Gw Pharmaceuticals Share Discussion Threads

[ih_406638] 04/10/2016 10:22

Cheers Random. The benign safety profile is going to help clinicians to prescribe off label IMO. Interestingly, the MS text above actually has a probability of success for off label use.

My old post 7806 might be worth a look

[randompoint] 03/10/2016 18:15

Nodding, in the Morgan Stanley event recording I think I heard someone, maybe Gangolli, saying that some doctors thought in terms of treating the seizure type rather than the underlying indication. GW are careful to note that they will market Epidiolex in accordance with what its approved for. But, given its supposedly benign safety profile, the expectation is for significant off label use. In the context of that conversation, it was noted (I think) the Lennox Gastaut compassionate use or trial had featured several adult patients. So, it's not ruled out I think.

[ih_406638] 03/10/2016 17:37

The trouble with silence is that it can mean there is nothing to confirm, or nothing worth denying. I am pretty much committed to holding into 2017 so I shall just have to put up with the noise around the silence.

In the MS text above it mentions "a broad label", which sounds like something half way to off-label, but I suppose it is not that. Does it mean perhaps that all refractory pediactric epilepsies are included, or better, any refractory epilepsy? A chunk of the adult market would be a serious matter.

[randompoint] 03/10/2016 17:13

Nodding,

The amount of chat between indicative offer, working out what's most important to each party, and actually getting to an agreed definitive offer is pretty variable. It may or may not even involve one party going a bit slowly in order to see how much of a hurry everyone else is in.

If you're close to an agreement but aren't quite there, the buyer might think it through a bit more and come back. So, you don't want to say "talks are over". Nor do you want to get people excited by saying that talks, which might not amount to anything, are "ongoing".

So - if my picture is at all accurate - I think silence is a natural consequence. Even if it can be a bit annoying.

[ih_406638] 03/10/2016 15:40

Cheers Random. I would agree with you but I would also say that I think big pharma is run by businessmen and they are probably looking beyond epilepsy to wider market possibilities. GW would represent an excellent starting platform - in fact the only credible platform at the moment.

Maybe the takeover talk was on hold pending the LGS result and right now they are wrangling over the secondary endpoints data and what it means in terms of future value. I find the company silence to be a bit annoying.

[randompoint] 03/10/2016 13:17

Having carefully waited (unbraced) until after 1 pm, I thought I'd share a few thoughts on the merits of a takeover.

My position is generally that I would like GW to take Epidiolex to full commercialisation, see sales targets exceeded (including via off-label use), and watch the share price go up as the application is made, approval is granted, sales are made, and targets are beaten. That always seemed attractive to me (putting me in much the same kind of boat as Wenger).

But, there is a case to be made for selling out.

If I were a big Pharma company feeling the need to buy GW, this is what I would say. As an independent company, you plan to hire 50-60 specialist sales people and launch this drug. No doubt you will make a great success of that. But, we can offer you something more attractive. Together, we can make this the biggest launch for a decade and entirely change the face of epilepsy treatment.

On top of that, think of the other objectives you have: if your glioma results are good, much of your shareholder base will want you to outlicence that and focus on the pediatric niche. You've shown the ability to raise large sums of money. But, future raises (at least in the medium term) will have to be carefully reconciled with a narrowish strategy that's right for a niche player. With us, if we want to go at Glioma, we can simply go at it, and go at it hard. Where's the phase III follow up for the schizophrenia / anti-psychotic use? Together, we'll be all over it. Given up on cancer pain? We'll mix sativex with opioids and trial them administered together - whatever it takes - we have the muscle and appetite to give it a go. Etc etc.

As for your independence, well, you'd keep a lot of that. The issues around cannabinoids are such that it would make no sense for us to assimilate your operations or your network of experts into what we do. We'd help with the sales function and with money, but beyond that your organisation would be largely unchanged and you'd be very much in charge. We'd probably even keep the brand.

In summary, what we're offering is access to much more funding, access to a huge pre-existing sales organisation, more toys to play with and the chance to make a much bigger impact on your patient population(s). And, because this rationale so compelling, we can pay a fat takeover premium to your shareholders, in fact such a big premium that together with your advisors, you must conclude it's more value that you can reasonably expect to deliver alone.

