GW Pharmaceuticals Archives - Green Market Report

Editors Note: This story is reprinted with permission from Streetwise Reports.

Biopharmaceutical firm GW Pharmaceuticals Plc (GWPH:NASDAQ), which utilizes its proprietary cannabinoid product platform to develop and commercialize new medicines across a broad range of disease areas, and global biopharmaceutical company Jazz Pharmaceuticals Plc (JAZZ:NASDAQ), announced that the companies have entered into a definitive agreement for Jazz Pharmaceuticals to acquire GW Pharmaceuticals.

The companies stated that “the combined company will be a leader in neuroscience with a global commercial and operational footprint well positioned to maximize the value of its diversified portfolio.”

The report advised that the agreement terms provide that Jazz will acquire GW for $220.00 per American Depositary Share (ADS) for $200.00 in cash and $20.00 in Jazz ordinary shares, which equates to a total purchase price of $7.2 billion. Both companies respective Boards of Directors have already unanimously approved the transaction, which is expected to close in Q2/21. The companies advised that the offer price represents about a 50% premium over GW’s $146.25 closing stock price on February 2, 2021. The firms indicated that the transaction remains subject to approval by GW shareholders, other customary closing conditions and various regulatory approvals including sanction by the High Court of Justice of England and Wales.

GW is a large manufacturer and marketer of new regulatory approved therapeutics created from using its proprietary cannabinoid product platform to address a wide range of diseases. GW’s lead product, Epidiolex® (cannabidiol) holds the distinction of being “the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA).”

In addition to Epidiolex, the company’s product pipeline includes nabiximols. The company is presently active in Phase 3 studies for these potential drugs and is investigating and seeking FDA approval for use in the treatment of spasticity associated with multiple sclerosis and spinal cord injury. The firm also is developing earlier-stage cannabinoid product candidates for autism and schizophrenia treatment applications.

GW Pharmaceuticals CEO Justin Gover commented, “Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline. We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs…We have a shared vision of developing and commercializing innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first. Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”

Jazz Pharmaceuticals’ Chairman and CEO Bruce Cozadd remarked, “Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business. We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities…Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients.”

For Jazz Pharmaceuticals, the benefits of acquiring GW is that this will serve to add a third high-growth commercial franchise: that enhances product diversification in its key areas of addressing sleep disorders, oncology and epilepsies. Specifically, the GW acquisition will build upon Jazz’s growing neuroscience business by adding Epidiolex which offers near-term blockbuster potential. The company noted that within two years after commercial launch, Epidiolex now brings in around $510 million in annual sales.

Jazz Pharmaceuticals is a global biopharmaceutical company headquartered in Dublin, Ireland. The firm’s portfolio of medicines and product candidates are concentrated in the areas of neuroscience such as sleep and movement disorders and oncology including hematologic malignancies and solid tumors. JAZZ serves patients in greater than 90 countries and has market cap of approximately $9 billion.

GW Pharmaceuticals is a biopharmaceutical company that uses its proprietary cannabinoid product platform to develop novel medicines to address unmet medical needs in a broad range of disease areas. The firm’s Epidiolex oral solution has been approved in the EU for adjunctive treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome in conjunction with clobazam in patients two years and older and is under EMA review for the treatment of tuberous sclerosis complex (TSC).

GW Pharmaceuticals began the day with a market capitalization of around $4.6 billion with approximately 31.18 million shares outstanding and a short interest of about 8.3%. GWPH shares opened 47% higher today at $215.00 (+$68.75, +47.01%) over yesterday’s $146.25 closing price and reached a new 52-week high this morning of $217.50. The stock has traded today between $212.15 and $217.50 per share and is currently trading at $212.88 (+$66.63, +45.56%).

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Ahead of the 38th Annual J.P. Morgan Healthcare Conference on Tuesday, GW Pharmaceuticals plc (Nasdaq: GWPH)released preliminary, unaudited net product sales for the fourth quarter and full-year 2020 and key priorities for 2021.

