GW Pharmaceuticals (GWPH) is trading at a record high after first quarter results showed a strong launch of its cannabidiol drug Epidiolex. The oral solution became the first and only plant-derived CBD medicine approved by the FDA last June. Epidiolex treats patients with Lennox-Gastaut Syndrome and Dravet syndrome, two forms of debilitating childhood-onset epilepsy .
In late February, GW Pharma reported net sales from November 1st (launch date) through December 31st of $4.7 mln. Last night, the company reported first quarter net sales of $33.5 mln, more than doubling estimates. The company said that over 7,600 patients have received Epidiolex prescriptions since launch. Management is trying to keep expectations low, pointing to one-time benefits like the expanded access program transition, but pent-up demand for access to the drug and rapid and encouraging payor (insurance) coverage decisions bode well for the drug going forward.
The FDA confirmed 7 years of orphan exclusivity for Epidiolex, which has blockbuster potential given the pent up demand for this highly efficacious treatment of epilepsy that prevents seizures. Up until this year, cannabinoid products were illegal in the US. Epidiolex's competitive position improved last month when Zogenix (ZGNX) received a Refusal to File letter from the FDA for its efficacious seizure drug Fintepla.
GW Pharma expects a decision on the drug from European regulators in mid-2019. The company will be ready to launch in five major European markets by the end of the year.
What's more, the company also reported strong Phase 3 data for Epidiolex in the treatment of seizures associated with Tuberous Sclerosis Complex (TSC), a another rare and severe form of childhood-onset epilepsy. GW Pharma expects to submit a supplemental New Drug Application to the FDA for this indication in the fourth quarter. The strong quarter, but more so positive data treating TDC, caused analysts at Oppenheimer to upgrade the stock to Outperform this morning.
Looking at the company's pipeline, GW Pharma plans to starting a pivotal Phase 3 study for Sativex treating Multiple Sclerosis spasticity in the fourth quarter. The company is also exploring another cannabinoid CBDV in the autism and epilepsy population.
While there are now a lot of biopharma companies delving into the cannabis space, GW Pharma is the clear leader with the only FDA approved cannabinoid-based treatment. The company is based in the UK and has an enterprise value of over $5 bln. Some investors hope for a buyout in a biotech sector where M&A fuels growth for larger players in the space. The company is expected to turn a profit next year as sales more than double to over $360 mln. Revenue is expected to approach $1 bln in 2022.