This kind of argument takes some time to develop. It takes some time to explore the assurances that GW would want about the shared plans for the company. But, days rather than months and there's no reason why it can't be as compelling and as attractive as the idea of doing it all yourself.

Best

RP

[wengerb] 03/10/2016 11:42

3rd eye. Thanks for the Morgan Stanley analysis. Their price assumption of a net $32,000 per patient per year is some way ahead of the figures I've ever used and my guess was based on a conservative interpretation of someone at GWP once telling me to think about "low tens of thousands" but that steer was given to me at an early stage in the expanded access programme, long before any of the impressive pIII data.

[ih_406638] 03/10/2016 11:26

Thanks 3rd eye. A giant bull is exactly what you want to handle buyout suitors!

[3rd eye] 03/10/2016 10:32

As a reminder, GW Pharma maintains a
September fiscal year end. With these changes, our GWPH PT increases to $160
per share.

[3rd eye] 03/10/2016 10:31

Further to mels excellent research on GWP these last few days I got in touch with my broker and asked if they had a broker note on last weeks trial results, they said indeed we have and its a cracker............they say Morgan Stanley are a Giant Bull on the stock.

Morgan Stanley

Second LGS trial succeeds, with Epidiolex showing similar efficacy to the first
LGS trial. Yesterday, GW Pharma reported results from the second Phase 3
study of Epidiolex in Lennox-Gastaut Syndrome (LGS). The patients enrolled in
the trial had highly refractory disease, taking an average of three anti-epileptic
drugs (AEDs) concurrently, and having failed 7 previously. These patients had a
baseline seizure frequency of 85/month. During the treatment period, patients
taking Epidiolex 20mg/kg per day (n=76) on top of their current therapy achieved
a median reduction in monthly drop seizures of 42% compared with a reduction
of 17% in patients taking placebo (n=76), resulting in a 25% statistically significant
treatment effect (p=0.0047). Patients taking Epidiolex 10mg/kg per day (n=73)
achieved a median reduction in monthly drop seizures of 37% compared with a
reduction of 17% in patients taking placebo, a statistically significant treatment
effect of 20% (p=0.0016). As a reminder, Epidiolex demonstrated a reduction in
drop seizures of 44% vs. 22% for placebo in the first Phase 3 LGS study reported
in June.

Safety for Epidiolex appears consistent with prior trials and the ongoing
expanded access program. AEs were recorded in 84% of patients treated at
10mg/kg (89% of which were mild/moderate), 94% of patients in the 20mg/kg
group (88% mild/moderate), and 72% of placebo patients. The most common
(greater than 10%) AEs across dose groups included somnolence, decreased appetite,
diarrhea, and upper respiratory tract infection. Additionally, in the 20mg/kg
group there were common reports of pyrexia, vomiting and nasopharyngitis. One
potential concern is the status epilepticus experienced by at least 10% of
patients in the 10mg/kg group. Although no cases of status epilepticus were
deemed treatment related, we continue to monitor these developments. SAEs
were found in 13 patients in the 10mg/kg group (2 treatment related), 13 patients
in the 20mg/kg group (5 treatment related) and 8 patients receiving placebo.
There was one discontinuation due to AEs in the 10mg/kg group, 6 in the
20mg/kg group and one in placebo. No deaths occurred during the study, and
99% of completers opted into an open label extension trial.

Updating our model to reflect incremental de-risking; increasing our probability
of success for Epidiolex to 85% in Dravet and LGS, and our PT to $160. Given
the positive data from the second Phase 3 study in LGS, we have increased our
probability of success (POS) for Epidiolex in both LGS and Dravet Syndrome to
85%, increased our POS in tuberous sclerosis complex (TSC) to 65% from 60%,
and increased our POS for off-label indications to 75%. We have also updated
our launch timing estimate based on the company’s plan to submit an NDA for
both indications in 1H17, assuming the maximum 90 days for DEA scheduling, and
now model Epidiolex launch in FY2018. As a reminder, GW Pharma maintains a
September fiscal year end. With these changes, our GWPH PT increases to $160
per share.

