Gw Pharmaceuticals Share Discussion Threads

[etarip] 04/7/2016 16:09

That all looks encouraging. Thanks for the reply.

[nodding] 04/7/2016 15:23

That is a difficult question. If you are looking for a future eps it is probably simpler and great deal more convenient to assume that, in five(?) years time, the sales income from Epidiolex will cover all operating costs, costs of production and tax. No doubt there will still be a profit after that. The addition of GWP42004 sales would therefore, be pure addition to the eps. It’s a stab in the dark, but hey, it is easy!

Here are averages of three p/e ratios for US pharmas -



32, 41 and 27.

And here is some more -

[etarip] 04/7/2016 09:07

nodding
What do you think the profit margin would be?

[ih_406638] 02/7/2016 15:48

A search on global market size produces a wide array of numbers. How about $157bn:



Even without the diagnostics I think there must be an enormous gap between this and Edison’s estimate. And there are plenty of other figs, all of which seem to be greater than Edison’s. Quite possibly there is something here I am not understanding.

Here is a nice picture which breaks down the component parts -



The pink anti-diabetic drugs bit does look like $10bn, and that would fit with Edison. But I cannot help thinking that if GWP42004 does indeed restore the production of insulin then the blue and orange bits of the pie chart will be taken over by our wonderful company. At this point I may fall into a greed-fuelled delirium

I would myself be inclined to use 263m ord shares as the total of issued shares (many of which have been bundled into ADR’s). See the 30.6.16 RNS

[etarip] 02/7/2016 14:01

I have read that the Type 2 Diabetes market is set to grow to about $39 billion.
hxxp://www.pmlive.com/pharma_news/type_2_diabetes_market_set_to_hit_$39bn_by_2021_785468

Edison expects GWP to get 10% of the market which would give a $3.9 billion gross p.a..

If the net profit after tax on that in a very competitive market is say 10%
that gives an annual profit of $390 million and a earnings per ADR of about $17.79

The number of ADRs is 21.92 million (263 million shares divided by 12.)
If a P/E ratio of 9 times applies (same as GSK) it would value an ADR at $160.15

Discounting back from four years when it might be achieved at 10% p.a. gives about $105.08 per ADR

Edison gives a 30% chance of success which taking the above assumptions giving a value today of $31.52

Edison does not give a break down of its $98.4 ADR valuation by product.
It also gives a sales figure of $1.024 million representing 10% of the market that implies a market of $10.24 billion a quarter of the size I have taken.

Any comments on my assumptions or calculations would be appreciated.

[ih_406638] 02/7/2016 13:45

Agreed cfb. And it is a large market supported by people’s unwillingness to live a healthy lifestyle.

Assuming the trial turns out well, it will be interesting to see what GW have to say. I think they have not mentioned diabetes for some time.

[etarip] 02/7/2016 11:20

Many thanks nodding

[cfb2] 02/7/2016 00:55

nodding: A diabetes drug would be moving into a crowded market place. Margins are likely to be small. Also for type 2 diabetes research has shown that exercise and calorie control have very positive effect alone. I've seen health advisors recommending gastric bands as a cost effective solution to a future diabetic epidemic.

If they see positive results, I can see GWP selling their research to one of the many companies already in that sector. Perhaps to compliment another company's pipeline.

CFB

[ih_406638] 01/7/2016 23:06

Here you are -



At this stage I suspect that the 10% is a stab in the dark

[etarip] 01/7/2016 20:04

nodding:

What does Edison value that 10% market share in their valuation model?

[ih_406638] 01/7/2016 15:49

Edison’s note of 8.6.16 has a 10% market share for GWP42004 (diabetes) in their valuation model. This projects peak sales of $1.024bn. Potentially therefore, this could be the biggest thing in GW’s pipeline.

[samurai48] 01/7/2016 15:40

Thank you WengerB.

I wonder at what point, and how, GW go about selling drugs like Sativex that GWP has developed and possibly eventually a drug for T2D and on what terms bearing in mind that they may have little long term strategic significance for GWP or else cost GWP too much to bring to market.

I imagine that GWP would want to keep control of the manufacturing process as its a key part of GWP's IP.

I also imagine that a big pharma might find it easier just to buy the company rather than the drugs that GWP puts on the block for sale.


S

[wengerb] 01/7/2016 10:45

The company was recently more specific and said that the p2 t2d data was due in June/July.

