Marijuana-Based Drug Helps Kids With Rare Forms Of Epilepsy In Studies
An oil derived from marijuana plants proved effective in a rare form of epilepsy that afflicts 30,000 Americans, its maker said this morning.
GW Pharmaceuticals, a London-based company, is developing a drug called Epidiolex, a pharmaceutical-grade form of cannabidiol (CBD), an oil found in the marijuana plant. GW says Epidiolex, an oil that is taken orally, contains only trace amounts of tetrahydrocannabinol (THC), the compound that makes pot smokers high. GW grows marijuana plants that have been bred to produce lots of CBD and very little THC in greenhouses in England, and then purifies its oil using a manufacturing process.
“Between the plant itself and the processing steps which are being taken, the product ends up being pure CBD,” says GW’s chief executive, Justin Gower.
In March, GW posted results of another study of Epidiolex that showed it was effective in Dravet syndrome, a form of epilepsy that afflicts just 6,000 children in the U.S. That result led GW Pharmaceuticals shares to surge 120% in a day to $85.
Today’s news is that Epidiolex showed similar efficacy in a second clinical trial, for a second rare epilepsy, Lennox Gastaut Syndrome, which afflicts both children and adults. The average patient in the study was having 74 seizures that resulting in hitting the floor a month. Eighty-six patients received Epidiolex on top of their current epilepsy medications, and 85 received placebo. Those receiving Epidiolex saw seizures reduced 44%, compared to a 22% reduction for those in placebo.
The drug did have side effects. Seventy-four patients on Epidiolex had an “adverse event,” compared to 59 in the placebo group. Side effects included diarrhea, sleepiness, decreased appetite and vomiting. Most side effects were mild or moderate, GW Pharmaceuticals says. Twelve patients on Epidiolex discontinued treatment due to side effects, compared to one in the placebo group. And there was one death in the Epidiolex group, which the company says does not appear to be related to the treatment.
GW Pharmaceuticals says that it will file with the Food and Drug Administration for approval in the first half of 2017 for both Lennox Gastaut and Dravet. That will require that a second study on Lennox Gastaut, currently ongoing, is also positive. A second study in Dravet is ongoing, but GW says it will not be required for approval.
Shares in GW Pharmaceuticals are up just 10% to $92 based on the news. The big question among investors is whether the stock is fully valued, a calculation that depends on exactly how big a market there is for Epidiolex. Bullish analysts at Leerink, an investment bank, say that GW is a buy based on a forecast that in 2022 the company will have annual sales of $1.2 billion. This morning, analysts at Janney Montgomery Scott issued an ill-timed report saying to sell the stock. Janney’s logic: its analysts expect 2022 sales of just $375 million.
One risk that shouldn’t affect the company: Britain’s pending exit from the European Union–”Brexit”–which shocked financial markets on Friday. “I can’t really see it having a material effect,” says Gover. “We’re importing a finished pharmaceutical ready for distribution and sale into the United States. I can’t see that system being impacted by Brexit in any way.”
Where GW could have a big impact is on the continuing debate about the use of marijuana for medial purposes. Clearly, CBD can help some kids with epilepsy. The question will be if it should ever be home grown, or if the market should be given over to more expensive pharmaceutical preparations. Another firm, Insys Therapeutics, is developing a fully synthetic form of CBD.
Published: June 27, 2016