GW Pharmaceuticals plc (NASDAQ:GWPH) is a real mover in the biotechnology space heading into the start of a new week this week, with the company reporting on the outcome of an advisory panel meeting set up to discuss the future of a drug that could have considerable implications for GW’s revenue-generating abilities long-term if approved.
Here is what happened.
First, for anybody not familiar with GW, the company is a UK based pharmaceutical entity that (primarily) is trying to bring treatments to market that offer cannabis-based solutions to existing diseases that (in most cases) have little to no treatments available for them as things stand.
When we say cannabis-based treatment, this isn’t explicitly accurate, since the company generally uses only specific elements of the cannabis plant (CBD, primarily) in its drug development assets, but based on its having already picked up a regulatory approval in the US for a CBD-based drug and its subsequent legitimization as a revenue-generating pharmaceutical company, GW has long been heralded as one of the top picks in the booming US cannabis sector – despite its probably being more accurate to refer to the company as a healthcare company as opposed to a cannabis stock.
Anyway, that is all aside for the time being – let’s get to what just happened.
As reported above, the company just announced that an advisory panel, and specifically the FDA Peripheral and Central Nervous System Drugs Advisory Committee, has come to a conclusion on the back of a preset meeting that took place towards the end of last week.
As per the report, the panel unanimously recommended supporting the approval of the New Drug Application (NDA) of the drug in question, called Epidiolex, for the adjunctive treatment of seizures associated with Lennox-Gastaut syndrome (LGS) and Dravet syndrome.
Anybody already familiar with this space will know that both of these conditions are epilepsy related conditions that are incredibly severe in their implications for sufferers and that, as things stand, really don’t have any effective treatments on shelves in the US or abroad.
For a long time, colloquial evidence has suggested that CBD or other cannabis extract-based treatments can relieve symptoms (primarily seizures) but GW is the first company to have collected a substantial amount of quantitative data (substantial here being defined as enough to potentially support a regulatory approval) and to have presented this data packaged within an NDA to the FDA in the US.
So, for the committee to have voted unanimously in favor of an approval is a very big deal for this company and its shareholders as it implies a strong chance of GW picking up a green light from the agency in the US as and when the final review date comes around.
Just how much of a big deal is it?
To get an idea, it’s worth touching on some numbers.
Right now, GW has a market capitalization of a little over $3.6 billion and generated around $11 million in revenues during the 12 months to the end of the third quarter last year.
Analysts expect that the drug detailed above, Epidiolex, if approved, could generate peak annual sales of $601 million in Lennox-Gastaut and $195 million in Dravet syndrome, with the remaining indication of Tuberous Sclerosis Complex (TSC) (for which the company will chase approval subsequent to the outcome of the outstanding NDA) worth an estimated $255 million at peak.
Essentially, then, this current NDA could be worth close to $800 million in revenues annually for the company and, beyond that, and approval would imply a strong chance of a subsequent approval for the asset in the TSC indication, which would increase this annual revenue potential to more than $1 billion in the US alone.
So what comes next?
Now it is all about the FDA ruling. If the agency gives the green light for marketing of this asset in the US, we’re really going to see the company run as and when the decision hits press.
The PDUFA date for a final decision by the FDA is June 27, 2018.
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