GW Pharmaceuticals' (GWPH) CEO Justin Gover on Q3 2014 Results - Earnings Call Transcript

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 |  About: GW Pharmaceuticals plc (GWPH)
by: SA Transcripts

GW Pharmaceuticals plc (NASDAQ:GWPH)

Q3 2014 Earnings Conference Call

August 06, 2014 08:00 AM ET

Executives

Steven Schultz - VP, IR

Justin Gover - CEO

Stephen Wright - Director, Research & Development

Adam George - CFO

Analyst

Tazeen Ahmad - Bank of America Merrill Lynch

Phil Nadeau - Cowen & Company

Paul Matteis - Leerink

David Freeman - Morgan Stanley

Josh Schimmer - Piper Jaffray

Samir Devani - Rx Securities

Operator

Greetings and welcome to the GW Pharmaceuticals’ Third Quarter 2014 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Steven Schultz, Vice President of Investor Relations. Thank you, sir. You may begin.

Steven Schultz

Welcome and thank you for joining us on the call today. Again, my name is Steve Schultz and I’m the Vice President of Investor Relations for GW based in the United States. Today, I am joined by Justin Gover, GW’s Chief Executive Officer; Chris Tovey, our Chief Operating Officer; Dr. Stephen Wright, our Director of Research & Development; and Adam George, our Chief Financial Officer.

We hope you’ve had a chance to review our regulatory filings from earlier today. These documents provide additional details of the Company’s third quarter financial and operating results. As a reminder, during today’s call we will be making certain forward-looking statements. These statements reflect GW’s current expectations regarding future events, including but not limited to statements regarding financial performance, clinical and regulatory activities, including the regulatory clearance of our products, timing of product launches and statements related to market acceptance and commercial potential.

Forward-looking statements involve risks and uncertainties, and actual events could differ materially from those projected herein. A list and description of risks, uncertainties and other risks associated with an investment in GW can be found in GW’s filings with the U.S. Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements which speak only as of today’s date August 6, 2014.

Finally, an archive of today’s call will be posted to the GW Web site in the Investor Relations section.

I’ll now turn the call over to Justin Gover, GW’s Chief Executive Officer.

Justin Gover

Thank you, Steve, and welcome to all those who are able to join us. On today’s call I will briefly review our recent progress, Dr. Stephen Wright will provide an update on our clinical programs and Adam George will provide an overview of our financial results for the quarter. At the conclusion of our prepared remarks, we will open the line for questions. Let me begin by saying how pleased we are with the overall progress that GW has made this past quarter and specifically our progress regarding the development of Epidiolex for childhood epilepsy.

Our Epidiolex activities fall into two distinct areas, first, formal GW sponsored clinical development programs in Dravet and Lennox-Gastaut syndromes designed to lead to FDA approval. And second, a series of FDA authorized physician sponsored INDs under which Epidiolex is administered to children with a range of treatment resistant epilepsies. These so called expanded access studies are designed to enable compassionate access to Epidiolex for some of the most difficult childhood epilepsy patients. It is this latter program for which we presented the initial data set in June that showed very promising results.

GW’s long history in the development of cannabinoid, our expertise as cannabidiol or CBD in the field of epilepsy, our extensive proprietary preclinical data set and constructive FDA interactions are all contributing to the rapid advance of the Epidiolex clinical program.

GW’s achievement to date towards this objective include the development and manufacture of a GMP formulation appropriate for use in pivotal trial, completion of significant preclinical pharmacology and toxicology studies on CBD, completion of pre-IND discussions with the FDA for Epidiolex in Dravet syndrome, incorporation of feedback from FDA on clinical protocols, resulting completion of the clinical protocol and filing with FDA, formal acceptance and opening of the IND, paving the way for trials to commence, IRB submissions and approvals, selection of over 30 clinical trial sites so far, providing expert support to sites in order to obtain necessary DEA clearance including Schedule 1 licensing, the establishment of GW U.S. clinical and medical team on the ground to fully support the Epidiolex clinical program and working with site to start to identify patients for participation in the trials and finally establishing a DEA licensed U.S. storage and distribution center which is already distributing Epidiolex to multiple sites and which will support our clinical program.

