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Which Biotech Cannabis Stocks Are Levered to GW Pharma Results?

06/07/2016 9:07 am EST


Michael Berger

President & Founder,

Michael Berger is a leading expert on the cannabis sector, a market that is just in its early stages of development. Here, the Associate Editor of highlights his favorite cannabis stock and other stocks levered to its clinical trial results.

Although GW Pharmaceuticals (GWPH) is up more than 15% since we last recommended it, we remain favorable on the biotech company as it prepares to report results from its Phase 3 Clinical trial for Epidiolex, the treatment for Lennox-Gastaut syndrome (LGS).

GW Pharmaceuticals is one of the leaders in the cannabis industry. The British biopharmaceutical company was founded in 1998 and trades on the Nasdaq exchange.

GW commercialized the world's first plant-derived cannabinoid prescription drug, Sativex, which is approved for the treatment of spasticity due to multiple sclerosis in 27 countries outside the United States.

Product Pipeline Provides Catalysts for Growth

GW Pharmaceuticals has a deep pipeline of products that are in various stages of FDA testing and we expect this pipeline to create catalysts for GWPH for years to come.

The products in its pipeline include but are not limited to the following:

  • Two Phase 3 LGS trials: expects to release data for the first trial in June
  • Second Phase 3 Dravet Syndrome trial: data is expected in mid-2016
  • Phase 3 Tuberous Sclerosis Complex trial: Testing is currently underway
  • Phase 2 CBDV epilepsy study: data expected during the first quarter of 2017
  • Phase 1 clinical testing for NHIE: expects to start during the fourth quarter of 2016
  • Phase 1b/2a for Recurrent Glioblastoma Multiforme: data expected in the fourth quarter
  • Phase 2 study in type-2 diabetes: expects to release data in mid-2016
  • Phase 2 study of Sativex: data expected in the fourth quarter

Changing the Way Cannabis is Viewed

In mid-March, GW Pharmaceuticals changed the way many people view the cannabis plant after it reported positive results in its pivotal Phase 3 Clinical trial evaluating the safety and effectiveness of Epidiolex in the treatment of patients with Dravet’s syndrome.

After the company reported the results, GWPH soared from $38 to $91 and then consolidated its gains and is again reaching new highs. GWPH is trading slightly above its March high and we think the shares are attractive at current levels.

GWPH is trading well below its average Wall Street price target and we expect the company to report favorable data on its Epidiolex product during the next month. 

Stocks Levered to Clinical Results

After GW Pharmaceuticals reported favorable Stage 3 Clinical trial data in March, several cannabis stocks rallied more than 100%.

We expect to a similar trend happen if GWPH reports favorable data and the stocks levered to this announcement include Insys Therapeutics (INSY), Zynerba Therapeutics (ZYNE), Cara Therapeutics Inc. (CARA), Cannabis Sativa (CBDS), CV Sciences (CANV), and Cannabis Sciences (CBIS)