GW Pharmaceuticals (NASDAQ:GWPH), a U.K.-based company, is a biotech that has pioneered the medical cannabis field and is capitalizing on its first-mover advantage.
Founded in 1998, biotech veterans Dr. Geoffrey Guy and Dr. Brian Whittle worked closely with U.K. regulatory agencies in establishing necessary licenses and procedures to facilitate cannabinoid medical research. The first GW Pharmaceuticals clinical trials began in 1999.
By contrast, U.S. biotech companies…
still face multiple federal regulation hurdles in even primary medical cannabinoid research and clinical trials. Though many states have legalized cannabis, research and development remains limited until there is federal legalization.
“The doctor is the gatekeeper of the patient’s health,” Dr. John Taenzler, partner at market researcher Cannalytic Insights, told Axios. But “pharma’s got their hands tied.”
Since the first clinical trials in 1999, GW Pharmaceuticals has focused on distinct cannabinoid-based therapies for illnesses including epilepsy, glioma, and schizophrenia. The product pipeline is filled with products in various stages of development and regulatory approval.
In 2018, the U.S. Food and Drug Administration approved Epidiolex, a treatment for rare and medication-resistant childhood epilepsy conditions. It was the first FDA approved drug containing a purified drug substance known as cannabidiol (CBD) derived from marijuana. The medication does not contain THC, the ingredient that causes a “high.” The product was launched in 2018 and is available by prescription in the U.S.
When Evan Crudup was just 4, he suddenly lost all of his language and began to daydream (later identified as seizures). His mom, Nicole, watched her easy-going, happy child struggle both physically and emotionally rather quickly, eventually leading to a diagnosis of a rare form of epilepsy called Landau-Kleffner Syndrome.
Despite more than 10-plus medications to control his hundreds of seizures a day, it wasn’t until this year—four years after his initial diagnosis—that he found relief. The miracle drug his mother credits is Epidiolex, or Cannabinol, a CBD oral solution approved by the U.S. Food and Drug Administration in 2018 to treat various forms of seizures.
After a few months of being on the medication and finding the “sweet spot” of the correct dosing, Nicole says Evan’s seizures drastically dropped, and he began talking again.
“He is like a different kid,” she says. “He isn’t doped up all the time, he is talking and happy. It’s been amazing to see his personality blossom again.”
The long and winding road
Since Epidiolex was made available by prescription in November 2018, GW’s stock price has ranged between $90 per share to $196 per share. Its current share price is $121.
All analysts who cover it rate it a buy and the median consensus stock price target is $230. Second-quarter 2019 revenue totaled $72.0 million versus just $3.3 million for the second quarter of 2018.
Epidiolex sales have doubled each quarter since its introduction. Third-quarter 2019 earnings are due Nov. 5 and Wall Street expects them to be very good.
That’s a big difference between the current price, the 52-week high price, and target price. Did something happen…
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