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In a follow up to today’s article on GW Pharmaceuticals, we followed up with Todd Harrison, Managing Partner, CB1 Capital Partners; an emerging healthcare fund was quoted by CNBC’s Guy Adami.
Medical marijuana continues to gather major attention and we spoke with Mr. Harrison earlier this morning. The Managing Partner of CB1 Capital Partners provided us with what he thinks are bullish catalyst for GW Pharmaceuticals. These include:
- We’re waiting on secondary endpoints for the Glioma (brain cancer) P2 trials. Justin Gover (CEO) noted on the FEBRUARY earnings call that “we can’t provide secondary endpoints because we use Overall Survival (OS) and ‘too many people are still surviving.’ It’s now August and still no OS data; bodes well for whenever released; could be Monday w earnings (as they like to release data w earnings)
- Epidiolex NDA due to be filed any day now. This is big because as soon as the FDA determines ‘medical efficacy’, the DEA , by law, must reschedule. DEA laid this groundwork last summer when it said it is the purview of the FDA to determine medical efficacy and once that is done, the DEA will act in accordance.
- CBDV trials coming into year-end; this for adult epilepsy and very good buzz after Epidiolex reducing seizures by 50% in kids.
Nothing is ever a sure thing and Mr. Harrison said that some of the possible negatives for the biotech cannabis firm include:
- Perception that the more cannabis is legal, the less an appeal of a GWPH. Harrison believes this is flawed thinking as there are two forward routes: drugs from state dispensaries or medicine prescribed by doctor and covered by insurance. FDA must use it or lose it and way too much money at stake for them not to control (and tax) the process.
Technical420 agrees with this outlook and are favorable on the company’s risk-reward scenario. GW possess several catalysts for growth and we continue to view the firm as the best long-term cannabis biotech investment.
*Todd Harrison does hold a position in GWPH.
Medical marijuana continues to gather major attention and yesterday, CNBC’s Guy Adami announced that he is betting on cannabis-based medical company, GW Pharmaceuticals (GWPH).
Adami considers GW to not only be a play on medical marijuana but also a play on intellectual property. The company is a market disruptor and will be one of the biggest winners within the medical marijuana industry.
GW Pharma: An Industry Disruptor
GW Pharmaceutical is not a marijuana stock. It is a pharmaceutical company that already sells a cannabis-derived treatment for multiple sclerosis in 27 countries and it has by far, the most advanced pipeline of cannabis-derived products.
Not only does GW have the most advanced pipeline of products but it also has the most significant Wall Street coverage. Some of the largest banks in the world such as Goldman Sachs, Bank of America and Morgan Stanley, have Buy ratings on the firm. GW currently has an average price target of $154.95.
In late 2016, when Goldman Sachs initiated coverage on GW, it also placed a $390 acquisition price on the firm. Goldman Sachs was the first firm to issue a metric like this on GW and it is a testament to the value of GW’s intellectual property.
A Favorable Outlook
We are favorable on GW Pharmaceuticals as it continues to execute on its product pipeline and work to create value for shareholders. Shares of GW Pharmaceuticals have come off its recent lows and are up more than 10% in the last month.
GW Pharmaceuticals has several major potential catalysts over the next two quarters and we continue to view the company as one of the best marijuana investment opportunities.
Our favorable view is based off: 1) GW Pharma has a deep pipeline of products in advanced stages of FDA testing, 2) Clinical data on the company’s leading product candidate, Epidiolex has been very positive, 3) Management continues to execute and deliver on its promises, 4) GW has a strong balance sheet which will support the cost of clinical trials, and 5) Valuation is attractive as the average Wall Street price target implies more than 50% upside to current levels.
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