As a result of this progress, we anticipate a launch date for the initial Dravet syndrome trial in late September, early October with the second Dravet and the two Lennox-Gastaut trials to follow in early 2015.

I'll also remind you that Fast Track Designation was granted by the FDA to treat Dravet syndrome and that the Orphan Drug Designation has also been granted for Dravet and Lennox-Gastaut syndrome. Additionally in the third quarter, two U.S. states Georgia and New York announced initiatives to collaborate with GW on separate Epidiolex clinical trials in epilepsy. GW’s Sativex program also continues to progress in the last quarter with Sativex receiving Fast Track Designation from FDA’s treatment of chronic cancer pain and we are on course to release initial top line Phase 3 cancer pain data around the end of the year.

Beyond the Epidiolex and Sativex programs, the third quarter continues to be an active one with GW advancing clinical programs for pipeline product candidates in ulcerative colitis, type 2 diabetes, schizophrenia and glioma. Underlying these achievements is the financial support we received from investors in our successful follow-on offering in June, raising net proceeds after expenses of $118 million, our cash on hand at the end of June was approximately $288 million which includes these proceeds allowing GW to accelerate its epilepsy program as rapidly as possible and to start prepare for future commercial launch.

We express our thanks to those investors who participated in the offering and appreciate their support.

Let me now turn the call over to Stephen Wright for more detail on our epilepsy clinical program. Stephen.

Stephen Wright

Thank you Justin and good morning everybody. My remarks on today’s call will focus primarily on the Epidiolex program status, then I’ll briefly touch on the progress of the other product candidates in our pipeline.

As a reminder GW presented data from an initial cohort of patients from the Epidiolex expanded access studies on June 17, the slides from which are on GW’s website. So I will now restate that data but would like to reiterate some key conclusions.

Firstly, we interpret these data and showing promising signals of efficacy, especially in Dravet syndrome. Dravet syndrome is notoriously one of the more treatment resistant chanted epilepsy. We believe that the data show a high proportionate patients exhibiting a meaningful, greater than 50% reduction in seizure frequency and an important minority reaching complete seizure freedom.

To have this higher proportion of patients in this group become seizure free or to have better than 90% reductions in seizure frequency as being particularly encouraging. We’re also pleased with the safety profile exhibited in these data. With the great majority of adverse events deemed to be mild or moderate and no withdrawals from treatments due to safety or tolerability consents. Finally we believe that these data support our decision to advance as rapidly as possible into formal development programs of Epidiolex in pediatric epilepsy. Overall the data reported was very much in line with our hopes and expectations for Epidiolex.

Since that initial disclosure in June the number of children authorized by FDA for treatment with Epidiolex has continued to increase from approximately 300 at the time of our second quarter results in May to approximately 395 children today.

To date six hospital sights have cleared all necessary DEA licensing and have begun enrolling patients. In total approximately 100 patients predominantly children have now commenced treatment with Epidiolex, a significant increase over the 60 patients that had commenced treatment at the time of our last quarter results in May. We expect significant numbers of additional patients to enroll during the second half of the year.

As we stated in June, GW will provide periodic updates to investors on the progress of the expanded access studies. We expect to provide the next update during the second half of this year. Regarding GWs randomized clinical trials program as Justin mentioned earlier the Dravet syndrome IND is now open for a Phase 2/3 trial and the protocol has been finalized following FDA review and guidance.

I anticipate that this study will commence in late September or early October. The Trial is a two part randomized double blind placebo controlled parallel group dose escalation safety, tolerability, pharmacokinetic and efficacy trial of single and multiple doses of Epidiolex to treat Dravet syndrome in children who are already being treated unsatisfactorily with other anti-epileptic drugs. Part 1 of the study comprises the pharmacokinetic and dose finding elements in a total of 30 patients over a three week period.

Part 2 is a placebo controlled safety and efficacy evaluation of Epidiolex over a three months treatment period in what we expect to be a total of approximately 80 patients. GW also anticipates commencing an additional Phase III trial in Dravet syndrome in early 2015 in parallel with Part 2 of the first study.

It is important to note that all children included in the GW sponsored placebo controlled trials will also be eligible to enter a long-term open label study in which yet more efficacy and long-term safety data will be collected.

