Header image from GW Pharmaceuticals
I highlighted Trulieve as one of the few cannabis stocks to trust in this trying time for the industry, but GW Pharmaceuticals is another stock in the cannabis space to keep on your watch list.
GW Pharmaceuticals has its foot both in the cannabis and pharmaceutical world, and often benefits from cannabis rallies, while also doubling as a safety net during leaner times – like right now. The maker of Epidiolex still has the most revenues in the cannabis industry with $91 million for the quarter ending in September (and a 26% increase from the previous quarter – plus, the company cut operating losses from significantly to only $18 million last quarter), and now the company has some good news across the Atlantic that could push sales even higher.
Epidiolex and Epidyolex
Epidiolex has been approved in the European Union, but the EU still has a way to go for CBD-based medicines, even for such rare forms of epilepsy. That said, Epiodyolex (different spelling across the pond) will be launching in France, Germany, Spain and Italy over the next year. Now, this month, the company announced England, Wales and Northern Ireland are all cleared to use the drug. While Europe is still growing in its acceptance of CBD, the UK is a big believer in Epidiolex.
The company’s groundbreaking purified and synthetic form of CBD has been well covered across the industry and broke through as the first cannabis derivative to receive FDA approval for seizure patients based on studies in over 2,000 patients with Dravet Syndrome and Lennox-Gastaut Syndrome. Those trials were so impressive that Epidiolex was given schedule V drug status, which is its least restrictive qualification enabling patients to face zero barriers in refills beyond a doctor’s orders. To compare, similar CBD chemical formulations Marinol, used to treat chemotherapy-induced vomiting, and Syndros, the liquid form of Marinol, are categorized as Schedule III and Schedule II drugs, respectively.
Of course, even with this groundbreaking drug – and even possible uses for Epidiolex in treating opioid use disorder and the company expects to submit for U.S. approval of Epidiolex in treating tuberous sclerosis complex early next year – the company is still not quite profitable. The company announced a net loss in the third quarter of $13.8 million, or $0.04 per share (analaysts estimates were $0.85 per share for Q3). But, this is a huge improvement from the year prior as the company lost $0.23 per share.
Pleasing Wall Street
“We see significant opportunity for the short, medium, and long term and believe that all the fundamentals are in place to make Epidiolex a very successful brand,” CEO Justin Gover said in the Q3 results. “We can expect to see additional momentum from Europe as well as the launch of the Tuberous Sclerosis indication during 2020. On top of this, GW is ideally placed to consolidate its leadership in cannabinoid science through advancing several mid and late-stage pipeline programs in the months ahead.”
However, many on Wall Street were not jumping for joy on these results nor Gover’s words as many analysts were hoping for more. Jim Cramer noted that GWPH has been dragged down by its placement in cannabis ETFs. All that said, Epidiolex is a proven treatment for epilepsy and more treatment uses are coming in 2020. It might only be a matter of time before Wall Street analaysts have their cake and eat it too with GW Pharmaceuticals.
Equities Contributor: Stephen L. Kanaval
Source: Equities News