Maxim Starts Cannabis “Market Leader” GW Pharmaceuticals At Buy

After the market close yesterday, Maxim Group announced that it had initiated coverage on GW Pharmaceuticals plc (NASDAQ:GWPH) – starting things off with a Buy rating and a price target of $135.00. At the time of writing, GW’s stock is trading about 11 cents higher at $115.93. The upside indicated by Maxim is about 16 percent.

According to Maxim analyst Lauren Chung, GW Pharmaceuticals stands as the market leader when it comes to cannabis therapeutics – especially with its Lennox-Gastaut syndrome treatment, Epidiolex, eligible for approval in 2018.

“FDA approval of a cannabinoid-based compound supported by scientific validation, clinical evidence with quality and potency assurances represent potentially a new generation of therapeutics,” the analyst told investors yesterday evening. “GW has first-mover advantage in epilepsy.”

Chung added that there is a crucial near-term catalyst coming up this summer when the company release Phase 2 data from its adult epilepsy therapy, GWP42006. The product is the next drug in GW’s pipeline.

On Tuesday, GW announced – via the American Academy of Neurology’s (AAN) press release on the matter – new positive data from a second Phase 3 trial evaluating Epidiolex in adults and children diagnosed with LGS. In the trial, which was named the GWPCARE3 study, using Epidiolex along with the patients’ preexisting treatment regimens considerable reduced drop seizure frequency. The efficacy was observed with both the 10 mg and 20 mg daily doses.

In the 14-week clinical program, the 10 mg and 20 mg groups experienced a median drop in monthly seizures of 37 percent and 42 percent. Patients in the placebo cohort, on the other hand, had a reduction of just 17 percent. Additionally, a statistically significant number of the trial participants treated with Epidiolex had a 50 percent or greater drop in monthly seizures versus the placebo group.

Moreover, 66 percent of the 10 mg group and 57 percent of the 20 mg group said they had an improvement in their disorder overall – compared to just 44 percent from the placebo group.

The product was observed by researchers to be generally well-tolerated, and adverse events that were recorded remained consistent with those seen in previous Phase 3 programs.

“This latest data from our Phase 3 program reinforces the potential of Epidiolex to become an important new medicine for patients who suffer from LGS and our planned NDA submission remains on track for the middle of this year,” said the company’s Chief Executive Officer, Justin Gover.

More results from the Phase 3 study will be provided at the AAN Annual Meeting – which is taking place on April 25th.

GW Pharmaceuticals is set to join the first publicly-filed cannabis exchange-traded fund (ETF), Solactive AG’s North American Medical Marijuana Index. The fund intends on tracking legally medical cannabis companies and other public companies that operate in the medical marijuana supply chain.

The index is nowhere near finished when it comes to filing, and hasn’t been approved by any regulatory agency yet.

The author of this article holds no position in any of the stocks mentioned above.

Tim is a contributing analyst for and specializes in equities trading and public offerings. He is a graduate of UCLA and began his career doing capital markets research for a top investment banking software provider.