GW Pharmaceuticals PLC- ADR (NASDAQ: GWPH), which derives a lion's share of its revenues from its cannabinoid seizure drug Epidiolex, provides value for investors due to the potential for the drug to have wide utility over both orphan and non-orphan indications, according to BofA Securities.

The GW Pharma Analyst

Tazeen Ahmad maintained a Buy rating on GW Pharma with a $224 price target.

The GW Pharma Thesis

The update came after a teleconference call with an epilepsy specialist who treats about 260 patients, Ahmad said in a Tuesday note. (See her track record here.)

Out of 45 patients on Epidiolex, four to five patients have dropped off the treatment, translating to a 10% discontinuation rate, the analyst said.

The discontinuations had more to do with parental requests or adverse events, including diarrhea and liver enzyme elevations, rather than to a lack of efficacy, she said.

The specialist indicated that about 40-50% of patients were well-controlled on a dose regimen of 10mg/kg twice daily, although for non-responders, a dose above 20mg/kg was administered, Ahmad said.

The doctor reported comparable or slightly higher response rates compared to published data, according to BofA. About one-third of the patients showed improvement in sleep, adding to their quality of life.

The doctor suggested that out of the 10 tuberous sclerosis complex patients he follows, he is likely to treat three to five with Epidiolex after the sNDA for an expanded labeling to use it for TSC is approved, the analyst said.

GW Pharma announced Monday it has submitted the sNDA for TSC.

BofA estimates Epidiolex risk-adjusted peak sales of $2.5 billion in 2027 across Dravet syndrome, Lennox-Gastaut syndrome, TSC and off-label indications.

GW Pharma Price Action

The stock was trading 2.5% higher at $118.36 at the time of publication Tuesday.

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Photo courtesy of GW Pharma.

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Date Firm Action From To Nov 2019 Maintains Overweight Oct 2019 Initiates Coverage On Buy Oct 2019 Initiates Coverage On Buy

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