In mid-2018, it became clear that the medical cannabis industry was going to have an approved novel drug derived from cannabidiol. The U.S. FDA last year approved Epidiolex, a proprietary product from GW Pharmaceuticals PLC (NASDAQ:GWPH). The drug is the first of its kind and it belongs to the ant-epileptic medications category.
Life threatening seizures
Epidiolex focuses on seizures in patients over the age of two years and who suffer from Lennox-Gastaut syndrome (LGS). Also, Dravet syndrome patients can benefit from the drug. Interestingly, the company also submitted a request for Marketing Authorization Application (MAA) to Europe’s EMA. The decision on the request is due any time this quarter.
LGS and Dravet syndrome are rare conditions that develop in childhood. Rare as they may be, the conditions are severe and before Epidiolex, there was no documented, effective medication specifically designed for these conditions. The conditions are resistant to treatment. Patients can experience multiple life-threatening seizures.
Commenting on the approval of Epidiolex last year, Epidiolex’s lead investigator, Orrin Devinsky, M.D., said, “I am delighted that my physician colleagues and I will now have the option of a prescription cannabidiol that has undergone the rigor of controlled trials and been approved by the FDA to treat both children and adults.”
As a result of sales from Epidiolex and another product, Sativex, GW Pharmaceuticals experienced a good run late last year. In late November and December, the firm got hit, like many other firms, by the market-wide selloff. Notably, the company’s stock lost 23.19% in the November-December period against the market’s 8.61%.
Nonetheless, market conditions are likely to favour the company this year, especially with the passing of the 2018 Farm Bill. Similarly, JP Morgan began coverage of the cannabis industry this year citing the bill. Interestingly, analysts at JP Morgan believe that the cannabis industry has great potential. Notably, the analysts gave the GW Pharmaceuticals stock a rating that represents 32% increase in value.
In a note, Cory Kasimov, an analyst at JP Morgan, said that GW is clearly ahead of competition in the industry.