The U.S. Food and Drug Administration on Monday announced the approval of GW Pharmaceuticals PLC- ADR GWPH’s cannabidiol-based Epidiolex for the treatment of two rare childhood-onset forms of epilepsy that are commonly treatment-resistant.
“The acknowledgement by the FDA of cannabis’ potential medical efficacy is likely to rekindle debates as to the proper classification of cannabis, and particularly cannabidiol (CBD), the main active ingredient in GW’s product, under the Controlled Substances Act,” Harrison Phillips, vice president at Viridian Capital Advisors, told Benzinga back in April.
Cantor Fitzgerald analysts Elemer Piros and Justin Kim reiterated an Overweight rating on the stock, and increased their 12-month price target from $205 to $235/ADS.
“With the approval, GW Pharmaceuticals was granted a rare pediatric disease priority review voucher,” the note said.
Epidiolex has become the first FDA-approved drug containing a purified drug substance derived from cannabis.
“While Epidiolex is derived from cannabidiol (CBD), the FDA noted it does not cause intoxication or euphoria that is seen in tetrahydrocannabinol (THC). Additionally, Epidiolex is the first FDA approval for the treatment of patients with Dravet syndrome, and the first in a new category of anti-epileptic drugs (AEDs),” the analysts said.
Piros and Kim highlighted the encouraging fact that Epidiolex hadn't received a formal Boxed Warning, and a few upcoming catalysts for the company, including the DEA’s rescheduling meeting within the next 90 days, “an Epidiolex launch in fall 2018, and EMA decision by 1Q19. Additionally, the company will initiate a cannabidivarin (CBDV) investigator-led placebo controlled trial in autism in 3Q18 and a CBDV open label trial in Rett syndrome in 4Q18.”
GW Pharma shares traded down about 4 percent to $145.05 at time of publication.
Photo by Javier Hasse.
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