparalleled results in precise and consistent dosages. Utilizing the Gofire DoseCode will enable Evolve patients to see firsthand our exceptional lab results and to track and build a reliable experience,” said Sutton. “Through our complementary technologies, NanoSphere looks forward to joining Gofire in educating patients on product selection and controlled dosing to help unlock the maximum therapeutic benefits of plant-based medicine.”

As it looks to the nutraceutical space as its next focus for growth, NanoSphere is also discussing potential partnerships with large players in that industry.

Financial projections

Assuming retail costs of $29.99 per 100 milligrams for intraoral products and $39.99 per 100 milligrams of the topical serum, NanoSphere anticipates that total revenues for the first year will be $6 million from license revenue and royalties, having entered the market in one state. This is followed by projections of up to $119 million after two years, having entered five states and up to $529 million after five years, having entered 20 states.

Cannabis Division

In November 2018, NanoSphere created its wholly-owned subsidiary NanoSphere Cannabis International (NCI) to take its cannabis assets to countries where medical or recreational cannabis is legal. The subsidiary will help foster the relationship between NanoSphere and Delta 9, who are submitting an application to Health Canada for a suite of products that provide safe and healthy ways to consume cannabis.

“The NCI operation is being formed in Canada to focus specifically on Canadian and Global opportunities available in the cannabis industry,” said Sutton. “Leaders in the industry from around the world look to companies in the Canadian legal market for guidance on regulations and product development. It is important that the NanoSphere delivery system be represented in these discussions to aid in our global expansion.”

Since forming NCI, NanoSphere has signed a LOI with Abba Import Export S.A. de C.V. to launch the Evolve Formulas product line in Mexico. Under the terms of the agreement, NanoSphere will export its cannabis product line to Abba who has an exclusive master license for NanoSphere’s cannabis products throughout Mexico. Additionally, the two companies will be collaborating on a production facility in Mexico for dried cannabis and extracts, among other cannabis products.

Management

Dr. Mark Percival—CEO 

Dr. Percival has extensive experience in the healthcare field across two continents and has led important innovations for more than three decades. Dr. Percival has become an inspirational leader and a very special resource in healthcare innovation and value-based care.

David Sutton—President, COO and Director

David Sutton received his MBA in finance from the Daniels College of Business at the University of Denver. He has a Bachelor’s Degree in economics from the University of Colorado. He previously consulted for CeeLite Technologies, an innovator and developer of new lighting sources where he got Apple to use their CeeLite’s technology in Apple products.

Richard Clark Kaufman, PhD—Chief Science Officer and Director

Richard Kaufman is the previous co-director of the Center for Biogerontology Life Extension Medical Clinic and research center in Los Angeles. He is a distinguished scientist, highly respected researcher, author and product developer. His patents on delivery system nano-biotechnology have distinguished him as a leader in the medical discovery world, including being the lead scientist in inventing the proprietary NanoSphere Health formulations. His PhD in BioNutritional Chemistry from the University of Brussels.

Terry Grossman, M.D. – Chief Medical Officer

Terry Grossman is the founder and medical director of the Grossman Wellness Centre in Denver, Colorado. He is a board-certified member of the American Academy of Anti-Aging Medicine as well as the American Holistic Medical Association. Dr. Grossman is a widely sought lecturer on longevity medicine throughout the US and has presented keynote addresses at anti-aging seminars in Japan, South Korea and South Africa, among others.

Victor Goncalves—Executive VP and Director

Victor Goncalves has nearly 15 years of experience in the financial markets as both an analyst and on the public issuer side. He was the top analyst at Harvard Management Fund ($8 billion) and has held several management and directorship positions in multiple public companies, having raised in excess of $30 million.

Bennet Liu—CFO

Bennet Liu has been the CFO of Corazon since 2017. He is also an officer of Brigade Resources Corp. and Secova Metals Corp.

Stephanie Hopper—Director

Stephanie Hopper is the co-founder of Root Technologies, a consulting firm of industry professionals helping build a sustainable cannabis industry. She was also the Chief Operating Officer of Ballpark Holistic Dispensary and cultivation facility from 2014 to 2016.

Michael Iverson—Director

Michael Iverson has over 30 years of success in the financial markets having developed and sold Niogold to Osisko mining. He was also the past president, CEO and founder of Fortuna Silver mines, which he was integral at building it to a Silver producer with a $1.5 billion market cap. He has a rounded career having worked both in the resource space and the technology sector. He is currently CEO of Volcanic Gold Mines.

Toby Lim—Director

Lawyer practicing corporate and securities law since 1998.


 

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