Will GW Pharmaceuticals (GWPH) live up to the hype?

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August 1, 2019 10:39am NYSE:MJ

NYSE:MJ | News, Ratings, and Charts

From Eric Bowler: GW Pharmaceuticals (GWPH) has been a strong player within the medical marijuana sector, but with their August 6 earnings release around the bend, many investors are wondering if they’ll live up to the hype.

Shares have GWPH stock have trended upward since last November, following the U.S.-commercial launch of Epidolex, the first cannabis-derived drug for the treatment of patients who experience certain types of seizures.

The drug first received FDA approval in June 2018. And the U.S. Drug Enforcement Administration has labelled the drug as having a low abuse potential, as it contains less than 0.1% of tetrahydrocannabinol (THC), the psychoactive compound that gets people high.

During the past several months, GWPH has seen a solid increase in patient enrollments for their medicine, in addition to a large number of physicians recommending the drug in their prescriptions.

New patient enrollments in the first quarter were as high as 4,500 for

Epidiolex, and by the end of March that number was up to a total of 7,600 patients since the drug’s launch. Analysts are anticipating a high level of market penetration to continue throughout the second quarter as well.

Additionally, many payers have already made a coverage determination for Epidiolex. For example, Express Scripts has deemed the drug as a preferred brand in its national formulary.

Good news from across the pond

Last week the company received more positive news from the European Medicines Agency’s Committee for Medicinal Products for Human Use (a.k.a. CHMP).

The panel recommended approval of Epidiolex for use as adjunctive therapy for seizures, bringing GWPH one step closer to opening up the European market. The European Commission is expected to make a final decision on the regulatory application in approximately two months.

If the approval comes through it will open the doors for GWPH to market the drug in 28 EU nations, plus Liechtenstein, Norway and Iceland. The company predicts that treatment will launch in 2020 with initial sales of around $80 million, with European sales peaking at about $500 million.

Their flagship product

Epidiolex has been shown to benefit patients two years and older who experience seizures associated with Lennox-Gastaut syndrome (LGS), tuberculosis sclerosis complex, and Dravet syndrome (when used in conjunction with clobazam).

The drug is an oral solution containing highly-purified cannabidiol (CBD) featuring an innovative biochemical interaction. It earned GW Pharma $33.5 million in sales during the first quarter of 2019.

GW Pharmaceuticals is vertically integrated, growing its own cannabis supply in specially-designed greenhouses based in the United Kingdom. The company has a strict focus on maintaining genetic uniformity within their plants, which eventually become processed into liquid CBD.

“We are excited by the potential to bring patients and physicians a rigorously tested and evaluated cannabis-based medicine with a documented safety and efficacy profile, manufactured to the highest standards and approved by a medicines regulator,” says CEO Justin Grover.¬†

The analysts are weighing in

Cantor Fitzgerald analyst Elemer Piros says CHMP opinion is positive for GWPH, noting that the label inclusion of clobazam is not likely to hinder prescriptions in the EU, given the high unmet medical need for treating these ailments.

The positive Phase 3 data reported from GWPH also bodes well, the analyst says. Cantor Fitzgerald gives an Overweight rating to GW Pharma at a $229 price target.

On August 6, 2019, analysts are projecting earnings of -$0.13 per share, which would represent year-over-year growth of 89.68%.

GW Pharmaceuticals PLC ADR (GWPH) was trading at $163.50 per share on Thursday morning, up $1.20 (+0.74%). Year-to-date, GWPH has declined N/A%, versus a 12.56% rise in the benchmark S&P 500 index during the same period.

This article is brought to you courtesy of ETFDailyNews.com.

About the Author: Eric Bowler

eric-bowlerEric Bowler is an accomplished journalist providing in-depth insights for more than two decades. Over the past several years his focus has been on the marijuana industry, with a special interest in cannabis growth stocks. His daily coverage of the industry keeps him on top of the key trends with the goal of helping investors make well-informed decisions.

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