PHARMA GETS HIGH RETURNS ON 'POT PILLS'

Pot in a pill? Not quite. But cancer patients desperate for relief
from the nausea and vomiting associated with chemotherapy are
increasingly turning toward synthetic cannabinoids.

And that's good news for the Montreal facility that manufactures
Cesamet, a drug that replicates the active ingredient in marijuana.

In a decision last week by the Food and Drug Administration, Cesamet
was approved for sale in the U.S., about 25 years after it was first
authorized in Canada.

The drug is made almost exclusively in Ville St. Laurent by Valeant
Pharmaceuticals International of Costa Mesa, Calif. (although it's
also produced by a different company in Britain).

Thomas Schlader, Valeant's general manager in Montreal, says FDA
approval means the plant can gear up to serve the large potential
market in the United States.

Valeant purchased Cesamet from pharmaceutical giant Eli Lilly in 2001
and has watched Canadian sales more than double each year. The drug
is expected to generate revenues of $18 million to $20 million this
year, he says.

The FDA decision could solidify the company's future in Montreal,
where 145 are employed.

Valeant - a mid-size pharmaceutical company with annual revenue of
about $800 million U.S. - has been closing and rationalizing
facilities around the world. The Montreal plant now has a brighter
future with what amounts to a world mandate to produce a drug with
significant growth potential. That could lead to more investment and
new products at the facility, Schlader says.

Aside from Cesamet, the Montreal plant produces about three dozen
branded and generic pharmaceutical products, largely for the Canadian market.

In Canada, where Cesamet has been sold since 1981, it has an
88-per-cent market share, according to the company. Two competing
cannabinoids are Marinol, made by Solvay Pharmaceuticals, and
Savitex, a mouth spray approved for treating pain associated with
multiple sclerosis.

The U.S. approval of Cesamet - the second such cannabinoid now
allowed in that country - is somewhat ironic. The FDA said last month
there's no scientific basis to approve the medical use of marijuana.
Yet soon after that decision, the agency authorized Cesamet, which
essentially mimics the marijuana ingredient THC, but without the same
kind of "high" that would come from smoking cannabis.

"There's been a lot of research on cannabinoids on a worldwide basis
and people have found they can be very useful in (treating) pain and
in other areas like post-traumatic stress," Schlader notes.

"The physician community, especially those working in the area of
pain, are always looking for products that will respond when nothing
else is working."

Yvon Beauchamp, a physician in palliative care and pain management at
Sacre Coeur Hospital, says that doctors are becoming more widely
aware of the medication's benefits.

While Cesamet is primarily indicated for nausea and vomiting in
cancer treatment, it's also effective in treating acute pain, he
said. "We have noticed that when taken in combination with morphine,
it can reduce anxiety and muscle spasms and facilitate sleep."

A pill has the additional advantage that patients can avoid the toxic
effects that come with smoking marijuana.

Ottawa has authorized the medical use of marijuana, but there are
still questions surrounding the suitability and consistency of the product.

In comparison, Cesamet is "a standardized product, so that's it's
always the same quality, it's always the same pharmo-kinetic profile
within the body. Physicians have confidence in this approach," Schlader said.

While it's difficult to gauge the market potential for Cesamet in the
U.S., he points out that the cannabinoid Marinol, already approved
south of the border, has reached sales of $160 million U.S.

It's estimated that half a million Americans each year receive
chemotherapy treatment and that 70 per cent experience nausea and vomiting.

Elsewhere, the drug has been approved in Argentina, and is in the
regulatory process in several other Latin American countries.