Gw Pharmaceuticals Share Discussion Threads

[nodding] 21/10/2016 15:37

Does anyone think that the timing of the delisting has any significance? GW could have given us more time to anguish over the tax situation, it would not have cost them anything.

5th December coincides with the AES presentation, but I can’t read anything into that.

With some imagination I can believe that there is less chance of an M&A event before the ADR conversion period end, but it feels kinda flimsy

[future financier] 21/10/2016 14:34

.... but if the shares are just sold to Citibank then they can issue the ADRs by simply dividing the number of shares by 12 - and I would imagine (but do not know for sure) that the agreement with GWP for their acting as the Depository bank for the ADRs requires them to do this without charge. Hence no dealing or currency costs or risks?

[etarip] 21/10/2016 13:49

I have been working my way through the list on this website:

hxxps://the-international-investor.com/comparison-tables/uk-international-stockbrokers

for those interested.

This looks like the only broker you can deal in dollars:

"However, unlike a number of other UK stockbrokers, TD Direct offers multicurrency facilities allowing you to hold foreign currencies in your account, so clients should aim to minimise the FX cost by making currency conversions as infrequently as possible. In addition, the firm will accept deposits in foreign currency, so you could consider using a low-cost foreign exchange transfer firm to pay in funds rather than exchanging currencies within the account."

[future financier] 21/10/2016 13:34

Its ridiculous that this is being rushed through by GWP - nobody has a proper opportunity to understand the ramifications and make appropriate arrangements. Certainly the impression I got from TD was that this could all be handled by them without having to go to cash and carry the forex and dealing costs and risks - but I will have to wait for their document on this.

[etarip] 21/10/2016 13:10

Thanks FF & 123

I will check TD next week.

One of my concerns that when selling the broker uses an exchange rate that is punishing. I would like to be able to sell and be paid in dollars. Then I can go a company like HiFx to get a good rate of exchange.

If you delay conversion after Dec 2 then according to GWP letter to shareholders you MAY have to pay UK stamp duty or SDRT. Either way Barclays will not hold an unlisted stock in a pension wrapper.

[future financier] 21/10/2016 12:51

TD promised me they would be sending out something on this shortly .........

[123prezzie] 21/10/2016 12:02

etarip. Try TD Direct, but be cautious. They told me that I could hold GWPH ADRs in an ISA after 2 Dec, so I guess the same would hold for an SASS. My reason for advising caution is that the GWPH case is unusual and I don't think TD gave my question enough investigation (see my post 8854). Please let us know if you find a solution.

[future financier] 21/10/2016 12:00

etarip - do Barclays require you to sell - or will they allow you to retain the ords? Just spoken to TDW and they have yet to decide what their stance will be - although they did say that if I continued to hold the ords they could convert to ADRs at any time. That would be the simplest solution - it would just mean that you would not get an online valuation of the shares in your portfolio.

[etarip] 21/10/2016 11:26

joosepi: Thanks I gave the Halifax a call and they will not open an account for a pension plan.

[joosepi] 21/10/2016 11:10

Halifax but see the following:

How to Buy ADRs:

You can buy ADRs through most online brokers. A seamless transaction with straight forward commissions offers peace of mind over duties or other transaction costs.

Trade Settlement: There are no hassles with currency conversion or duty costs when buying ADRs.

U.S. investors also enjoy familiar settlement and trade clearance. Institutional and retail investors alike may buy ADRs to cut transaction expenses.

[etarip] 21/10/2016 10:34

The shares that I have in my SASS pension plan are held by Barclays Stockbrokers. They say they will not hold the ADRs. I have to find a new online stock broker. Can anyone recommend one who will agree to hold the ADRs?

[123prezzie] 21/10/2016 10:31

nodding. Good suggestion on Trust but life is complicated enough, so (subject to new ideas here and elsewhere), I'll take the simple route.

cfb. I have been told by one broker that GWPH ADRs can't be held in an ISA after 2 Dec because they won't have a primary quote elsewhere. Another broker (after less research)disagrees, so we'll have to wait for a definitive decision.