In addition to Dravet syndrome, GW has completed pre-IND discussions with the FDA for Epidiolex in the treatment of Lennox-Gastaut syndrome. FDA feedback has been received on the proposed development plan in this indication and we’re now finalizing the protocols based on that FDA input with a view to commencing two Phase III trials in Lennox-Gastaut syndrome in early 2015 alongside our Dravet Phase III studies. Speed of execution for the Epidiolex company sponsored program is now very much our primary focus.

Moving on beyond Epidiolex, Justine previously commented on the fact that Sativex Phase III cancer pain trials remain on track for initial topline data around the end of this year.

We’re also progressing the Special Protocol Assessment with FDA for a proposed Phase III trial of Sativex in the treatment of multiple sclerosis spasticity. And with respect to our earlier stage pipeline we completed the Phase I safety trial for CBDV in epilepsy, the results of which indicated that the drug was well tolerated even at the highest tested dose. We are now advancing steps to commence a Phase II proof of concept study around the end of this year.

We have completed recruitment into a 60 patient Phase II trial of GWP42003 in the treatment of ulcerative colitis and expect to report top line data in the second half of this year.

A Phase 1b/2a trial of combination of GWP42002 and 42003 in the treatment of recurrent glioblastoma multiforme, a study which includes a placebo-controlled evaluation of efficacy is ongoing and we expect to report this year on the initial safety data from this trial.

And finally GW has begun randomizing patients into a Phase 2b trial of GWP42004 in the treatment of type 2 diabetes and also into a Phase 2a trial of GWP42003 in the treatment of schizophrenia.

In summary therefore, we have a very busy program of R&D activities and expect progress across all major areas of the pipeline during the remainder of 2014.

Let me now turn the call over to Adam George for the financial review. Adam?

Adam George

Thank you, Stephen. I plan to give you some high level comments on today’s Q3 financial results, further detail is given in the press release that we issued earlier today. GW presents its financial results in accordance with International Financial Reporting Standards or IFRS accounting rules in British pound sterling, for convenience purposes I will give U.S. dollar equivalents for certain key numbers. Today’s results cover the three month and nine month periods ending June 30, 2014. I will start will the three month period.

Total revenues for the quarter were £7.6 million or $13 million compared to £7.3 million in Q3, 2013, a revenue increase of £0.3 million. Our revenues consist of three income streams, firstly Sativex sales which increased to £1.3 million from £0.5 million in Q3, 2013, reflecting growth in the volume of Sativex shipped to our commercial partners in the period. Sativex in-market sales volumes sold by GW’s partners for the quarter were 70% higher than in the three months ended 30 June, 2013. And we have R&D fees charged to Otsuka which decreased marginally by £0.1 million to £6 million.

The net decrease reflects reduced charges for pipeline R&D following the end of our early stage collaboration with Otsuka in 2013, offset by increased Phase 3 trial spend, as we progress towards completion of the Sativex cancer pain trial.

Finally we have a £0.3 million decrease in milestone income, reflecting the fact that the comparative period included an Italian Sativex commercial pricing approval milestones.

Next R&D spend, total research and development expenditures for the three months increased by £1.8 million to £10.2 million. This increase is entirely driven by GW funded research and development spend, which increased by £1.9 million to £4.2 million, offset by a slight reduction in the Otsuka funded R&D spend.

The increase reflects the planned use of proceeds from our recent offering which have led to the record advancement of the Epidiolex epilepsy program plus progress of the other pipeline Phase 2 trials in ulcerative colitis, glioma, schizophrenia and diabetes.

Management and admin spend increased by £3.2 million, £4.0 million for the three months. This increase include £0.8 million in respect with the accounting employer payroll taxes on staff stock option gain, following the increase in the GW share price in the period and £1.8 million related to an unrealized foreign exchange loss, arising on retranslation of our U.S. dollar denominated cash deposits in the pound sterling at the closing exchange rate on June 30th. The remaining £0.6 million of increase is due to the additional cost of operating as a U.S. listed company. This will result in the loss before tax for the three months £7.3 million or $12.5 million compared to a loss before tax of £2.3 million for Q3, 2013.

