GW Pharmaceuticals Set for Takeover
Shares in British medical cannabis giant GW Pharmaceuticals have jumped by 22% amid rumours that the company could be the subject of an imminent takeover bid.
According to reports, the Nasdaq-listed company has recently hired investment bankers at Morgan Stanley to ‘explore its options’ after being approached by an unidentified investor. These rumours have sparked a rush to buy shares in the business, despite the fact that according to a GW spokesperson, Morgan Stanley have been advising GW for many years.
Of course any prospective takeover bid would not exactly be a massive shock. Despite overall volatility, GW’s shares have been trending upwards thanks in large part to both the success of their first drug – Sativex – and promising trial results from their second – Epidiolex.
Sativex is already approved for the treatment of multiple sclerosis and cancer-related pain in many markets around the world, and is currently undergoing trials in the US with a view to achieving approval there – something which would expose it to the largest pharmaceutical drug market in the world. This approval is thought to be little more than a formality, as presumably is the approval of GW’s second major drug, Epidiolex.
Epidiolex is currently in late stage trials for two separate indications, and if and when it is approved, analysts predict sales of £1.4 billion per year in the US and Europe. It’s not difficult to see why there might be interest in purchasing the company at this time, just before its value skyrockets even further.
Not everyone is entirely convinced that all this excitement is justified just yet, however. Alan Brochstein, a founding partner at New Cannabis Ventures and Founder of 420 Investor, told benzinga.com that the timing of the supposed buyout interest “seems a bit premature.” His reasoning is quite simply that GW have not yet shared the full data from its Phase 3 clinical trials of Epidiolex, adding that he “…would expect potential acquisition interest to increase after the company files its NDA for Epidiolex in 4-10 months.”
Despite Brochstein’s understandable caution, it does seem as though GW could be on the brink of huge commercial success. As a result, the idea that one of the partners who distribute their drugs – Bayer, for example, or Novartis, both much larger companies – would decide that a buyout would be in their best interests does seem to ring true. However, GW are not short of cash, so could well decide to carry on going it alone, for now at least.
Whatever they decide, their success will continue to be a thorn in the side of the British government, who continue to insist that cannabis does not possess any medical or therapeutic properties. Every time GW’s stock rises, and the calls for cannabis to be rescheduled ring out loud and clear, their position becomes more and more untenable.
Next week, the All-Party Parliamentary Group for drug policy reform will publish the results and recommendations of its “Short Inquiry into the case for changing the categorisation of cannabis for medicinal purposes from Schedule 1 to a more appropriate Schedule.” The APPG’s recommendation is strongly expected to be that the government finally admits they’ve been wrong for decades and makes a meaningful change. If they do – and that’s an almighty if – it could have wide-ranging impact not just for patients but for GW Pharma as well.
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