[cfb2] 20/10/2016 23:19

nodding: I'm in a similar situation to you. I thought I was clever shuffling the majority of my shareholding into an ISA. I've just contacted my ISA provider to see if they've got any bright ideas but I believe I'm going to have trade these as ADRs.

I expect GS advised GW to do this and it makes sense in almost every respect except being a pain to their long term UK holders. I don't think they'll lose much sleep over it though :)

CFB

[neilrr] 20/10/2016 23:03

GWPH up nearly $8 after the close in NY to $132.50.

Can't see any news. Wonder what's up.

[ih_406638] 20/10/2016 20:55

123, I would not say that you have to hold until death to benefit from the BPR. It can happen that way, and people certainly do use Aim shares to mitigate IHT on death, but it is not the only way to achieve the benefit from BPR. Actually you may not have the option of holding until death. If Nasdaq listed Bigpharma Inc buys the ord shares and ADRs for cash then your BPR will disappear (no BPR on cash). If the buyout is in the form of Bigpharma shares for GW shares/ADRs, then your BPR still disappears (no BPR on Nasdaq listed shares). If there is no buyout then there is no change to your unconverted shares and BPR will continue as before.

So, if you believe a buyout will indeed happen then you have from now until the buyout event, in which to use the BPR before you lose it. Death is the obvious way to trigger the BPR, but you may feel this is too drastic. Another way is to transfer your shares to a trust you have created. The transfer would trigger the BPR. The value of your estate on death would therefore, be made smaller, resulting in less IHT being charged. The trust beneficiaries could be the the same people as those named in your Will. Instead of inheriting via your Will (after 40% tax) they instead acquire the shares, or shares value, via the trust. It's a big subject

[steeplejack] 20/10/2016 19:38

Holders should count their blessings ,at least everyone is sitting on profits.Ordinarily,delisting from an exchange is the ruse of junior mining stocks like the one that a couple of years ago obliged me to realise a handsome loss when they decided to decamp back to Aussie .A Nasdaq ADR has a lot more in its favour than some Mickey Mouse listing in Sydney.Thing is AIM isn't cheap,A listing with all the trimmings can cost as much as a quarter of million quid a year and for what ,when GWP intend to fund raise primarilyif not now exclusively in the USA.I think I'll just buy the ADRs in the normal old way through my US broker.No fiddling about.

[123prezzie] 20/10/2016 18:14

FF. The RNS says
"GW's Ordinary Shares will continue to be traded on the AIM market until close of business on 2 December, 2016. Thereafter, shareholders can choose to maintain ownership of their Ordinary Shares but these Ordinary Shares will not be tradeable on NASDAQ in this form. In order to sell Ordinary Shares following the cancellation of the AIM listing selling shareholders will need to convert their Ordinary Shares into GW's ADRs"
So, it's Catch 22. You can retain your BPR status by retaining the ordinaries but you have to hold on till you die. If you want to sell or there is some other trigger, you lose the BPR on conversion into ADRs.
Nodding makes the point about getting HMRC's view but, as he implied earlier, you would be lucky to get them to answer the phone by then.
Anyway, my ISA holding is done for. It's a pretty top heavy number, so I'll have to sell at least half. I'll probably decide the rewards outweigh the risks on the other half, juggle assets and do a negative bed and ISA - and arrange to die before I have to convert into ADRs! Fortunately I have these with a broker who will put through the market on a modest spread (but a high charge).
If Goldman Sachs can afford to take a few risks, I suppose I can as well.

[future financier] 20/10/2016 14:56

123 - cn't see any way around your ISA problem - but I am not sure if I understand your initial point about selling shares in future. All that will happen (in term of the legal structure of the transaction) is that you sell your shares to the Depository bank i.e. Citibank? So what difference does that make?

[nodding] 20/10/2016 14:32

Random, 123, I do not claim to be an IHT expert but I do work in a related area of taxation.

IMO the unconverted ord shares will retain their BPR status. However, if you want to sell them, you cannot do so via a stock exchange, so I guess you are stuck with making a private sale - if you can find a buyer.

