This ASX cannabis share just hit a milestone

The Botanix share price surged 20% higher today following the company's announcement of a milestone achievement but has since been sold off.

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The Botanix Pharmaceuticals Ltd (ASX: BOT) share price surged more than 20% higher in early trade after the company released an announcement regarding a milestone achievement.

What did Botanix announce?

Prior to the market's open this morning, Botanix reported that the company has completed a major milestone in the development of its BTX 15030 treatment. According to the company's media release, Botanix has successfully completed an End of Phase 2 meeting for BTX 1503 with the Food and Drug Administration (FDA).

Completion of the Phase 2 meeting allows Botanix to construct a drug development plan and registration for BTX 1503. The company is now preparing to start designing Phase 3 clinical studies. According to the announcement, the FDA noted the excellent safety profile of BTX 1503 and allowed for several waivers that are normally required for dermatology drug registration.

Progression of the BTX 1503 Phase 3 study will remain pending until the completion of the company's BTX 1702 clinical study and the lifting of COVID-19 restrictions. Due to the limitations imposed by the pandemic, Botanix does not expect large Phase 3 dermatology studies to commence until the end of 2020.

What does Botanix do?

Botanix is an ASX listed, synthetic cannabinoid company that develops pharmaceutical products through well-controlled randomised clinical trials. The company's cannabinoid development platforms encompass 2 separate segments; dermatology and antimicrobial products.

According to Botanix, the company's products utilise the unique, anti-inflammatory and antimicrobial properties of cannabinoids. Botanix currently has a pipeline of product candidates undergoing clinical trials.

The company's BTX 1801 is an antimicrobial product that is currently enrolled in a Phase 2A study and is designed to prevent surgical site infections. Following today's announcement, Botanix now has a drug development plan for its dermatology product BTX 1503 for acne treatment.

In its quarterly report released in late April, Botanix noted that restrictions associated with the COVID-19 pandemic have resulted in the delay and uncertainty of clinical programs.

Foolish takeaway

The Botanix share price was up more than 20% in early trade after hitting an intraday high of 6.5 cents. At the time of writing, however, the company's shares have been sold down and are currently trading flat for the day at 5.3 cents.

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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