GW Pharma said it expects total net product sales to be approximately $148 million for the fourth quarter and approximately $526 million for the year ended December 31, 2020. The company said that total net product sales of Epidiolex are expected to be approximately $144 million for the fourth quarter, comprising $129 million in the US and $15 million ex-US. The company reported that Epidiolex’s net product sales were $137 million in the third quarter of 2020.

In a company statement published on Monday morning, GW Pharma said that total net product sales of Epidiolex for the year ending December 31, 2020, are expected to be approximately $510 million compared to $296 million in 2019. Cash and cash equivalents at December 31, 2020, were approximately $486 million.

“Epidiolex sales increased by over 70% in 2020 despite the challenges of COVID-19, reflecting the positive impact this medicine has on patients as well as the performance of our commercial team. We remain encouraged by our patients’ experience with this product, as demonstrated by high persistence and refill rates. This, combined with our expansion of payer coverage and the recently approved Tuberous Sclerosis Complex indication, leads us to expect continued strong growth in 2021 in both the US and Europe,” said Justin Gover, GW’s Chief Executive Officer. “Our goals in 2021 include driving further Epidiolex growth and advancing multiple US pivotal trials for nabiximols in the treatment of MS spasticity, with the first data readout expected this year. In addition to our previously announced pipeline activities, we are leveraging our world leadership in cannabinoid science to design and synthesize novel cannabinoid molecules and expect our first novel product candidate to enter the clinic in 2021.”

The stock was rising slightly in premarket trading on the news. Four analysts cover GW Pharma and have an average price target of $182. The stock was lately selling at $128, which is below its one year high of $144.

The company also outlined the following priorities for the coming year:

EPIDIOLEX commercialization:

• Continue to drive revenue growth in US and Europe:
  • Execute on TSC label expansion and continued penetration in Dravet and LGS
  • Build further on expanded payer coverage achievements
  • Accelerate adoption across a broader prescriber base
  • Increase penetration in long-term care segment
  • Continue launches in Germany and UK and achieve successful pricing and reimbursement, and launch execution in France, Spain and Italy, as well as other European countries
  • Obtain approval of the Tuberous Sclerosis Complex indication in Europe
• Supplement existing 14 Orange Book listed patents (expiry 2035) with additional use patents, and obtain grant of the Epidiolex “composition” patent
• Commence pivotal trial in fourth target orphan epilepsy indication

Nabiximols in the US:

• Continue recruitment of two ongoing pivotal MS spasticity trials and commence three additional pivotal trials in MS spasticity
• Achieve data from at least one pivotal MS spasticity trial in 2021
• NDA submission expected following first positive pivotal MS spasticity trial
• Commence clinical program to expand future label to include spasticity associated with Spinal Cord Injury

Additional pipeline:

• Continue recruitment of ongoing Phase 2b study of a cannabidiol formulation for the treatment of schizophrenia
• Conduct placebo-controlled trials with both CBDV and CBD in autism
• Advance NHIE clinical program utilizing an intravenous formulation of cannabidiol
• Complete Phase 1 trial for novel botanical drug candidate GW541
• Advance first novel NCE cannabinoid candidate into Phase 1

GW Pharmaceuticals plc (Nasdaq: GWPH) said that the UK Home Office has reclassified Epidiolex, the company’s cannabidiol medicine as a Schedule 5 drug. The company said that the change will take effect immediately in all four of the constituent nations of the UK – with Northern Ireland enacting separate legislation – and sees the medicine move from Schedule 2 to Schedule 5 under the Misuse of Drugs Regulations 2001.

“The decision to move Epidiolex to a low level of control is an important one for patients, their families, healthcare professionals, pharmacists and the NHS as a whole – reducing costs and ensuring the medicine can be dispensed more easily,” said Chris Tovey, GW Pharmaceutical‘s Chief Operating Officer. “The extensive pre-clinical and clinical data that GW developed to support the medicine’s approval by regulatory authorities was pivotal to this important schedule change, and we would like to thank the MHRA, ACMD, and Home Office for scrutinizing this data and making this change in such a short timeframe. We remain committed to expanding the high-quality evidence base for cannabis-based medicines and securing further regulatory approvals because doing so is in the interests of patients and healthcare professionals and can support further rescheduling.”