For the nine months ended 30th of June, we have total revenues of £22.6 million or $38.7 million. Total R&D spend has increased by 33% to £31.2 million or $53.4 million. Otsuka continue to fund 58% of the spend with GW spend increasing by £7.3 million to £13 million for the nine month. Management and admin spend of £7.7 million for the nine months is £4.9 million higher than for the first nine months of 2013. As already noted, this includes the impact of £1.8 million of employer payroll taxes on stock option gains, £2.3 million of unrealized exchange loss on retranslation of dollar cash deposits at the closing exchange rate and the remaining £0.8 million increase is the additional cost of being a U.S. listed company.

In terms of profitability for the nine months, were showing a loss after tax of £14.9 million or $25.6 million with the increase in reported loss primarily by the increase in spending on Epidiolex clinical activity.

Turning to cash flow for the nine months to 30th of June, we reported a net cash outflow from operating activities of £4.2 million or $7.2 million. Capital expenditure was £4.8 million consisting of Sativex and Epidiolex manufacturing facility upgrades. Total net proceeds from equity issued in the nine months including receipts from our January and June 2014 offerings plus warrants and option exercises totaled £136.4 million or $233.3 million. As a result we’ve recorded a net cash inflow for the nine months to 30, June 2014 of £130.2 million or $222.7 million. This resulted in the closing cash position at June 30, of £168.3 million or $297.8 million.

Finally I’ll just like to reiterate the 2014 full year guidance. We continued to expect strong double-digit Sativex sales revenue growth in 2014 driven by in market sales volume growth by our partners. We expect GW funded R&D to continue to increase the share as we progress the Epidiolex clinical program under the Phase 2 activities.

Finally cash guidance in line with the previous guidance, core operating cash outflow for 2014 including capital expenditure is expected to be around £24 million or $41 million. This should result in placing cash at September 30 of around £150 million to £155 million or between $257 million to $265 million. Thank you.

I’ll now hand the call back to Justin.

Justin Gover

Thank you Adam. During the remainder of 2014, you should continue to see very active use flow from GW. Including additional wait on the Epidiolex expanded access program and increasing enrollment into this program, the start of GW sponsored Epidiolex trials in Dravet syndrome, the opening of the IND to conduct Phase 3 trials in Epidiolex in treatment of Lennox-Gastaut syndrome. Progress with the state initiatives for Epidiolex, commencement of Phase 2 proof of concept, epilepsy trial for CBDV and initial top line Phase 3 data for Sativex in cancer pain.

We look forward to continuing to update investors on GW’s progress and other programs in the months ahead. Please note that we expect to host a Research and Development Day in New York City on October 14, where we will provide a detailed review of the Company’s product pipeline and program status. We welcome your participation either in person or through the webcast. So stay tuned for press release announcing further details of this event.

Thank you for your time today and for your interest in GW. And I would now like to open the call for few questions.

Question-and-Answer Session

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions). Thank you. Our first question comes from the line of Tazeen Ahmad with Bank of America Merrill Lynch. Please proceed with your question.

Tazeen Ahmad - Bank of America Merrill Lynch

A couple, can you just go over what type of data we should try to expect in the fall for your second read through of your IND trial? Should we expect the same type of information that we got with the first data release or do you think you’d be able to become a little bit more granular, for example providing a breakdown of the different types of epilepsies that are being studied in those trials?

Stephen Wright

The only level granularity really that we provided in the last update was the Dravet syndrome patients, largely because there are a reasonable number of them. I think if there is another single patient group that reaches the same approximate exposure as we had in Dravet syndrome which was actually 13 patients if you recall. Then I am sure that we would probably give a more granularity about those. But I don’t believe that’s going to be the case. I think that the treatment the expanded assess INDs cover quite a broad range of different epilepsy sub-types.

Certainly if we believe we see significant and meaningful signal from other patient groups on Dravet, I am sure we will give to group granularity about those but I wouldn’t expect it.

Tazeen Ahmad - Bank of America Merrill Lynch

And in terms of the number of sites that you expect to release data from the first one and New York and San Francisco. So you think you’ll have enough time with the second release to include patients from additional sites?

