GW Pharmaceuticals, PLC is a company that specializes in the researching, manufacturing, and commercializing of prescription medicines that are cannabinoid-based with controlled substances, and plant-based pharmaceutical products that meet the needs of patients in a wide range of therapeutic conditions. GW Pharmaceuticals is listed in the NASDAQ Global Market under the symbol GWPH. It is also listed on AIM, a market of the London Stock Exchange.
The biopharmaceutical company, based in the United Kingdom, maintains internal control over every aspect of the development process of their cannabinoid products, from botanical research and drug formulation, to clinical trials and regulatory affairs.
Ever since the company was founded in 1998, GW Pharmaceuticals has focused on bringing novel prescription medicines to the market, providing patients suffering from serious conditions with valuable medicines that would truly make a difference in their quality of life. GW aims to maximize the value of its products and shareholder returns through rapid economical product development, addressing the needs of the market, and creating commercial partnerships.
GW Pharmaceuticals strives to maintain its position as a world leader in cannabinoid science, as it has developed an international network comprised of the industry’s most established scientists over the years. In 2007, GW and Otsuka collaborated, paving the way for the substantial expansion of the company’s early cannabinoid research activities. The two companies have worked together to research on cannabinoids as potential treatments for disorders of the central nervous system. The company’s in-house program also researches cannabinoids being used as treatments for metabolic disorders such as Type 2 diabetes.
GW’s lead product is Sativex, a treatment for symptom improvement of patients suffering from moderate to severe spasticity due to Multiple Sclerosis. Sativex is currently recommended for approval or already approved for use in 24 countries worldwide. It is currently in Phase III clinical development as treatment for cancer pain.
GW Pharmaceuticals, PLC is licensed to work with controlled substances for purposes of medical research. It continues to focus on its product portfolio of cannabinoid-based medicines in order to meet the needs of patients in an extensive range of medical indications.
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Comparing GW Pharmaceuticals’ Returns to PeersGW PharmaceuticalsGW Pharmaceuticals (GWHP) is primarily into the development of cannabis-derived prescription medicines. Liquid cannabidiol (or CBD) is the leading product in the company’s
GW Pharmaceuticals (GWPH) has recently bounced after a solid earnings report. It also announced its phase-3 trial concerning its Epidiolex oral medicine, received positive results.The combination of the earnings beat and forward movement of Epidiolex, provide catalysts that should continue to drive GWPH stock price higher.The CatalystsRevenue in the latest reporting period ended March 31, 2019 came in at $39.2 million, far above the $3 million in revenue generated in the same reporting period of 2018, beating estimates by $23.33 million.Earnings for the quarter improved to a loss of $50.1 million, against the loss of $69.5 million year-over-year. Earnings per share was $-0.14, beating estimates by $0.07.Cash and cash equivalents fell from $591.5 million at the end of calendar year 2018, to $521.7 million at the end of the quarter.The second catalyst was the report of the company reaching another "primary efficacy measure with both EPIDIOLEX doses as compared to placebo." That was the "consecutive positive Phase 3 pivotal trial for EPIDIOLEX." The company is expected to file an sNDA in the fourth quarter of 2019.Net sales of Epidiolex in the quarter was $33.5 million, accounting for the majority of the revenue.Things to Consider for Current ShareholdersThere are a couple of important things to take into consideration with existing shareholders, including its share price and whether or not it can break out from its recent new highs.With its improvement with revenue and earnings, and its consistent positive news about Epidiolex, it would take a significant negative catalyst to reverse the sentiment in regard to the company, which suggests it may still have a lot of upward trajectory left.For that reason, unless shareholders want to take some profits off the table, it appears to be a low-risk play to maintain a position because the share price has a lot more room to run.Thoughts on Investors Looking to Take a Position in GWPHInvestors wanting to move quickly in and out of the stock would do better to wait to see if it drops below the recent breakout line before taking a position. Being a volatile stock, it would be best to wait for it to pull back and play the bounce if it comes.Spending is of particular concern, as the company projected operating expenses in a range of $395 million to $425 million for full-year 2019. It's almost certain that sales won't be able to cover those costs.The good news is at the end of the quarter the company had $521.7 million in cash, along with an additional $105 million it received from the sale of a review voucher in April.Even with rapidly growing revenue, increasing insurance coverage of the treatment, and its success in clinical trials, the company will continue to struggle to generate a profit in the near term. For that reason, investors wanting a stronger risk/reward metric, will probably stay away until the company shows it can generate a profit.One significant event that could be a powerful catalyst for GW Pharmaceuticals is if an European advisory committee gives approval this quarter for Epidiolex. If that's how it's plays out, patients with LGS and Dravet syndrome will have access to the treatment, providing a major boost in sales, and a quicker path to profitability; there already is pricing and reimbursement in place in key European markets Germany and France.With all the expansion and additional costs, management believes the $521.7 million in cash and cash equivalents should be enough to cover the next 12 months.ConclusionGW Pharmaceuticals continues to prove it has a lot going for it, with it continuing to grow Epidiolex revenue, expand its footprint, and lowering costs while it's doing so.Both revenue, earnings and Epidiolex are all moving in the right direction together, and that provides a bullish scenario that should continue to support and push up the share price of the company, even though I suspect there will be a correction in the near future after its share price has almost doubled so far in 2019.For long-term holders, it will be a chance to add more to your position and lower your cost basis.As the company stands today, I think the long-term opportunity outweighs the short-term, because of the price support and accompanying contracting price range the company will trade in on a daily basis when it's volatile.If you believe in GW and are in it for the long haul, there's really not much to do but hold on to your shares and ride the upward wave. I would be patient if you want to add to your position, waiting for the inevitable pullback.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on GWPH: * Analysts Have Chosen: GWPH, APHA and CGC Are Top Cannabis Stock Picks * GW Pharmaceuticals (GWPH): A “Blue Chip” Cannabis Stock to Watch More recent articles from Smarter Analyst: * Love or Hate Aurora Cannabis (ACB) Stock, That’s Where the Money Is * Micron's (MU) Tech Roadmap Highlights Flattening Cost Curve, Says Analyst; Reiterates Neutral on the Stock * Time to Cash Out on Cannabis Stock Canopy Growth (CGC) * Trade Tensions Bring Micron (MU) Stock Down, But Cascend Remains Bullish
Jim Cramer takes a look at his colleague and technician Tim Collins' interpretation of the cannabis sector.