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GW Pharmaceuticals (GWPH) Stock Gains on Buyout Rumors
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GW Pharmaceuticals plc’s shares gained 23.6% after Reuters published a report that many drugmakers have approached the company for a potential acquisition. GW Pharma has hired investment bank, Morgan Stanley (MS - Free Report) , for managing the proposals.
However, both GW Pharma and Morgan Stanley have refused to comment and the prospective buyers remain unidentified.
What Makes GW Pharma a Promising Acquisition Target?
UK-based GW Pharma is a biotechnology company focused on the discovery, development and commercialization of novel therapeutics from its proprietary cannabinoid product platform across a broad range of disease areas. Currently, the company has one marketed product in its portfolio, Sativex, which is approved outside the U.S. for the treatment of spasticity associated with multiple sclerosis.
Companies could be interested in a buyout because of GW Pharma’s lead cannabinoid candidate, Epidiolex, a liquid formulation of pure plant-derived cannabidiol. Epidiolex is currently in phase III development for the treatment of several indications including Dravet syndrome, Lennox-Gastaut syndrome (LGS) and tuberous sclerosis complex.
On its third-quarter fiscal 2016 conference call, GW Pharma stated that it has held a pre-new drug application meeting with the FDA in Jul 2016 to determine the regulatory path forward for Epidiolex. According to the company, the agency’s guidance was both positive and supportive and it expects to seek an FDA approval for the candidate in both the Dravet syndrome and LGS indications in the first half of fiscal 2017. Moreover, the company anticipates simultaneous approval for both the indications. Notably, GW Pharma has already started pre-launch commercialization activities for Epidiolex.
The company also plans to commence a two-part pivotal phase III study on Epidiolex for the treatment of patients with infantile spasms in the fourth quarter of fiscal 2016.
We note that Epidiolex enjoys Orphan Drug status in the U.S. for the treatment of all four of these severe infantile-onset, drug-resistant epilepsy syndromes. Epidiolex has also received Fast Track status in the U.S. and Orphan status in the EU for Epidiolex for the treatment of Dravet syndrome. Meanwhile, GW Pharma is working to expand the potential market opportunity of Epidiolex by targeting orphan seizure disorders.
Epidiolex, if approved, could bring in multi-million dollar sales for the company. Apart from Epidiolex, GW Pharma has a deep pipeline of additional cannabinoid-based candidates targeting indications like autism spectrum disorders, glioma, schizophrenia and type II diabetes.
Another cannabinoid developer, Insys Therapeutics, Inc. , rose 5.2% on the news.
Evidently, mergers, acquisitions and licensing deals in the health care sector are not about to slow down any time soon. Thus, we expect investor focus to remain on further updates on such acquisition rumors surrounding GW Pharma.
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GW Pharmaceuticals (GWPH) Stock Gains on Buyout Rumors
GW Pharmaceuticals plc’s shares gained 23.6% after Reuters published a report that many drugmakers have approached the company for a potential acquisition. GW Pharma has hired investment bank, Morgan Stanley (MS - Free Report) , for managing the proposals.
However, both GW Pharma and Morgan Stanley have refused to comment and the prospective buyers remain unidentified.
What Makes GW Pharma a Promising Acquisition Target?
UK-based GW Pharma is a biotechnology company focused on the discovery, development and commercialization of novel therapeutics from its proprietary cannabinoid product platform across a broad range of disease areas. Currently, the company has one marketed product in its portfolio, Sativex, which is approved outside the U.S. for the treatment of spasticity associated with multiple sclerosis.
Companies could be interested in a buyout because of GW Pharma’s lead cannabinoid candidate, Epidiolex, a liquid formulation of pure plant-derived cannabidiol. Epidiolex is currently in phase III development for the treatment of several indications including Dravet syndrome, Lennox-Gastaut syndrome (LGS) and tuberous sclerosis complex.
On its third-quarter fiscal 2016 conference call, GW Pharma stated that it has held a pre-new drug application meeting with the FDA in Jul 2016 to determine the regulatory path forward for Epidiolex. According to the company, the agency’s guidance was both positive and supportive and it expects to seek an FDA approval for the candidate in both the Dravet syndrome and LGS indications in the first half of fiscal 2017. Moreover, the company anticipates simultaneous approval for both the indications. Notably, GW Pharma has already started pre-launch commercialization activities for Epidiolex.
The company also plans to commence a two-part pivotal phase III study on Epidiolex for the treatment of patients with infantile spasms in the fourth quarter of fiscal 2016.
GW PHARMA-ADR Price
GW PHARMA-ADR Price | GW PHARMA-ADR Quote
We note that Epidiolex enjoys Orphan Drug status in the U.S. for the treatment of all four of these severe infantile-onset, drug-resistant epilepsy syndromes. Epidiolex has also received Fast Track status in the U.S. and Orphan status in the EU for Epidiolex for the treatment of Dravet syndrome. Meanwhile, GW Pharma is working to expand the potential market opportunity of Epidiolex by targeting orphan seizure disorders.
Epidiolex, if approved, could bring in multi-million dollar sales for the company. Apart from Epidiolex, GW Pharma has a deep pipeline of additional cannabinoid-based candidates targeting indications like autism spectrum disorders, glioma, schizophrenia and type II diabetes.
Another cannabinoid developer, Insys Therapeutics, Inc. , rose 5.2% on the news.
Evidently, mergers, acquisitions and licensing deals in the health care sector are not about to slow down any time soon. Thus, we expect investor focus to remain on further updates on such acquisition rumors surrounding GW Pharma.
GW Pharma currently has a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Corcept Therapeutics Inc. (CORT - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>