London-based GW Pharmaceuticals PLC (NASDAQ: GWPH) released its second-quarter financial report for fiscal 2016 on Thursday. The company, arguably the most well recognized pharma in the cannabis space, was applauded by the markets in March for its drug development efforts with a spike in value from around $36 to a high of $91.65 to try and halt a steady slide from an all-time high of $133.98 in June 2015.
Traders remained cautious ahead of the results, as this is a growth story, not one founded on sales like bigger pharma companies. Sativex, which is developed to treat spasticity associated with multiple sclerosis, is a current key growth driver for GW Pharma. Sativex is already approved for use outside the United States. The inspiring response from Sativex has led the company to evaluate its efficacy for treating spasticity among children aged 8 to 18 years due to cerebral palsy. The company is expected to report phase II study in this regard in the second half of the year.
At the same time, GW Pharma’s product pipeline consists of some of today’s interesting cannabidiol-based drugs, namely Epidiolex. In March, the stock soared after the company posted positive Phase 3 study data on Epidiolex for the treatment of patients affected by the Dravet syndrome. The study achieved the primary endpoint objective. Following which, GW Pharma immediately requested a pre-new drug application meeting with the FDA to define the regulatory pathway ahead.
More Clinical Discovery Ongoing – Orphan Drug Status Abounds
Alongside this, the company continues to conduct a second Phase 3 study on Epidiolex for Dravet syndrome, where it is in the process of enrolling 150 patients. Further, GW Pharma is undertaking a pivotal global development program on Epidiolex to test its efficacy for Lennox-Gastaut syndrome. Two trials are rolling for this indication. A second Phase 3 trial is fully enrolled and data from the first trial is anticipated for release in June.
As recent as April 2016, the company received Orphan Drug status for Epidiolex for the treatment of tuberous sclerosis complex.
GW Pharma also made note of the rest of the swath of research happening in the pipeline. These include an ongoing CBDV Phase 2 partial-onset epilepsy study in adults where data is targeted for Q1 next year; a completed THCV Phase 2 trial completed with data expected no later that Q3; THC:CBD a Phase 1b/2a study for the treatment of Recurrent Glioblastoma Multiforme (GBM) fully enrolled under FDA and EMA Orphan Drug designations with data expected in Q4 2016; a Neonatal Hypoxic-Ischemic Encephalopathy intravenous CBD Phase 1 trial expected to start in Q4 under Orphan Drug designation in the US and Europe; and expectations that a Phase 2 trial for patients with autism spectrum disorders will begin in Q1 2017.
Revenue for the six months ended March 31, 2016 (first half of fiscal 2016) was £6.3 million ($9.1 million) compared to £14.3 million (US$20.6 million) for the six months ended March 31, 2015. The reduction in revenue was expected as it was underscored by lower R&D monies collected related to the Sativex Phase 3 cancer pain trials.
The January-March quarter ended with GW Pharma having cash and cash equivalents of £192.7 million (US$277 million), down from £234.9 (US$338) million at the end of September 2015 (the end of fiscal 2015).
Net loss accelerated during the six months to March 31 to £34.5 million ($49.6 million) compared to £10.9 million (US15.7 million) in the year prior period.
There has been little response to the results, with shares essentially trading flat since the release. Investors are holding a tight line until more clinical results are delivered.
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