Stephen Wright

Certainly from the point of view of safety information, absolutely yes. As we will do next time, as we did last time release some information on every single person has received Epidiolex in that program, but of course from the efficacy point of view the information becomes much more meaningful when the exposure has been prolonged. Our intention generally is to follow the same pattern we did before which is to release efficacy data on those children who received 12 weeks of continuous exposure.

And there is at least one other site that will participate significantly actually in the efficacy evaluation which is in Mass Gen in Boston, where a significant proportion of children will have reached 12 weeks by the time we make our next release on the data.

Tazeen Ahmad - Bank of America Merrill Lynch

And then last question is outside of New York, San Francisco and I guess Boston, can you tell us what other sites are now treating patients the other three?

Stephen Wright

We’re waiting until we make the release before we give the identity of the sites where the children are being treated.

Operator

Our next question comes from the line of Phil Nadeau with Cowen & Company. Please proceed with your question.

Phil Nadeau - Cowen & Company

Maybe just a follow-up on the last question. It sounds like you have specific timing in mind for when you are going to make the release of data, should we expect to see the next release at the R&D Day?

Justin Gover

Hi, it’s Justin here. Thank for you that question. It was a question I was going to try to answer if it was not asked which is the R&D Day date is something that you should not read out signifying a milestone for some kind of data releases. It’s been organized for our logistics as opposed to news flow purposes and that date has been organized in that way. So, the guidance we are giving is really second half guidance. I think we just need to -- the experience we have from last time, it does take some time to match the data from sites and collect it and process it in a database and analyze it properly. So, I think at the moment the guidance is simply second half.

Phil Nadeau - Cowen & Company

Okay, in your prepared remarks, you mentioned that there are now 395 patients authorized by the FDA for the INDs. What does the 395 number mean? Does that mean that you have actually identified 395 children and you are going through the process of getting DEA scheduling and the sites to open up or this simply mean that there is now 395 slots authorized but some of those infant but specific kids?

Stephen Wright

Hi, Phil, Stephen Wright. Now the process is that the investigators or the physicians are obliged to indicate that they have patients already lined up, if you like, for inclusion in the expanded access program, those patients where they believe that the benefit risk is in favor of their receiving treatment. It’s not GW however that have any part in identifying or knowing who those children or patients are. It’s purely in the hands of the individual investigators who submit their INDs to FDA. So, you are right, its first time there have been that many children identified as potentially benefiting.

Phil Nadeau - Cowen & Company

Okay, great, then one last question on Dravet. Which doses are you going to test in the Phase 2, 3 study?

Stephen Wright

The Phase 2, 3 studies takes a top dose of 20 mgs/kg and two doses below that, so the aim is to demonstrate pharmacokinetics and safety of three doses and the top dose being 20 milligrams per kilogram.

Phil Nadeau - Cowen & Company

Okay, great. And then last question is on the ulcerative colitis trial, can you remind us of the design there and what efficacy and safety data we'll get with this first topline release?

Stephen Wright

The ulcerative colitis study is aimed at demonstrating whether 42003 is capable of inducing remission in those patients who fail to go into remission following first line [indiscernible] based therapy. Of course there is a second important and subsequent objective there which is whether you can maintain remission but the first study is aimed purely at looking at whether 42003 can induce remission using what’s called the MAYO score for an ulcerative colitis severity which is a combination of a number of features of the disease.

Operator

Our next question comes from the line of Paul Matteis with Leerink. Please proceed with your question.

Paul Matteis - Leerink

I have a few on Epidiolex, the first is I know at the Chicago meeting Dr. Diwinsky talked about following some of its patients after three months who have been receiving Epidiolex from the beginning of the expanded access program. So, I am wondering what kind of longer term efficacy data could we get in the next Epidiolex readout and to what degree do you think that you need to show Epidiolex benefit is sustained over the long-term to get FDA approval? Thanks.

Justin Gover

That’s a very good question. In general, FDA approval is gained by showing treatment results over three months exposure period and the longer term exposure goes towards demonstrating safety. But you are absolutely right that the case for approval is stronger if you can show that responses are maintained over longer treatment periods and so both our expanded access INDs and our long-term open label extension studies which will follow-on from our randomized controlled studies, will give information about maintenance of improvement but also maintenance of Seizure freedom even importantly.

