GW Pharmaceuticals' FDA Win Reinforces BofA's Bullish Thesis

The U.S. Food and Drug Administration approval of GW Pharmaceuticals PLC GWPH's epidiolex therapy for the treatment of seizures was expected — and reinforces the bullish case for owning the stock, according to Bank of America Merrill Lynch. 

The Analyst

Bank of America's Tazeen Ahmad maintained a Buy rating on GW Pharmaceuticals with a price target lifted from $170 to $200.

The Thesis

The FDA's approval of epidiolex was expected after an April advisory committee vote that included encouraging language, Ahmad said in a note. GW Pharma's sales team is already in place to proceed with targeting 68 different geographic regions, the analyst said. 

BofA is modeling for 100-percent likelihood of Epidiolex's success.

Proprietary and firsthand checks with doctors over the last three years confirms "high pent-up demand" and supports expectations for peak U.S. sales of $2.4 billion, Ahmad said. 

GW has five clinical catalysts, the analyst said:

  • DEA rescheduling.
  • Data from the second Phase 3 trial with epidiolex in Dravet syndrome in the bottom half of 2018.
  • Data from the Phase 1 trial of CBDV in seizures associated with autism.
  • An EMA decision on MAA for epidiolex in the first quarter of 2019.
  • Data from a Phase 3 trial with epidiolex in tuberous sclerosis complex in the first half of 2019.

Price Action

Shares of GW Pharmaceuticals were trading higher by 1.3 percent before the close Tuesday. 

Related Links:

'An Incredible Signal': 4 Experts Weigh In On Positive FDA Panel Vote For GW Pharma's Epidiolex

GW Pharma's Epidiolex Becomes First Cannabis-Based FDA-Approved Drug

Posted In: Bank of America Merrill LynchCannabisCBDEpidiolexepilepsyTazeen AhmadAnalyst ColorPrice TargetReiterationAnalyst Ratings

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