GW Pharmaceuticals said that the ACMD and its Technical Committee recommended the schedule change to Kit Malthouse MP, Minister of State for Crime and Policing late in January 2020. The medicine is approved in the EU for adjunctive therapy of seizures associated with Lennox Gastaut syndrome or Dravet syndrome, in conjunction with clobazam, for patients from 2 years of age and older.

In its recommendation to the Minister, the ACMD cited the “low risk of abuse potential, low risk of dependency and low risk of diversion” as reasons for the reclassification from a schedule 2 controlled drug to a schedule 5 controlled drug. The ACMD also cautioned that GW’s medicine is “distinct from other commercially available CBD containing supplements that have not sought marketing authorization as a medicine” and that the schedule change, therefore, applies exclusively to Epidiolex

This now means that GW Pharmaceutical’s medicine is now exempt from virtually all controlled drug requirements. At a practical level, patients will have more flexibility in the quantity of medicine they can purchase and be able to order repeat prescriptions. Prior to this, the patients faced restrictions every time they ordered a prescription. The benefits also extend to the pharmacists and pharmacies that will have reduced controls around the storage and reporting requirements.

Analyst Response

JP Morgan Cory Kasimov wrote, “Given the Epidyolex’s favorable efficacy/safety profile, the significant unmet need in these diseases, and positive physician feedback, we believe adoption could be both rapid and substantial,” He believes that near-term label expansion opportunities (Tuberous Sclerosis) and the potential for off-label use in the broader population of general epilepsy patients could contribute significantly to the top line. “A respectable pipeline of additional assets across an array of therapeutic indications and a proprietary research/manufacturing platform should enable the company to sustain further growth” the analyst added. He currently has a $187 price target on GWPH

According to CNN Business, 16 analysts offering 12-month price forecasts for GW Pharmaceuticals PLC have a median target of $188.50, with a high estimate of $260.00 and a low estimate of $150.00. The median estimate represents a +49.97% increase from the last price of 125.69. All 16 analysts have a Buy rating on the stock.

GW Pharmaceuticals plc (Nasdaq: GWPH)  has submitted a Type II Variation Application to the European Medicines Agency (EMA) seeking approval of EPIDYOLEX, (cannabidiol) oral solution, for the treatment of seizures associated with Tuberous Sclerosis Complex. TSC is a rare genetic condition and a leading cause of genetic epilepsy. The stock was moving higher by 7% in early trading to sell at $82, not much higher than the stock’s 52-week low of $72.

“We look forward to working with the EMA to demonstrate GW’s cannabidiol oral solution’s potential in this new indication and hope to make this rigorously tested cannabis-based medicine available to a new group of patients through a potential approval in due course. If approved, this will be the third licensed indication for GW’s cannabidiol oral solution in Europe,” said Chris Tovey, GW’s Chief Operating Officer.

TSC Disease

TSC is a condition that causes mostly benign tumors to grow in vital organs of the body including the brain, skin, heart, eyes, kidneys, and lungs, and in which epilepsy is the most common neurological feature. TSC is typically diagnosed in childhood. TSC often occurs in the first year of life with patients suffering from either focal seizures or infantile spasms. It is associated with an increased risk of autism and intellectual disability. The severity of the condition can vary widely. In some children, the disease is very mild, while others may experience life-threatening complications.

The Type II Variation Application is based on data from a positive Phase 3 safety and efficacy study. The study met its primary endpoint with patients treated with GW’s cannabidiol oral solution 25 mg/kg/day experiencing a significantly greater reduction from baseline in TSC-associated seizures compared to placebo (49% vs 27%; p=0.0009). Results for the 50 mg/kg/day dose group were similar, with seizure reductions of 48% from baseline vs 26.5% for placebo (p=0.0018). All key secondary endpoints were supportive of the effects on the primary endpoint. The safety profile observed was consistent with findings from previous studies, with no new safety risks identified.