Evidence Proves that Cannabis has Medical Benefits

The Langone Comprehensive Epilepsy Center at New York University recently conducted a study into a drug that can treat people who suffer from serve forms of epilepsy. The drug is derived from cannabis and contains cannabidiol (CBD). The name of the drug is Epidiolex and it was produced by GW Pharmaceutical (GWPH).  

The study was conducted by Dr. Orrin Devinsky who is the director of the New York University Langone Comprehensive Epilepsy Center. The purpose of the study was to test the safety of Epidiolex and to determine how well it can be tolerated.

213 people (median age of 11) participated in the study and each participant suffered from a severe form of epilepsy. These participants have not responded well to available treatments and many have been diagnosed with Dravet syndrome and Lennox-Gastaut syndrome (LGS). The results of this study was presented at the 2015 American Academy of Neurology Annual Meeting.

Number of seizures decrease by an average of 54%

The American Academy of Neurology (AAN) issued a statement saying GWPH’s Epidiolex product, “may show promise,” in the treatment of severe epilepsy in children. For the 137 people who completed the 12-week study, the number of seizures decreased by an average of 54%.

Among the 23 people with Dravet syndrome who finished the study, the number of convulsive seizures had gone down by 53%. For the 11 people with LGS who finished the study, there was a 55% reduction in the number of atonic seizures, which cause a sudden loss of muscle tone.

GWPH is advancing its formal clinical development program in order to seek FDA approval for Epidiolex in the treatment of Dravet syndrome and LGS. In late March, the company commenced the first of two Phase 3 trials in Dravet syndrome. On Monday, GWPH commenced Phase 3 trials in LGS and they expect to report top-line data from this trial in early 2016.

Some participants report minor negative reactions to the treatment

Some participants experienced negative side effects to the medication. These negative reactions included diarrhea, decreased appetite and tiredness. A total of 12 people, or 6%, stopped taking the drug due to these side effects.

Dr. Devinsky is favorable on the initial results, however, he stated that more tests are necessary. Dr. Devinsky wants to conducts trials on larger test groups and utilize placebos during the tests to confirm the safety and effectiveness of Epidiolex.

Outlook

Shares of GWPH has quietly outperformed most of its fellow NASDAQ companies during 2015, but the company still trades at a discount to the average Wall Street price target. GWPH recently raised $167 million through a secondary offering which should give them the capital needed to execute on its growth initiates. The company operates in a capital intensive business and we think they have a lot of upside potential due to its deep pipeline of products. 

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Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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