Medical Marijuana Offers Versatility and Care
With a market cap of $969 million, GW is the mj market veteran around since 1998 and public since 2001. It closed at $57.71 per share on Thursday, up 534.87% from the beginning of May. This seasoned lion of the pot space is 100% focused on prescription cannabinoid medicines and has a unique bent not just on THC but on CBD (the component of marijuana thought to be the most beneficial for health). The company has fantastic patents on its delivery mechanism and great distribution partners with companies like Novartis and Bayer.
Total revenue for the three months ending on December 31 was $12.4 million, compared to some $7.1 million the previous year, and following an offering of American Depositary Shares (ADSs) on the Nasdaq Global Market ending last month, GW raised total gross proceeds of $101.1 million into its growth war chest.
Sativex, approved in 25 markets world-wide, is GW's much-ballyhooed drug, now FDA-vetted and expected to roll out stateside in 2015--though it has not yet received final approval. This is the truest arrow in the company's quiver with potential to continued to disrupt the medical marijuana market.
"GW Pharma's lead product, Sativex, is very different from Marinol (dronabinol), which is synthetic THC," said Alan Brochstein, founder of 420 Investor , a marijuana stock subscription service. "Sativex, which is created in a standardized process from specific cannabis strains (real plants) with a consistent ratio of cannabidiol (CBD) and THC, has a specific delivery mechanism (oromucosal spray) and little or no psychotropic side effects. "
The delivery mechanism and the cannabinoid content differentiates Sativex from other medicinal applications of the narcotic or its ersatz impostors.
In his January 13 analyst report for Canaccord, Ritu Baral reiterated his buy position and raised the price target to $65 on increased confidence in the GW cannabinoid platform.
"We think Sativex could be a key add-on Tx [therapy] for moderate/severe cancer pain and expect Ph3 data due mid-2014 to be positive," Baral wrote. "We estimate peak sales in the U.S. and E.U. of $2+B."
There are also untapped applications for this drug, with the opportunity for Sativex to be used in multiple sclerosis spasticity, for which it is already approved in the EU.
To boot, the future looks bright, with the company's Epidiolex marijuana drug (which treats epilepsy) given FDA orphan status: that means it has seven years of exclusivity to test the drug in clinical trials. A one trick pony, this company is not. This drug is set to hit market in 2019 and there are plans for the company's expansion in anticipation of Sativex U.S. approval and pediatric epilepsy trials.