Analysts Remain Upbeat On GW Pharma's Optionality With Epidiolex

GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) reported better-than-expected third-quarter revenues, thanks to strong sales of its cannabinoid epilepsy drug Epidiolex.

Benzinga · 11/06/2019 18:45

GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH) reported better-than-expected third-quarter revenues, thanks to strong sales of its cannabinoid epilepsy drug Epidiolex.

The Analyst

Bank of America analyst Tazeen Ahmad reiterated a Buy rating and $218 price target. (See track record here)

Cantor Fitzgerald analyst Charles Duncan reiterated an Overweight rating and lowered the price target from $229 to $174. (See track record here)

BofA Delves On Added Growth Drivers In 2020

GW Pharma's U.S. Epidiolex sales climbed 26% from the previous quarter and came in ahead of estimates, Ahmad said in a note. Continued patient adds and new doctor prescriptions were behind the strength.

After having penetrated the high patient concentration centers of demand during early launch, Ahmad said the company is likely to turn its focus on an additional tier of 1,000 prescribers, which present a meaningful growth opportunity going forward.

The company is planning sNDA filing for a third indication – seizures associated with tuberous sclerosis complex – in January. This, according to the analyst represented a large addressable patient opportunity.

Ahmad expects GW Pharma to launch in EU countries throughout 2020. As such, BofA raised its sales penetration estimate to $289 million in 2019 and $381 million in 2020.

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Cantor Impressed With Adoption, Expansion Opportunities

GW Pharma's decision to deploy resources in 2020 to target long-term care segment could be a capital-efficient growth driver for Epidiolex adoption, Duncan said.

The $554.7 million in cash/equivalents at the end of the third quarter and the net loss of $13.8 million reported for the quarter signal a solid financial position to fund ongoing commercial launches and pipeline expansion efforts, the analyst added.

Duncan expects multiple catalysts by year's end beyond Epidiolex, such as P3 initiation of Sativex in MS spasticity in the fourth quarter and advancement of the Neonatal hypoxic-ischemic encephalopathy intravenous CBD program.

Duncan also discussed the company's Epidyolex commercialization efforts underway in Europe and the label expansion efforts in the U.S. for additional indications such as TSC and Rett syndrome.

Cantor attributed the reduction in the price target for shares to the removal of cash and most value attributable to the platform from its model following the third-quarter results.

Price Action

GW Pharma shares fell more than 18% to $110.06 at time of publication.

Photo courtesy of GW Pharma.