GW Pharmaceuticals plc

GWPH Details

Positive Response from Epidiolex^®: GW Pharmaceuticals Plc (NYSE: GWPH) is a biopharmaceutical company which specializes in discovering, developing and commercializing novel therapeutics from its proprietary cannabinoid product platform. GW’s lead product, Epidiolex, has been approved in the US and is used for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) and Dravet syndrome.

Q3FY19 Operational Highlights for the Period Ended 30 September 2019: GWPH declared its third quarter results for FY19 wherein, the company reported total revenue of $90.97 million as compared to $2.42 million in Q3FY18, driven by encouraging response for Epidiolex^® from physicians and patients.The company reported a steep reduction in net losses to $13.757 million from a loss of $79.879 million in the previous corresponding period. Research and development expenses came in at $36.301 million, representing ~39.9% of the total revenue. Since the launch of Epidiolex^®, more than 15,000 patients have received prescriptions and over 3,000 physicians have generated dispensed prescriptions. The product received strong payor coverage with ~93% of all Commercial, Medicaid and Medicare lives in the US having a coverage determination, of which 65% are PA to indication or less restrictive. As far as the European market is concerned, commercialization is underway in France and Germany. The company is likely to launch Epidiolex^®   in Spain and Italy in 2020. The company reported cash and cash equivalents of $554.68 million as compared to $591.497 million as on 31^st December 2018. Total assets and stockholder’s equity stood at $719.655 million as on 30 September 2019. Within the life-cycle management operations, the business reported several new formulations of CBD in development, including modified oral solution, capsule and intravenous formulation. The business also received approval from FDA for 7-years of orphan exclusivity and expects 6-months pediatric extension. The company further expects 10 year of orphan exclusivity in Europe plus 2 year of pediatric extension.


Q3FY19 Financial Highlights (Source: Company Reports)

Outlook:The business has a pipeline of several products, namely Sativex® (nabiximols), CBDV,

Neonatal Hypoxic-Ischemic Encephalopathy (NHIE) intravenous CBD program, Schizophrenia (GWP42003).  The business is conducting several clinical programs for the above products which are expected to commence in CY20. For FY19, the company is expecting an operating expense of $395 million to $425 million and a capital expense in the range of $35 million to $45 million.
 
Stock Recommendation: The stock of GWPH is quoting at $99.36 with a market capitalization of $3.07 billion. The stock has given negative returns of 20.09% and 46.20% in the last one-month and six-months, respectively. The stock is trading at the lower band of its 52-week trading range of $90.14 and $196.00. The company sees significant opportunities in the short, medium and long-term. GWPH believes that the business has the potential to place Epidiolex® as a successful brand. GWPH expects additional momentum from Europe as well as the launch of the Tuberous Sclerosis indication during 2020. On top of this, the company is ideally placed to consolidate its leadership in cannabinoid science through advancing several mid and late stage pipeline programs in the coming quarters. For Sativex^® (nabiximols), the company has completed 3 positive Phase 3 trials in Europe and a clinical program is expected to commence in Q1FY20 to augment existing pivotal data package. For its Schizophrenia (GWP42003)product, the company has published a Positive Phase 2a trial and expects the commencement of Phase 2b trial in H1FY20. We suggest investors to keep a close track on the product pipeline-in progress. Considering the aforesaid facts, positive response for Epidiolex®, product pipeline, price movements, and current trading levels, we recommend a ‘Buy’ rating on the stock at the current market price of $99.36, up 0.15% on 21 November 2019.

 
GWPH Daily Technical Chart (Source: Thomson Reuters)

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