That’s not the primary outcome measure of any of the studies, Seizure freedom or the primary outcome is reduction in seizure frequency over the 12 week period but certainly maintenance of that reduction in seizure frequencies is a very important endpoint for us and is served by both of the programs, both the expanded access and the randomized controlled trial studies.

Paul Matteis - Leerink

Great, thanks. And so, do you think we will see any of that longer term data in the next readout? And then I had one more on the trial, just how you are defining unsatisfactory treatment responses to AEDs in your dry based study and how that affects recruiting and stuff? Thanks.

Justin Gover

Actually I feel very confident that we will report on maintenance of efficacy over longer than a 12 week exposure period but of course you appreciate that because Boston came on stream a bit later and the numbers will be relatively small compared with the numbers of those who have now reached 12 weeks. So, I still believe it’s the 12 week data which is probably going to be the most important at this point. That may change as we move further forward into next year where we’ll have bigger volumes of longer term exposure and inevitably will be reporting on that as the time comes around.

Paul Matthias - Leerink

And then I was just wondering how you’re defining refactoring as to AEDs in your Dravet studies, is just kind of up to the physician or do you need to have failed a certain of drugs to get into the trial? How is the enrollment working in? How is the patient population looking?

Justin Gover

Yes we haven’t started enrolling in our Dravet studies. And I think I mentioned in the presentation that we’re looking to September/October to start enrolling. But the inclusion criteria and the definition of both patients are that they are on at least one and up to four existing AEDs and they have a baseline seizure frequency which is quite substantial. So that allows them to be defined as treatment resistant.

It is a special case in Dravet, because of course there are no approved treatments in Dravet. So the definition of treatment resistant is a little bit more subtle in those patients and for example in the Lennox-Gastaut where there are some approved anti-epileptic drugs. In terms of the specific toxicity of anti-epileptic drugs that can really only be explored in a placebo controlled setting where we’ll see the adverse event profile in those patients taking both the anti-epileptic drugs and Epidiolex versus those taking anti-epileptic drugs and placebo.

I think from the expanded access it’s very difficult for us to know which adverse events are attributable to the anti-epileptic drugs and which might be attributable to Epidiolex.

Paul Matthias - Leerink

And just one more if you don’t mind. I am just wondering how much of a hurdle time wise is getting a site license for a schedule 1 substance and are the sites that are currently in the expanded access program also going to be trial sites? To what degree can that expedite the process of enrollment at those sites that have already gotten clearance by the DEA to use of Epidiolex.

Justin Gover

I’ll take the second part first, yes absolutely the sites involved in the expanded access program are and will be part of the randomized control study program. And secondly yes that does expedite DEA approval for those sites. It becomes a much shorter process once the sites have already been inspected as appropriate drug storage facilities and security and so on. It’s where the site has not had any prior Schedule 1 experience that the DEA process can be a little bit unpredictable in terms of its lengths.

Operator

Our next question comes from the line of David Freeman with Morgan Stanley. Please proceed with your questions.

David Freeman - Morgan Stanley

I just wanted to understand a little better, how you are approaching the development of CBDV and what you think the hurdle for moving forward beyond the pilot study is either alone or in combination with CBD?

Stephen Wright

CBDV is in a very different position and CBD in so far as we have much less preclinical toxicology, preclinical safety information and of course we have no human evidence of efficacy in epilepsy of any sort currently. So the initial part of our development program is to check the boxes if you like in preclinical safety and pharmacology means doing longer exposures in toxicology studies, exploring more [indiscernible] looking at consequences of respiratory nervous cardiovascular system, all those boxes you have to check in preclinical developments. And as soon as possible exploring proof of concept in human epilepsy.

So that’s the extent of our development plan at this point. Where that takes us in the very long-term is also dependent upon the CBD, the Epidiolex program. We clearly anticipate that the CBDV development ultimately will complement and build on the position that we achieve with Epidiolex.

Operator

(Operator Instructions). Our next question comes from the line of Josh Schimmer with Piper Jaffray. Please proceed with your question.