The ADRs are, I think, something of a sleight of hand. People buy them for the shares wrapped inside, not because they want an ADR(!), and their value is intimately tied to the ord shares. But, per the company HMRC accepted that some ord shares being in ADRs did not affect the BPR status of ord shares held outside of ASRs. Does the delisting change this? Probably not, but there is only opinion and the GW FAQ document to support that idea. To be certain I think you need to get HMRC’s view.

[123prezzie] 20/10/2016 12:57

Nodding. With respect to BPR, the advice I have received so far is that we are on a loser. Whilst it would seem to be possible to continue holding the UK ordinary shares in an ordinary share account, in order to sell (unless there is an over the counter market, which is most unlikely) they would have to be converted into ADRs before selling. Whenever that happens, a conversion would trigger the loss of BPR.
I am in an even tighter corner, as (cleverly, I thought) I managed to get all my GWPs into my ISA when the price was low. It seems I will be forced to sell before 2 Dec as I can't hold unlisted shares in an ISA and apparently ADRs which do not have a primary listing on another market cannot be held in an ISA. This last point has to be checked as I have had two conflicting views.
So, if we want to preserve BPR, we have to sell before 2 Dec and reinvest elsewhere.
The above are my views today and are not meant to be advice - in fact, I hope I am wrong. DYOR.
There is a very slight possibility for optimism as the statement says that, following the delisting, the "shares" (note that they say shares not ADRs) will only be tradeable on the NASDAQ market.

[randompoint] 20/10/2016 12:28

Nodding

The below doesn't give enough comfort?

"Following the AIM Delisting, GW’s Ordinary Shares should continue to be accepted by HMRC as qualifying as unlisted/unquoted securities for the purposes of certain specific UK tax rules (notably, the UK inheritance tax business property relief rules). Therefore, those Shareholders who elect to continue to hold GW’s unlisted Ordinary Shares should continue to be regarded as holding unlisted/unquoted securities under those same rules."

[wengerb] 20/10/2016 07:28

nodding. I emailed you.

[ih_406638] 19/10/2016 18:51

Wenger, re your post 8841. If we can see the expanded access programme as an analogue of the clinical trials then I think the future is bright for adult use of Edidiolex. As far as I can now recall, the EAP results were consistent across all patients and those patients were a mix of children and adults.

When CBDV has approval it might find itself crowded out of the market by Epidiolex, on and off label. I hope GW has something to say about this.

Those analysts never do put a figure on off label sales. Too speculative I suppose

[ih_406638] 19/10/2016 17:35

It used to be the case that the plain ord shares qualified for BPR if you held them for two years. This was because the shares met the qualifying conditions; one of which was not being listed on a recognised stock exchange. Aim is not a recognised stock exchange.

The Nasdaq is a recognised stock exchange so when the shares became dual listed there was a doubt over whether the shares still qualified for BPR. The company said they did because it was the financial instrument known as an ADR that was actually Nasdaq listed, and not the ord shares themselves. The company got confirmation of this from HMRC.

After 2.12.16 the ord shares will still exist but they will not be listed on any stock exchange, recognised or not. As such they will still meet the qualifying conditions and garner BPR. Presumably this will also apply to shares bundled into ADR's but to be sure you should take "advice", as recommended by the company. I think myself that there is only one opinion worth having, and that is HMRC's. Whether you can get it before the delisting date I rather doubt. HMRC are not renowned for their speed.

BPR is applicable not only to the estates of the deceased. It can save tax on certain lifetime transfers too.

[wengerb] 19/10/2016 15:18

Lord Protector. There must be optimism for a treatment from GWP for refractory epilepsy among adults. The recent phase III trial on Epidiolex for Lennox-Gastaut syndrome included some adults up to the age of 55. We have yet to see an efficacy by age group set of data.

More importantly, fairly soon, during Q1 2017, we'll see the top line data from a large Phase II trial of a new molecule, CBDV, on adults with refractory focal seizures/epilepsy. Success with that trial would point to an adult market for a GWP epilepsy product. Such an adult market would possibly represent sales greater than for Epidiolex.

The recent price target from Goldman Sachs discounts any sales for Epidiolex among adults and any sales of CBDV at all.