From memory the sample size is quite high for a p2 "proof of concept" trial. The trial has been described as a dose-ranging exercise.

Assuming that the data is positive in some respects, the results will need careful interpretation. T2d is a multi-symptom condition and the question will be: does GWP's THCV pill represent an advance in the treatment of t2d? This might appear to be a statement of the obvious but it will have to be a judgment made by the company and senior clinicians.

The earlier, very small scale p2 trial results showed a remarkable improvement in the performance of patients' beta cells. These are cells in the pancreas that secrete insulin. If the new trial confirmed this effect that would seem to be an exciting result.

One thing that is clear is that it's highly unlikely that GWP could pursue the development of a t2d drug without the resources of a much larger industry partner. The scale of the necessary p3 trials would be very much larger than anything GWP has ever previously considered and such trials would cost more than any sum that GWP might wish to put at risk.

[samurai48] 29/6/2016 22:17

Whats the next significant news from GWP?

Type 2 Diabetes
GWP42004 Phase 2 dose ranging trial fully enrolled

data due Q2/Q3 2016

[ionlypostafterbbms] 28/6/2016 15:14

The important thing about the FT Alphaville link (apart from all the scientific mumbo-jumbo) is their change of heart.

Previously, they were open sceptical about GWP, it's products & future. "Only for the brave" I remember as one of the sign off lines when they discussed it before.

Now it's "Fingers crossed."

[ionlypostafterbbms] 28/6/2016 14:27

You're welcome WB but I can't claim any credit, I just C&P'ed it from

[wengerb] 28/6/2016 13:46

IOnlyPost etc.

Thanks for all this detail.

[ionlypostafterbbms] 28/6/2016 13:29

The FT Alphaville Market Live boys are coming around!
11:57am.



BE GW requested, repeatedly.

GW Pharmaceuticals PLC (GWP:LSE): Last: 555.00, down 11.5 (-2.03%), High: 579.50, Low: 533.50, Volume: 198.44k

BE Promising news yesterday on Epidiolex, which seems to have gone through the LGS Phase III without too much trouble.

BE Plus there was a positive read on the Dravet stuff previously announced.

BE This is all quite promising. I know we’ve been cautious about GW in the past, due not least to its tenfold rerating after joining Nasdaq, which might or might not have been on some confusion among CNBC viewers about what it actually does …..

BE But the drug seems to work, treating stuff where treatment options are currently close to zero.

BE Leerink are positive, as always.

• Bottom Line: This morning, GWPH announced positive results for
its 1st Phase 3 study for Epidiolex in Lennox-Gastaut Syndrome
(LGS). We offered a preliminary reaction here (LINK); our view remains
positive after the conference call. Treatment with Epidiolex showed a
22% (44% Epidiolex vs 22% placebo) effect size that was statistically
significant (p=0.0135). GW noted that the second LGS phase III study
will read out in late 3Q16, and mgmt. expects to hold a pre-NDA meeting
on LGS in 2H16. We are raising our PT to $138 from $130 on a higher
probability-of-success in LGS (now 85% from 75%) and a slightly higher
probability of approval in Dravet (90% from 85%). Reit. OP on GWPH.

• Ph3 LGS study succeeds; Epidiolex shows statistically significant
benefit on monthly drop seizures versus placebo (p=0.0135). The
phase 3 study recruited 171 patients, randomized 1:1 to 20mg/kg/day
Epidiolex or pbo as add-on to current anti-epileptic treatment. Patients
in the study appear to be fairly treatment-resistant on average, as
participants were taking approximately 3 anti-epileptic drugs (AEDs) and
had previously failed/tried an average of 6 other AEDs. At baseline, the
median drop seizure frequency was 74. Treatment with Epidiolex showed
a 22% (44% Epidiolex vs 22% pbo) effect size that was statistically
significant (p=0.0135). Encouragingly, GW noted that the robustness of
the efficacy was also validated through secondary efficacy endpoints, one
of which “responder rate” is the primary measure for EMA.

• Safety profile similar to Dravet study, with a similar adverse event
rate but a modestly higher serious adverse event (AE) rate. 86% of
Epidiolex patients experienced an adverse event compared to 69% on
pbo with the most common adverse events (occurring in greater than
10 percent of Epidiolex-treated patients) were: diarrhea, somnolence,
decreased appetite, pyrexia, and vomiting. Twenty patients on Epidiolex
experienced a serious AE (9 of which were deemed treatment related)
compared with 4 on placebo. Notably, GW noted that the types of AEs
observed were similar to that seen in the Dravet study, with no change to
Epidiolex’s safety profile.

