GW Pharmaceuticals is a stock that we feel does not get enough attention when it comes to the CBD/Cannabis sector. Even at current levels, pulling back nearly 60 dollars per share the company still carries a 4.33-billion-dollar valuation. The stock had an eventful year with the CBD boom in the stock markets carrying this company to almost 200 dollars per share before getting caught up in the dramatic selloff and deep bear market that has plagued the entire sector since its peak in May. As this selloff continues, we need to re-evaluate our investment strategy do our best to accumulate quality companies at great prices. We are going to take a close look at GW Pharmaceuticals to see if now might be the right time to start buying.
GW Pharmaceuticals has been in the CBD space for much longer than many of these cannabis companies have existed. The company is headquartered in Cambridge, United Kingdom, which is one of the best locations for a CBD company as England’s stance on CBD is very supportive. Since 1998 the company has been developing and researching plant-derived cannabinoid therapeutics. Currently, the Company’s top cannabinoid product candidate is Epidiolex, which is a liquid comprised of pure plant-derived cannabidiol (CBD). The Company offers Sativex (nabiximols), which could be used for the treatment of spasticity due to multiple sclerosis (MS). The Company is also focusing on the development of its pharmaceutical product pipelines. These include Epidiolex for the treatment of Tuberous Sclerosis Complex and RETT Syndrome. Last year in June 2018, the FDA approved GW Pharmaceuticals product as Epidiolex® (cannabidiol) for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome. Patients 2 years or older could now seek treatment from Epidiolex® for these conditions. The product was launched in November 2018 and is now available by prescription in the U.S.
Since launching their product last year GW Pharmaceuticals has seen a tremendous jump in revenues year over year. The company’s revenue for the quarter ended June 30, 2019, was $72.0 million compared to just $3.3 million for the quarter ended June 30, 2018. This shows that GW Pharmaceuticals products are doing very well in the US market and should continue to grow as sales pick up and more people warm up to the thought of alternative medicines that are proven to work. With the U.S. market aside, the company is also planning a European launch in Q4 with France, Germany and the UK followed by Spain and Italy launches in 2020. As for their product pipeline, the company is also working on Sativex® (nabiximols) for the treatment of Multiple Sclerosis spasticity and will be targeting the U.S. market as well. There have been no new oral treatments developed in this niche for over 20 years.
It’s fair to say that GW Pharmaceuticals has found a formula that works and is currently capitalizing on the great opportunity CBD has to offer. We love how fast this company has grown revenues and with further product launches and the potential for more products to come on board, we feel that GW Pharmaceuticals still has a lot to gain. This stock could be caught in a tainted sector right now, but as fast as stocks can fall, market sentiment can change in a heartbeat. When things turn around, we feel that GW Pharmaceuticals has a lot to gain which puts this stock on the top of our watchlist for the later part of 2019.
GWPH shares were trading at $139.16 per share on Wednesday morning, up $1.08 (+0.78%). Year-to-date, GWPH has gained 42.89%, versus a 16.11% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...
