GW Pharma Analysts Raise Estimates After CBD Drug Epidiolex Shows Strong Uptake

GW Pharmaceuticals PLC- ADR GWPH reported second-quarter earnings and revenue Tuesday that blew past estimates, sending its shares solidly higher Wednesday.

The Analysts

Morgan Stanley analyst David Lebowitz maintained an Overweight rating on GW Pharma and increased the price target from $234 to $238.

Cantor Fitzgerald analyst Elemer Piros reiterated an Overweight rating and $229 price target.

Morgan Stanley Assesses Epidiolex Performance, Prospects

GW Pharma's CBD epilepsy medication Epidiolex saw strong sales of $68 million in its second full quarter on the U.S. market compared to the consensus estimate of $45 million, with 12,000 patients having received the therapy and a majority of them staying with the medication, Lebowitz said in a Wednesday note.

Morgan Stanley raised its 2019 Epidiolex sales estimate from $165 million to $291 million.

Lebowitz named the following takeaways from the earnings report: 

• Patient transitions to commercial product, high patient retention and strong demand in new patients were responsible for the big beat.
• Increasing adoption by adult patients bodes well for the company.
• GW Pharma expects the average dose to increase as physicians become more comfortable with administering the drug.
• The EU launch is targeted for the fourth quarter of 2019.
• The company remains on track to submit an sNDA for tuberous sclerosis complex in the fourth quarter of 2019, with a likely PDUFA action date of mid-2020.
• The Sativex clinical program for multiple sclerosis spasticity in the U.S. is expected to begin in the fourth quarter.

Cantor: Epidiolex Has Unprecedented Level of Awareness

After raking in revenue of over $100 million in the first half of 2019, Epidiolex is on track to become one of the most successful epilepsy drugs on the market, Cantor's Piros said in a Tuesday note. 

The number of patients to whom the drug was prescribed increased from 7,600 in the previous quarter to 12,000, and the number of physicians prescribing it climbed from 1,900 to 2,500, the analyst said. 

"This level of awareness is largely due to data from five successful pivotal trials in three different epilepsy conditions, coupled with the Expanded Access Program and patients transferring from open label expansion studies," he said. 

Cantor raised its 2019 and 2020 revenue estimates for GW Pharma. 

The Price Action

GW Pharma shares were trading higher by 3.55% at $157.83 at the time of publication Wednesday. 

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