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GWPH Highlights

  1. GW Pharmaceuticals plc (GWPH) has established a world-leading position in the development of plant-derived cannabinoid drugs for the treatment of a broad range of diseases.
  2. If GWPH can receive U.S approval for its lead product Sativex, one of GWPH's partners or other drug manufacturers could be interested in acquiring the company.
  3. GWPH's lead product Sativex is in its infancy, as the company has initiated commercialization in only 11 countries outside the U.S and expects commercial launches in 2014 in up to 11 more countries in which the company already has received regulatory approval.
  4. The potential market size for Sativex for treatment of MS-related spasticity is approximately 1 million people worldwide, and current available oral treatments afford only partial relief with unpleasant side effects.
  5. The potential market size for Sativex (non-opioid) for cancer pain is approximately 2 million people within the U.S (worldwide data not found), for whom current opioid treatments can be disabling. There currently are no approved non-opioid treatments for patients who do not respond to, or experience negative side effects with, opioid medications. This leaves GWPH with a huge untapped market.
  6. Epilepsy affects an estimated 50 million people worldwide. Current drug therapy remains ineffective for seizure control in up to 30 percent of epilepsy patients because either the drugs don't control the seizures or the patients can't tolerate the side effects. This leaves GWPH with MONSTER potential!

Background:

GWPH is a biopharmaceutical company focused on discovering, developing and commercializing plant-derived cannabinoid drugs for treatment of a broad range of diseases. In its 14 years of operation, GWPH has established a world-leading position in the development of plant-derived cannabinoid therapeutics. With marijuana now legal in some form in 20 states plus the District of Columbia and legal for recreational use in Colorado and Washington, it is clear there is a growing social acceptance of the drug within the U.S. At least one high-profile medical professional recently did an about-face on the issue of medicinal marijuana after learning of the benefits some patients experienced from its use. This de-stigmatization potentially could open a broader American market for GWPH. Although cannabinoids, like marijuana, are derived from the cannabis plant, experts say cannabinoid medicines present little potential for abuse. Cannabinoids don't have the same psychotropic (mind-altering) effects of THC, which also is derived from the cannabis plant and is the ingredient primarily responsible for marijuana's "high."

Introduction:

As they realize the potential medical benefits within the marijuana plant and the fact GWPH has established a world-leading position in the development of plant-derived cannabinoid drugs for treatment of a broad range of diseases, we feel investors will flock to this stock. If GWPH can tap into the U.S. market, we believe the company has the potential to be acquired by a large drug manufacturer. Sativex is quite distinct from herbal marijuana, and as marijuana is becoming increasingly accepted throughout the U.S, we feel GWPH won't have a problem getting approval in the U.S. If Sativex is approved within the U.S and worldwide, this will leave GWPH a huge untapped market. In addition, if GWPH's drugs prove to be effective in treating epilepsy, the company will have monster potential.

Drug Pipeline:

Although historically there has been a negative perception of medical marijuana, great benefits within the plant are being discovered. GWPH is leading the way in this area, with its lead drug Sativex rapidly becoming used across the globe to treat MS spasticity.

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The above graph and data below were found within the 20-F.

Sativex and MS spasticity

Sativex is used to treat moderate-to-severe MS spasticity. GWPH recently initiated the commercialization of Sativex for treatment of MS spasticity in 11 countries outside the U.S. GWPH also has received regulatory approval in an additional 11 countries and anticipates commercial launches in the majority of those countries during 2014. Two additional countries have recommended approval for Sativex, and regulatory filings are ongoing in eight other countries, principally in the Middle East, where GWPH expects approvals during 2014. GWPH believes MS spasticity represents a significant market opportunity within the U.S. and has initiated a Phase-3 clinical trial of Sativex for MS spasticity in 2014.

  1. According to the World Health Organization, MS affects more than 1.3 million people worldwide, of which more than 400,000 are in the U.S. and more than 600,000 are in Europe.
  2. Spasticity is one of the most common, chronic and disabling of the disease's symptoms, affecting up to 80 percent of MS patients during their lifetimes.
  3. There is no cure for spasticity, and it is widely recognized that currently available oral treatments afford only partial relief with unpleasant side effects.
  4. Sativex offers the prospect of treating patients for whom existing oral therapies have failed and who otherwise might require invasive and costly alternative treatment options such as intrathecal baclofen or surgery.
  5. In clinical trials, Sativex has been shown to provide effective relief of spasticity symptoms, including reduced spasms, improved sleep and improved function, in patients for whom existing anti-spasticity treatments have failed.

Sativex and cancer pain

GWPH is evaluating Sativex in a Phase III program for the treatment of persistent pain in people with advanced cancer who experience inadequate pain relief from optimized chronic opioid therapy. The primary treatment for cancer pain is analgesic narcotics, also known as opioids. Morphine and oxycodone are the most-prescribed opioids, and morphine is the standard regimen for treating cancer pain in palliative-care and hospice-care programs and facilities. The use of opioids frequently causes undesirable side effects such as constipation, sedation, respiratory depression and analgesic tolerance and also carries risk of addiction. Sativex has the potential to address a significant unmet need in this large market by treating patients with a product that employs a differentiated, non-opioid mechanism of action, and by offering the prospect of pain relief without increasing opioid-related adverse side effects.

