DeFloria said Monday that the Federal Drug Administration has stamped the firm’s application to begin a Phase 2 clinical trial for AJA001, an oral cannabinoid drug being made to treat symptoms of autism spectrum disorder.

The company, which was formed in 2023 as a joint-venture among Charlotte’s Web (OTCQX: CWBHF), Ajna BioSciences and British American Tobacco (NYSE: BTI), plans to start the trial by mid-year 2025. BAT holds an equity stake through 200,000 preferred units following an initial $10 million investment, with Charlotte’s Web and Ajna each holding 400,000 voting common units.

“IND submission for AJA001 and the initiation of the Phase 2 study in the US mark a historic moment in our mission to develop a systemically absorbed botanical drug therapy that meets guidelines established by the FDA for advanced clinical testing,” DeFloria CEO Jared Stanley said in a statement.

The planned 12-week study will test the drug on 60 adolescents and young adults with autism, ages 13-29, to establish dosing levels for future larger studies.

AJA001 was made using Charlotte’s Web’s hemp genetics and contains full spectrum hemp extract with cannabidiol (CBD) as the primary ingredient.

According to DeFloria, autism affects as many as 1 in 36 children and represents a $4 billion market in the U.S. that’s growing more than 4% annually. Current treatment options are limited to just two approved drugs – antipsychotics that often cause side effects and compliance problems.

“There is strong data supporting the potential efficacy of cannabinoids to treat autism spectrum disorder, offering what we hope will be a safer and more effective therapy than what is currently available,” said Orrin Devinsky, MD and Chief Medical Advisor for DeFloria.

The drug’s development builds on the foundation of Charlotte’s Web’s origin story.

“For more than 15 years, my family and our team have been laying the foundation for this botanical drug,” said Joel Stanley, CEO of Ajna BioSciences and Chairman of DeFloria’s Board. “Charlotte Figi’s story, shared by Dr. Sanjay Gupta on CNN, put the benefits of cannabinoids on the world’s radar and sparked a movement.”

Charlotte’s Web CEO Bill Morachnick emphasized the significance of this milestone in extending the company’s leadership “from the consumer sector into the regulated medical sector.”

DeFloria also plans to conduct a separate pediatric study of AJA001 in Australia in 2025.

DeFloria announced Thursday that its experimental cannabis-based drug for autism spectrum disorder showed positive early results, with patients tolerating the treatment well across multiple dose levels.

The drug, AJA001, being developed as a multi-compound hemp extract with a full spectrum of cannabinoids, demonstrated safety at daily doses up to 660 mg when given twice per day, according to results presented at a neuropsychopharmacology conference in Phoenix. The Phase 1 trial included 70 healthy volunteers ranging from 19 to 55 years old.

“We are extremely encouraged by these results,” Marcel O. Bonn-Miller, Ph.D., chief scientific officer at Charlotte’s Web Holdings Inc. and DeFloria board member, said in a statement. He noted that the drug achieved blood concentration levels matching or exceeding existing cannabis-based medicines like Epidiolex.

The Colorado-based company, formed in April as a joint venture between Charlotte’s Web (OTCQX: CWBHF), Ajna BioSciences and British American Tobacco (NYSE: BTI), aims to help address a significant unmet need. About 1 in 36 children may have autism spectrum disorder, according to recent CDC data cited by the company. BAT holds an equity stake through 200,000 preferred units following an initial $10 million investment, with Charlotte’s Web and Ajna each holding 400,000 voting common units.

Common side effects included drowsiness, anxiety, dizziness and headaches, DeFloria reported. One participant receiving a higher 906.4 mg dose experienced anxiety that resolved within a day.

The drug combines multiple cannabinoids from hemp plants, including carefully controlled amounts of CBD and THC. The trial results support testing doses containing up to 395 mg CBD and 15 mg THC daily in future studies.

“Currently available treatments for ASD are not well tolerated, making patient compliance a challenge,” said Jared Stanley, DeFloria’s CEO.

The company is preparing to submit the Phase 1 trial data as part of its Investigational New Drug application to the FDA. If approved, DeFloria plans to explore the drug’s potential for addressing behavioral symptoms and improving quality of life for individuals with autism spectrum disorder in two Phase 2 trials starting in the second quarter of 2025.

The treatment uses hemp extract from Charlotte’s Web’s proprietary CW1AS1 cannabis strain. If successful in later trials, AJA001 could become one of the first FDA-approved botanical drugs derived from hemp for autism spectrum disorder.

“DeFloria’s Phase 1 results validate our strategic vision of advancing botanical science through pharmaceutical pathways,” said Bill Morachnick, CEO of Charlotte’s Web. “This milestone demonstrates how our proprietary genetics and expertise in hemp cultivation can create significant value beyond our core wellness business.”