Goldman says marijuana-derived drug maker GW Pharma 'set to fly high'
In a note to investors this morning, Goldman Sachs analyst Salveen Richter initiated GW Pharmaceuticals (GWPH) with a Buy rating, as he expects a "solid" launch trajectory for the company's lead asset Epidiolex. Earlier this week, his peer at Leerink resumed coverage of the stock with a Buy-equivalent rating, citing also the potential uptake trajectory of its investigational drug. BACKGROUND: GW Pharmaceuticals is a pre-commercial-stage biopharmaceutical company focused on cannabis-based therapies in central nervous system disorders. Its lead asset is Epidiolex for Dravet Syndrome and Lennox-Gastaut Syndrome, two severe orphan epilepsies. 'SOLID' LAUNCH, UPCOMING CATALYSTS: Goldman Sachs' Richter initiated coverage of GW Pharmaceuticals with a Buy rating, saying it is "set to fly high." The analyst told investors that he expects a "solid" launch trajectory for the company's lead asset Epidiolex, and is modeling $1.6B in world-wide sales. Further, Richter sees GW Pharmaceuticals' shares trading higher on upcoming pipeline catalysts, including the publication of Epidiolex Phase 3 study data in Dravet syndrome in a top-tier medical journal in the fourth quarter, the American Epilepsy Society meeting, and the initiation of an Epidiolex Phase 3 study in infantile spasms in the fourth quarter, among a number of other events. GW Pharmaceuticals should submit the U.S. regulatory filing for Epidiolex in Dravet Syndrome and Lennox-Gastaut Syndrome in the first half of 2017, he noted, adding that he expects U.S. and EU launches in the second or third quarter of 2018. The analyst has a $189 price target on the shares. UPTAKE DRUG TRAJECTORY: On Tuesday, Leerink analyst Paul Matteis resumed coverage of GW Pharmaceuticals with an Outperform rating and $162 price target, saying he is "highly positive" on the potential uptake trajectory of Epidiolex, now that its approval appears mostly de-risked after three successful Phase 3 trials in Dravet Syndrome and Lennox Gastaut. Moreover, the analyst sees multiple points of optimism regarding a GW Pharmaceuticals-led global launch, including strong clinical profile and "hype" surrounding Epidiolex, significant level of unmet medical need in Dravet Syndrome and Lennox Gastaut and refractory seizures, a small subset of core prescribers, and the experience of CCO Julian Gangoli. PRICE ACTION: In morning trading, shares of GW Pharmaceuticals have slipped about 1% to $131.90.