• Commentary on clobazam drug-drug interaction encouraging.
As expected, GW did not offer detailed data on subgroup analyses.
However, regarding the Epidiolex/clobazam drug-drug interaction, GW
noted: (1) 50% of pts were on clobazam, & efficacy on/off clobazam
was “good” (2) some Epidiolex-treated LGS patients who were not on
clobazam became seizure free during the study and (3) more than half
of the 50% of patients who were not on clobazam had tried and failed
clobazam previously.

BE And Morgan Stanley.

Disclosed data are impressive, but some skepticism likely to remain until we see the full data set. The data released today reaffirm that Epidiolex is an active antiepileptic drug, proving to be additive to patients already on antiepileptic agents but not obtaining satisfactory seizure results. We do think some skepticism will remain until the full details are disclosed at an upcoming medical meeting and expected journal publication given that key secondary endpoints, including a responder analysis, were not discussed. As a reminder, this endpoint, which measures the percentage of patients having at least a 50% reduction in seizures, is an important endpoint for ex-U.S. regulators and is also an important metric to better understand commercial appeal. Some physicians may require a 50% reduction in seizure frequency to maintain a patient on the drug once it is approved. Publication of data from the first Dravet Syndrome trial is expected in 4Q16, and additional data are likely to be presented at the American Epilepsy Society (AES) annual meeting in December.

BE (I’ve seen lots of criticism of GW’s tendency to release incomplete data. But the criticism has mostly come from people known to be short, so I do nothing other than note it.)

Possible expedited regulatory pathway represents upside to base case
valuation. GWPH will meet with the FDA in summer 2016 for a pre-NDA
meeting to discuss the Phase 3 Epidiolex results in Dravet Syndrome and
potentially the pathway forward in LGS. Importantly, if the FDA agrees to allow an NDA submission based on a single Dravet’s trial, this would suggest the
agency is supportive of the existing data, thereby de-risking the entire
Epidiolex development program and potentially expediting the regulatory
pathway, in our view. We currently model NDA submission in 1H17, and
believe an expedited regulatory pathway represents upside to our base case
valuation.

Outcome of this binary event closest to our Scenario 3, with some
remaining residual risk to the second LGS trial. We view the positive data
in this first LGS trial as incremental de-risking for the Epidiolex development
program, although the lack of details around some of the efficacy and safety
findings, as well as the high placebo rate, lead to remaining residual risk in the second LGS trial. We are increasing our probability of success in LGS to 65% from 60%, though we note this is less probability of success than we model for Dravet Syndrome (75%). In our note event we outlined 5 potential outcome scenarios. We believe
the LGS data are most similar to scenario 3 in that Epidiolex produced
statistically significant efficacy, though the delta vs. placebo is less than was seen in the first Dravet study, leaving some remaining residual risk to the second LGS trial. Based on the incremental de-risking from this trial, we are increasing our PT to $152 from $149, remain OW.

BE SO. Fingers crossed.

[joosepi] 28/6/2016 13:19

RNS 12:14 Bank of New York Mellon Cor increase holding by 14688 £81000

[randompoint] 28/6/2016 09:38

Don't think there's any problem sharing price sensitive information. All you have to do is make sure (normally via conf. agreement) that people are formally aware that they are insiders and therefore may not disseminate the information or trade on it. Happens routinely with a whole range of advisors, people who print annual reports etc etc etc.

[ih_406638] 27/6/2016 15:18

Well I am used to GW doing things properly. It seems ill judged to me to court any sort of danger, especially at this time, for the sake of some trivial sound bites

[wengerb] 27/6/2016 15:01

nodding. I think that the doctors quoted are among the principal invesigators running the trials. I imagine that the company says something along the lines. "Assume that the results are going to be fine, would you write us a statement of your support?" If the results are fine then you publish the quotes, if not you bin them.

Or are you seeing another set of class actions looming up to add to the overall gloom?

Come on Iceland!

[masingi] 27/6/2016 14:21

Nodding, I think it's only a problem if the information is acted on ahead of the RNS. My wife works in clinical trials and gets to see all sorts of interesting stuff that we are prohibited from using.