GW Pharmaceutical stock rallies in anticipation of commercial sales of EPIDIOLEX following DEA decision
The U.S. Drug Enforcement Administration made another pro-medical marijuana industry decision Thursday by classifying a GW Pharmaceuticals PLC (NASDAQ:GWPH) cannabidiol-based drug called Epidiolex to its least restrictive category, Schedule V. Schedule V controlled substances are considered to have a low potential for abuse and are accepted for medical use in treatment in the United States, which means Epidiolex can now be prescribed by physicians to treat patients on a less restrictive basis.
Epidiolex uses cannabidiol, or CBD to help treat epileptic seizures that come on as a result of two rare forms of childhood epilepsy, Dravet and Lennox-Gastaut syndromes. These types of epilepsy are very severe and treatment-resistant, so this is a huge win for both the marijuana industry and modern medicine.
In anticipation for increased sales of GW Pharmaceuticals product, traders reacted positively, and the stock price jumped to all-time highs. The company’s stock closed up $11.38 to $174.50 on Thursday, a 6.98 percent increase in the stock value. Since last September, the stock has yielded a return of about 72 percent.
The CBD market continues to grow
Unit recently, delta-9 tetrahydrocannabinol or THC was the ingredient of focus when discussing marijuana. While it is the most active compound found in the plant, CBD is another main ingredient that has physical effects on the human body. Unlike THC, however, CBD is not psychoactive, meaning it will not have mind-altering effects like THC. There’s evidence that consuming CBD can provide health benefits including pain management, anxiety reduction, insomnia treatment, epilepsy treatment, and more.
The legality of CBD-based products, especially CBD oil, differs state-to-state. Since there are no psychoactive effects from it, regulations are lifting for the compound faster than they are for the marijuana plant itself. This is creating huge opportunities within the medical marijuana industry.
GW Pharmaceuticals is a British biopharmaceutical company traded on a U.S. exchange. They are among the top global leaders in prescription cannabinoid medicines and are looking to continue commercializing marijuana-based pharmaceutical products for various types of treatment. Their primary focus is on central nervous system disorders, which encompasses epilepsy.
While they have already commercialized other plant-derived CBD prescriptions outside of the U.S., including Sativex which is used to treat multiple sclerosis symptoms, Epidiolex will be the first to be prescribed in the U.S. They hope to make it available through its U.S. subsidiary Greenwich Biosciences within the next six weeks.
While this win for GW Pharmaceuticals puts them in the lead for commercial production on CBD-based medicine in the U.S., naturally a medical breakthrough will lead to more pharmaceuticals trying to reproduce or improve the drug. There are a number of competitors to worry about taking their market share and diluting their power. One notable example is Zogenix (NASDAQ:ZGNX) which also focuses on epilepsy treatment. They are waiting on FDA approval of their own similar drugs intended to treat Dravet syndrome, and if it is approved, it could challenge GW Pharmaceuticals hold on the market share.