As focus shifts to commercialization, we continue to believe our launch
assumptions for Epidiolex are achievable, based on demand for Onfi, increased
pricing power, and high physician/patient awareness. Based on the results of
external consultations and our June 2015 AlphaWise survey of US and EU
pediatric neurologists (see our initiation note here), we believe that awareness of
Epidiolex is extremely high among both physicians and patients, bolstered by the
company’s ongoing expanded access program, which as of Aug 1 included
approximately 500 patients across 32 U.S. clinical sites. We expect awareness
and demand for Epidiolex to exceed that of Lundbeck’s Onfi, a benzodiazepine
with relatively little awareness outside of the medical community and a label
only for LGS. An analysis of IMS Health demand data for Onfi suggests our
forecast for Epidiolex may be conservative, showing a current run rate of
approximately ~35k script per month for Onfi vs. our launch model showing
~30k patients receiving Epidiolex near the same launch timepoint (see Exhibit 2
and Exhibit 3 below). We also anticipate that many of the patients enrolled in the
EAP will convert to paid scripts, fueling the early launch. Lastly, we also expect
Epidiolex to command premium pricing vs. Onfi, modeling net pricing of ~$32k per
year at launch vs. implied Onfi net pricing of ~$10k today in the U.S. Importantly,
Epidiolex is likely to receive a broad label for refractory patients, opening the
door for usage prior to Onfi, as an alternative to Onfi, or in conjunction
with/after Onfi. For these reasons, we believe Epidiolex is well-positioned for
commercial success.

While the bear thesis has been largely disproven, GWPH could see volatility
into the formal data presentation. We note that the bear thesis for GWPH has
historically focused around questions regarding the efficacy and safety profile of
Epidiolex, and whether the drug has a treatment effect on seizure frequency
either alone or in combination with other AEDs. With the successful read-out of
the third placebo-controlled Phase 3 trial, we believe a significant part of the
bear thesis has been disproven, as Epidiolex has consistently shown a statistically
significant, clinically meaningful reduction in seizure frequency in highly
refractory populations. However, with very little topline data provided for key
secondary endpoints like the responder analysis, we note there may be some
volatility into the full dataset presentation expected at AES in December. At this
meeting we will also focus on the distribution of responses, the percentage of
patients worsening, the status epilepticus rate, the full safety profile and the
rate of responders in non-Onfi patients. Importantly, we think efficacy, rates of
response and safety/tolerability in the real world are likely to exceed that seen in
the trials, as clinicians are likely to dose titrate patients individually.

[future financier] 03/10/2016 08:10

As always on this board (surely the best on advfn!) some fascinating insights. Thanks to those who have the time and abilities to provide them and keep us all so well informed.

[wengerb] 03/10/2016 07:02

RP. I think it would be odd if the company became the dog that didn't bark but you may well be right. Maybe nothing will be said about GWP/Morgan Stanley's talks with the "many" potential suitors.

My preference would be for GWP to continue as an independent company. I didn't intend to express my wish for a takeover, simply that a possible divergence exists.

[randompoint] 02/10/2016 22:28

Wenger, thanks as usual for your posts.

I disagree this time. I'd be surprised if there was an announcement saying no deal at present. Why do that? Unsuccessful approaches are often left open for another day, and (unless forced) it's generally a mistake to take any step that might set a precedent for having to give a running commentary in the future.

My guess is that it's exciting for the company to start actually selling, the off label potential makes the gamble more attractive, and therefore thats the path for now.

So I'm unbraced (but open minded).

RP

[cfb2] 01/10/2016 22:14

"...minutes of desk research". Heady stuff.

There might be a better reason for Pfizer to buy GW. About 6 months ago they tried to acquire Allegan but it was vetoed because it looked like it was being done for tax reasons. GW would look strategic and be tax efficient. But watch out, AstraZeneca has just laid off a load of staff in what looks like a move to attract suitors.

[wengerb] 01/10/2016 18:21

Ladywormer. I meant that it was a remote chance my guessing correctly that Pfizer specifically was a suitor. I used Pfizer as an example of a big pharma that might be interested in acquiring GWP.

