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GW Pharmaceuticals raises $345 million in share sale following Epidiolex approvals

By Jacqueline Havelka
Oct 11, 2018

Four months after earning U.S. Food and Drug Administration approval for its epilepsy drug Epidiolex, GW Pharmaceuticals (NASDAQ: GWPH) has raised $345 million to fund a major company expansion. To raise funds, the company sold nearly 2.2 million American Depository Shares in an underwritten public offering on the NASDAQ exchange, at a price of $158 per ADS.

GW Pharmaceuticals is a biopharmaceutical company focused on discovering, developing and commercializing novel therapeutics from its proprietary cannabinoid product platform. The company had previously commercialized the CBD-based multiple sclerosis drug Sativex outside of the U.S., but Epidiolex represents the first cannabis-based drug of its kind to be prescribed within the U.S.

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The oral CBD solution is used to treat two rare and extremely debilitating childhood forms of epilepsy, Lennox-Gastaut and Dravet syndromes, and is expected to be available by the end of 2018 through the company’s American subsidiary Greenwich Biosciences. Epidiolex is approved for use in patients two years of age or older and is a formulation of highly-purified, plant-derived cannabidiol.

 

A string of successes for the biopharmaceutical company

The capital drive is only the latest in a string of successes for GW Pharmaceuticals. Of particular importance was Epidiolex’s successful clinical trial at the Children’s Hospital of Philadelphia. Of course, another major coup was the DEAs recent rescheduling of Epidiolex in late September to Schedule V, which represents the lowest restriction classification. 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.

Although the drug is approved for the two rare forms of epilepsy, Epidiolex is expected to be widely prescribed as an off-label drug for other forms of epilepsy and neurological disorders. Over two million Americans suffer from epilepsy, with about one-third of those cases being unresponsive to current prescription medication. Epidiolex shows tremendous promise as a treatment, as the clinical trial results showed that it reduced seizures in over 40 percent of patients —particularly meaningful in that these two rare forms are traditionally not responsive to standard anti-epileptic drugs.

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The public offering has increased GW Pharmaceuticals’ market cap to a whopping $4.3 billion. Market analysts state that GW now has everything they need to show investors that the company can grow, diversify and generate sales among larger consumer groups as doctors begin to prescribe the drug as off-label. One of the market concerns is that Epidiolex sales will stagnate since fewer than 1,000 children are diagnosed annually with the two rare forms of epilepsy.

GW Pharma hopes to dominate the market for years to come

A spokesperson said that the decision to raise the $3.45 billion was about showing the companies dominance in the market.

“The decision to raise finance was about maintaining our financial strength as we execute the launch of Epidiolex and as we maintain investment in new product development.”

GW Pharmaceuticals said that Epidiolex is only the beginning--the first in a new category of anti-epileptic drugs. GW Pharmaceuticals is a global leader in prescription cannabinoid medicines, and with the new capital plans to continue commercializing marijuana-based pharmaceutical products for the treatment of various types of central nervous system disorders.

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Although GW Pharmaceuticals has competitors, the company’s capital raise, market cap, and FDA approval put GW Pharmaceuticals in the driver’s seat for U.S. commercial production of  CBD-based medicine.

It is possible that GW Pharmaceuticals will experience another huge boost shortly as its home country and the UK government are seriously considering the legalization of medical marijuana. The ability to obtain Epidiolex remains very restricted for now in the UK; extreme epilepsy sufferers must bear the burden of proof as well as apply for special permits. However, due to the drug’s successful clinical trials and the nod from the FDA, the UK government has started to relax its stance a bit. England’s chief medical officer played a big part in that by vocalizing support for the effectiveness of the CBD-based drug. If and when the UK makes their move, GW Pharmaceuticals could experience a strong surge in sales from the UK domestic market at the same time it is seriously ramping up drug exports to the United States.

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