- Project 10: GWPH Liu, Yi and Zhou, Bo 08-30-2015 PSIC © http://pstrand.com
2. Legalization of Marijuana (Cannabis) Marijuana, once a useful herb medicine in history, has been classified as a strictly controlled psychoactive substance in the last century. Recently, the need for medical use and the desire for recreational use have driven many legislations to loosen the control. Nature Outlook Special Issue (09.2015): www.nature.com/nature/outlook/cannabis **Marijuana Research Supports Its Safety and Benefits (2015) 神农
3. Medical Potential http://upliftingwellness.org/medical-cannabis/
4. Challenge and mismatch in use vs knowledge 1. Lack of research: Research has been undermined by a lingering assumption that all cannabinoids share the properties of THC (responsible for psychoactivity) — and regulators apply the same restrictions to all of them 2. How will rising use resulted from looser control affect public health? http://www.nature.com/nature/journal/v525/n7570_supp/full/525S4a.html
5. Cannabis compounds: gold mine? http://www.nature.com/nature/journal/v525/n7570_supp/full/525S2a.html
6. GWPH is world leader in Cannabinoid science Company Web Lead Product Financial InSys www.insysrx.com/ Cannabidiol Oral Solution (CBD) INSY (2.7B) Cannabis Science http://www.cannabisscience.com/ Phase I OTC:CBIS ($0.01/shr, 18M) Inmed Pharma http://www.inmedpharma.com Pre-clinical OTC:IMLFF (MCap: 8M) Phytecs http://www.phytecs.com/ Not focused. Also covers food, cosmetics Private
7. GW Pharma: Leader in Cannabis science
8. Controlled cultivation ● Concentrations of active substances vary a lot in marijuana products sold in stores. ● High levels of chemical consistency are important in applications made to medical regulatory authorities. ● At GW Pharmaceuticals' growing facility, cannabis clones are grown to ensure chemical consistency and to meet commercial supply capacity.
9. Pipeline 1. One “partnered” product approved in EU. 2. One product in phase III with two indications: two types of childhood epilepsy.
10. Epidiolex Cannabidiol a major phytocannabinoid accounting for up to 40% of the plant's extract. have a wider scope of medical applications than tetrahydrocannabinol (THC). An orally-administered liquid containing CBD has received orphan drug status in the US, for childhood epilepsy.
11. Childhood epilepsy: unmet medical needs
12. Dravet Syndrome 1. Syndromes are highly fragmented. 2. Dravet syndrome is a severe infantile-onset, genetic, drug- resistant epilepsy syndrome with a distinctive but complex electroclinical presentation. 3. 5,440 patients in US and 6,710 patients in EU under 20 [vii], [viii]. 4. no FDA approved treatments[xii]. SOC usually involves a combination of anticonvulsants: clobazam, clonazepam, levetiracetam,
13. Lennox-Gastaut syndrome LGS, is a rare disorder characterized by multiple types of seizures with slow spike wave complexes on EEG, such seizures usually beginning before 4 years of age. 14,000 – 18,500 patients in US [vi] and 23,000 – 31,000 patients in EU under 18. Drug resistance is one of the main features of LGS[vii]. Often requires broad spectrum anti- epileptic drugs and/or polypharmacy[viii]. It will also depend on the seizure type as some treatments that are effective for one type of seizure may worsen another. The treatments already approved by the FDA for LGS and used as adjunctive therapy with existing medications are: Onfi (clobazam); Banzel (rufinamide); - Topamax (topirimate)). http://www.gwpharm.com/Lennox-Gastaut.aspx
14. Trial efficacy results Only median, no distribution (stdev) results provided. 9% total pts, 16% Dravet patients were seizure free after treatment.
15. Epidiolex Trial Design: 2nd Darvet and LGS Add placebo control and randomized. previous trials were either controlled or randomized
16. Safety: lots of SAEs SAEs that were deemed possibly treatment related occurred in 10% patients
17. Chance of approval 1. Neurology low first round rate 37% 2. lots of SAEs 3. Controversial Marijuana 4. First time NDA, small company }=> First round CRL Effective with some patients. FDA will eventually approve it.
18. GW Pharma: peak sales of pipeline products Edison's healthcare team forecasts peak sales for [link]: Epidiolex in Dravet syndrome (DS) of $288m, THC/CBD (GBM) of $246m GWP42004 (type 2 diabetes) of $1,025m. Sativex peak sales potential of $814m – MS Spasticity at $278m (US $176m, ex-US $102m) and cancer pain at $536m (US $350m, ex-US $186m).
19. Financial - Valuation: - 12.2013 $48~59/share [link] - 04.2015 $~80/share [link] - Technical analysis: - downtrend along with bear market - a few price gaps to be filled (see pic) - 财报: little debt (funded by equity); expense up big recently due to phase III trial - public offering - $8.9 5.01.2013 (cheap IPO; was an ignored gem) - $86.83 6.18.2014 (We should buy at most half price of these guys) - $112 4.28.2015
20. PSIC Recommendation As of 9.27.2015: 1. GWPH, leader in cannabis science, is a good company. 1. Downtrend of GWPH and biotech sector in general is apparent. GWPH is overvalued at this price ($99). 1. Bear market will probably bring down the price further. It will be more attractive below $40, or even $20. 1. Let’s be patient and wait for the bear to do its job.