I would never directly suggest that anyone should buy or sell any particular asset. If there's a bid for GWP recommended by the board then we'll all hang on for the payout. If it we get to know that there is no such recommended offer then I'd expect the price to fall sharply but I'll sit tight until the price recovers.

[altom] 01/10/2016 14:45

I don't dare to sell any GWP just in case some sensational RNS does pop unexpectedly.

[ladywormer] 01/10/2016 11:34

Wenger - a very interesting post. Did you mean your chances of being right are pretty remote, ie sell?

[wengerb] 01/10/2016 11:08

My advice? Adopt the brace position.

Next week it'll be nearly a month since the story about "many" potential partners looking at GWP and the appointment of Morgan Stanley as advisor to GWP.

As I've said, had there been no truth in the story then GWP would simply have had to issue a polite denial. Not to have done so would have been poor corporate governance and GWP prides itself on good governance. I think that talks are taking place.

Then Stephen Wright sold a large line of shares so there couldn't have been a takeover issue as why would he sell knowing a higher price might be in prospect? But he sold before the pIII data and, if anyone had an inkling of the likely success of those trials, it would have been Stephen. So I feel we can rule out the Stephen Wright share sale factor.

In my working life I had a few brushes with with M&A and I found that any approaches that had no hope were rejected almost immediately. GWP and Morgan Stanley have had nearly a month to explore what the Morgan Stanley analyst referred to as "strategic optionalities".

I think we'll soon see an announcement that will either say that a deal is on or that there's no deal at present. The share price will then leap up or fall substantially. As a long-term holder of GWP shares the latter won't worry me too much as I expect the share price to considerably exceed current levels when the FDA approves Epidiolex next year.

Lazy journalists have as yet guessed that the "many" potentially interested parties lay within those pharma that already have a relationship with GWP; Bayer, Otsuka, Almirall, Novartis etc. I don't know about Novartis but the other three seem most unlikely as they've all had their fingers burned by the disappointing performance of Sativex.

Based on minutes of desk research, I have a contender and it's Pfizer.

GWP has aimed itself at CNS diseases. Pfizer has the world's biggest CNS franchise with sales in 2014 of $8.1 billion.

Epidiolex potentially threatens the current roster of antiepileptic drugs. Pfizer has the world's biggest selling epilepsy drug, Lyrica, with sales of $5.1 billion (although Lyrica is also prescribed for other conditions).

Pfizer has run a phase I trial on Lyrica for refractory epilepsy in children.

Lyrica has a list of side effects as long as your arm.

Pfizer has recently decided not to make the strategic decison of splitting the company in two but, according to a leading analyst, Dr. Tim Anderson "the most likely path forward involves hunting for more acquisition targets".

In August, Pfizer announced it was paying $14 billion to buy Medivation. It's buying a portfolio of experimental antibiotics and anti-fungal pills from AstraZeneca. In June, Pfizer bought Anacor Pharmaceuticals Inc. for $5.2 billion.

The chances of my being right about Pfizer are pretty remote.

Why adopt the brace position? Because GWP's favourite day for releasing big news is Monday.

[randompoint] 29/9/2016 13:07

Thanks neilrr

[neilrr] 27/9/2016 12:11

At the bottom, last share discussed today.

[nodding] 27/9/2016 09:45

"Granularity" as in sugar also works

[doc robinson] 26/9/2016 22:17

Finished on a high in USA up 17per cent strong all day bodes well for the next few days and a potential bid

[wengerb] 26/9/2016 22:13

Thanks to nodding and CFB2. There's word with to me a new usage. It's "granularity" and analysts use it as a smarter way of expressing "detail"

I think we'll see more granularity on secondary endpoints at the AES meeting in early December. Also GWP is organising an investor event in NY for the 5th December.

On the dog that hasn't yet barked, if there are to be offers for the company I would expect them to follow from today's news. Given what the Morgan Stanley analyst described as "the perception of strategic optionality" surrounding GWPH, I expect some granularity on the optionality pretty tout de suite.

[nodding] 26/9/2016 21:35

In the webcast they said no more info would be released re the trial beyond what was in today's announcement