  1. According to Data Monitor Stakeholder Insight: Cancer Pain, Dec 2009, there were 4.75 million cancer patients in the U.S. in 2009. According to market research conducted on behalf of Otsuka as part of our collaboration, approximately 72 percent, or 2.4 million of these patients, have advanced cancer. Of those, 89 percent, or approximately 2.1 million patients, are treated with opioid medications.
  2. There currently are no approved non-opioid treatments for patients who do not respond to, or experience negative side effects with, opioid medications.
  3. Phase-2 studies produced a substantial body of positive data.

Sativex and neuropathic pain

Sativex is approved in Israel and Canada (under a Notice of Compliance with conditions, or NOC/c policy) for treatment of MS-related neuropathic pain. The NOC/c policy applies to drugs that show promising Phase II evidence of efficacy in a patient population with a high, unmet medical need for which there currently is no approved treatment.

Epidiolex and childhood epilepsy

Epidiolex is an investigational drug and has not been approved for use by the FDA or any other national regulatory agency. However, it has received orphan designation for treatment of Dravet syndrome, of which there are 5,440 known cases in the U.S., a figure that probably is low because this syndrome reportedly is underdiagnosed. GWPH's initial strategy for the development of Epidiolex in pediatric epilepsy is to concentrate on Dravet syndrome and Lennox-Gastaut syndrome, of which there are 14,000-18,500 cases in the U.S. Then, GWPH will look to further expand the market opportunity by either targeting additional orphan seizure disorders and/or by seeking approval for a wider indication of pediatric epilepsy resistant to current treatments.

  1. GWPH estimates that currently, there are 466,000 childhood epilepsy patients in the U.S. and 765,000 more in Europe. Specialists estimate that up to 20 percent of these cases are deemed ''medically intractable.'' Furthermore, it is recognized that some of those who do find relief through their current medication often suffer side effects severe enough that an alternative or adjunct is sought.
  2. For several years, GWPH conducted pre-clinical research of CBD in epilepsy which showed the drug has the ability to treat seizures in acute models of the disease with significantly fewer side effects than those of existing anti-epileptic drugs.
  3. There currently are no FDA-approved treatments specifically indicated for Dravet syndrome.

GWP42006 (CBDV) and epilepsy

GWPH initiated a Phase I trial for GWP42006 during the second half of 2013. Results of this trial are due to be reported during the first half of 2014. GWP42006 has the potential for development in the field of pediatric epilepsy as well as in the broader epilepsy market. In a paper published in the September 2012 issue of The British Journal of Pharmacology, scientists reported that GWP42006 has the potential to prevent more seizures, with few of the side effects, such as uncontrollable shaking, caused by many existing anti-epileptic drugs. In the study, GWP42006 strongly suppressed seizures in six different experimental models commonly used in epilepsy treatment. GWP42006 also was found to provide additional efficacy when combined with drugs currently used to control epilepsy.

  1. Epilepsy is estimated to affect 50 million people worldwide.
  2. Current drug therapy remains ineffective for seizure control in up to 30 percent of epilepsy patients because either the drugs don't control the seizures or the patients can't tolerate the side effects. Currently available drugs can cause significant side effects to individuals' movement and cognitive abilities that can adversely affect the epilepsy patients' quality of life.

GWP42004 and type-2 diabetes

There is no cure for diabetes, so treatments primarily are aimed at controlling blood-glucose levels. There is recognition that advances in the treatment of type-2 diabetes should focus not merely on glucose control but in protecting the overworked pancreatic islet cells from failure. Thus, there is an unmet need for improved insulin-sensitizer drugs and oral treatments that result in a restoration of normal insulin production and glucose-dependent release of insulin from pancreatic islets. GWPH has completed a Phase IIa trial in the treatment of dyslipidemia in patients with type-2 diabetes and is planning a larger, placebo-controlled, Phase II dose-ranging trial of GWP42004 to begin during the first half of 2014. According to the American Diabetes Association, 25.8 million individuals in the U.S., or 8.3 percent of the population, have diabetes, with at least 90 percent of those cases the type-2 form. According to the World Health Organization, between 2010 and 2030, diabetes rates in developing countries will increase by 70 percent and in developed countries by 20 percent.

Other drugs in trial phases

GWPH has several other drugs presently in various trial phases.

  1. GWP42002/GWP42003 (Phase Ib/IIa trial under way) for treatment of glioma
  2. GWP42003 (Phase IIa trial data H1 2014) for treatment of ulcerative colitis
  3. GWP42003 (Phase IIa trial to start H1 2014) for treatment of schizophrenia

GWPH Price Target:

Joshua Schimmer, an analyst at Piper Jaffray, said the following about GWPH:

  1. One of the most compelling opportunities we have ever seen
  2. Overweight rating with a $73 price target
  3. Potential blockbuster franchise in CBD/CBDV, we see GWPH shares as having substantial upside from current levels

If Sativex is approved in the U.S. for treatment of MS spasticity, the market for GWPH potentially will double to approximately 1 million. If Sativex is approved for treatment of both MS spasticity and cancer pain both in the U.S and worldwide, the market for GWPH will increase to approximately 5 million. In addition, if GWPH's drugs prove to be effective in treating epilepsy, the company will have MONSTER potential!

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Risks:

GWPH is substantially dependent on the success of Sativex and may never receive U.S. regulatory approval. Also, marijuana is considered a narcotic is most countries around the world which could harm the willingness to approve its drugs.

Conclusion:

GWPH has the potential to hugely benefit in multiple untapped markets if the company can get regulatory approval, especially within the U.S. We believe that with over a handful of drugs in all different phases of approval, GWPH will be of interest in the coming years.

Source: GW Pharmaceuticals - A Marijuana Stock With Monster Potential If Sativex Wins U.S Approval