Josh Schimmer - Piper Jaffray

Your latest thoughts on commercialization and GW’s capabilities as we came back to U.S. Europe or rest of the world. I mean particularly as the potential indications and applications of Epidiolex or CBDV expand. Where do you think you are able to commercialize on your own and where do you think you ultimately might [indiscernible] and if you do feel like you need to [indiscernible] at the right time to be thinking about partnerships? Thanks.

Chris Tovey

Josh hi, its Chris Tovey. I think that’s a great question, obviously we’re at a point now where we’re very much turning our mind towards questions around commercialization. So the back of building essentially a clinical development organization now in the U.S. which Steve and the team have done, we’re looking at what our U.S. organization needs to look like. We’ve been working on detailed plans for prelaunch activities and post-commercialization, so are quite advanced in terms of our thinking and planning around what a U.S. organization would look like for GW and I think we said in the past that we see ourselves as commercializing Epidiolex ourselves in the U.S. and that’s obviously one of things that the money raises we have had in the past, will be useful. I think the rest of the world slightly less well evolved. There are a lot of opportunities and different models that are open to us to take Epidiolex beyond the U.S. and we will be thinking through the pros and cons of all of those different alternatives in the next six, 12, 18 months.

Josh Schimmer - Piper Jaffray

And then maybe just a quick question a sneak speak of the event later in the year. Do you think that this is an opportunity that review your current clinical stage programs or should we also be thinking about maybe learning a little bit about how you see the future and potentially new applications at cannabinoid franchise?

Justin Gover

Justin here, thanks for the question. I think yes, it will be both, so I think it’s clearly important that we update on programs we have and we have some external speakers which we hope to invite and bring along to this event but undoubtedly we will seek to construct a vision of where we see the current state of cannabinoids science, the directions in which we are traveling with regard to our own view of the future cannabinoid medicines. And I will address then entirely the latter element to your question.

Operator

Our next question comes from the line of Samir Devani with Rx Securities. Please proceed with your question.

Samir Devani - Rx Securities

I am wondering whether you have any anecdotal information from the expanded access program, on what happens when doses of Epidiolex are missed or the drug is withdrawn?

Justin Gover

That’s a very interesting question Samir, the drug’s only been stopped I think in three children that we are aware of so far. Those were stopped because the child did not appear to be responding, so in all cases where there has been some response or where the drug is being continued we are not aware of there being discontinuations in treatment or any consequences of any discontinuations in treatment, so good question.

Within the clinical trials, we do specifically follow children after drug is discontinued for several reasons but we will get formal information about what happens with those children.

Just let me construct the scenario in which that happened. In randomized controlled trial of course the number of the children will be on placebo. At the end of the randomized controlled trials all children are given the opportunity to move onto long-term Epidiolex so that you have a period of being up to follow the children who come off of drug actually as well because of the short period in between before they go into long-term extension. So, we've got a lot of information about that at that time but we don’t have any currently.

Samir Devani - Rx Securities

That’s great and you spoke a lot about the FDA dialogue, can you update us on what dialogue you are having with European regulators?

Justin Gover

I can, we have a meeting with European regulators coming up in the next few weeks to continue with the, what I can say, with the progress of the Dravet program throughout Europe and to further explore any additional elements to the development program that are required for European, full European evaluation. I should also say we have approximately equal numbers of investigated sites in Europe as we have in the United States for the randomized controlled program.

Samir Devani - Rx Securities

Okay, great and then just a final question for Adam. Could you just clarify how much of your net cash, your cash position is held in dollars at the moment?

Adam George

I don’t have a precise number but I would say it’s about two-thirds of our cash and we are keeping as dollars simply because we expect to spend as dollars. So, that is going to cause a little bit of volatility in FX through our P&L in the short-term but it makes sense to hedge the future spend by keeping the cash in that form.

Operator

We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Justin Gover

Thank you. Its Justin here, just to thank you for your participation, a reminder that the R&D Day event for 14th of October, we have a next -- set piece event for the company and then move into full year results later in the year around the early December timeframe. So, thank you for your interest. We continue to -- we hope deliver on the promises of the GW platform and look forward to updating you through the second half of the year.

Operator

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

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