On June 3rd, Elemer Piros Ph.D., and analyst from Cantor Fitzgerald initiated coverage on GW Pharmaceuticals (GWPH) with a $181 price target.
The title of the report is “If I Had Epilepsy…” and in 2nd sentence of the report he finishes that statement by saying “If I had epilepsy, I’d want Epidiolex.” That was the statement from a volunteer physician who has experience working with GW Pharmaceutical’s epilepsy drug Epidiolex. Epidiolex is a liquid formulation of plant derived cannabidiol (CBD) oil that is administered through an oral spray.

In open label studies that consisted of 900 patients, data from 261 of those patients became available in December of 2015. The results were astonishing! There was approximately a 50% reduction in a test population that consisted of patients with highly refractory seizures. With these remarkable results, there were still skeptics who called out the studies for their lack of control group, which could cause an abnormal placebo effect. Those skeptics were silenced when GWPH released Phase 3 results for their controlled study on patients with a form of epilepsy called Dravet syndrome. That March study concluded from a 120 patient population that patients treated with Epidiolex achieved a 39% reduction in seizure frequency, while those given a placebo had a 13% decrease in seizures.

The analyst cites upcoming catalysts that could propel the stock higher including:
▪ Announce data from two LGS Phase III trials (June and Q3 2016)
▪ Data release from second Dravet Phase III trial (H2 2016)
▪ File NDAs for Dravet syndrome and LGS (H1 2017)
▪ Release THCV Phase IIb data in diabetes (Q3 2016)
▪ Release Sativex (THC:CBD) Phase IIa data in glioma (Q4 2016)
▪ Release CBDV Phase II results (adult epilepsy) (Q1 2017)
▪ Initiate NHIE Phase I trial (healthy subjects) (Q4 2016)

Cantor Fitzgerald has not raised any capital for GWPH and does not have any conflict of interest with GW Pharmaceuticals. With an independent firm making a strong buy recommendation; it speaks volumes about a company’s prospects. As GWPH tests CBD on a multitude of off label indications, Dr. Piros believes Epidiolex’s peak sales can reach $3 billion. At Phyto Partners, we believe that GWPH’s patent portfolio and extensive pipeline makes GWPH a best-in-class stock to play the medical cannabis space.

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