Could GW Pharmaceuticals Go On The Block?
3 min

Could GW Pharmaceuticals Go On The Block?

3 min
Legislation News

GW Pharmaceuticals, a British-based pharmaceutical company has retained an investment banking partner amidst rumors of acquisition offers.

GW Pharmaceuticals Plc (GWP.L), the British-based pharmaceutical maker best known for its development of cannabinoid-based medicines has begun working with investment bank Morgan Stanley. According to news reports, the company has been approached by other drug makers expressing interest in acquisition, although according to company spokespeople, GW is not currently for sale. However the move comes at a very interesting time globally. Medical use is clearly on the table in more and more U.S. states, Canada is likely to approve recreational next year, with a registered patient population that is increasing as much as 10% a month, Australia and Croatia have moved into the medical column and Germany is slated to not only reschedule the drug, but cover it under health insurance as of early 2017.



Medical cannabis

Cannabis-based drugs are clearly on the radar screen of the high and mighty, as much as legalization of even medical use still remains a political football in much of the world, particularly the U.S. and many European countries.

That said, whether the medical cannabis market will be defined in the shape of a pill or the natural source is still a question that hangs in the air like day-old bong smoke.


GW pharmaceuticals

Headquartered in Cambridge England and founded in 1998, the company initially came to international attention with its introduction of Sativex, the first cannabinoid-based spray marketed to those suffering from multiple sclerosis, and actually based on THC found in the plant (as opposed to a synthetic concoction). Its chief rival was Dronabinol, a pill containing synthetic THC and marketed throughout the U.S. and Europe for decades, primarily for the treatment of AIDS. In the last decade, however, as more and more research began to appear about the efficacy of cannabinoids on a range of conditions, starting with chronic pain and movement disorders, it was clear that the synthetics were just not up to the task. Users complained of not being able to regulate their dosages (as they can with smoking or vaping). Plus of course the obvious question, why create in a lab what can be grown far more cheaply and easily?

However, after Sativex was introduced to the market in 2010, the same year that Dronabinol was rescheduled to a Schedule III drug in the United States, it performed poorly – and for several reasons. The first was that while marketed in 20 countries, the drug was never approved by the FDA, making it very expensive (because it is not covered under health insurance) particularly in competition with Dronabinol. The other problem, of course, in the United States at least, was that it began competing with “the real thing” as the winds of legalization swept the nation.

That said, Epidolex, the company’s cannabinoid epilepsy drug, is now in late-stage trials in the U.S. and could receive Food and Drug Administration approval as soon as next year. The drug also performed well in Canadian trials in treating children with Dravet’s syndrome – a severe form of childhood epilepsy. The news of the successful trial in Canada more than doubled the value of GW. Some estimates place Epidolex sales at north of $800 million a year.


The success of GW Pharmaceuticals has come at an interesting time. Everyone from Israeli biotech start-ups to Canadian growers and what little bio development is actually proceeding elsewhere, is starting to not only wake up to cannabinoid-based medications, but starting to get in on the game. There is a lot of money beginning to change hands on just about every continent where legalization is being considered right now – certainly on the medical front. The question remains, however, whether pharmaceutical solutions will ever be as effective (or as preferred) by the majority of users for medical use. Further, although nobody in official positions will admit it, the raw plant is cheaper to administer, not to mention produce. Private health insurance might cover pharmaceutical solutions. It is not clear however, whether public health insurance premiums will be raised to cover the more expensive engineered, manufactured cannabinoids now hitting the market, or whether poorer patients will actually, by default, end up getting the raw plant (and ironically, better product).




On top of that bottom line there is the issue of user preference. And patients overwhelmingly agree. Inhaled or vaped bud or oils are the easiest way to administer and control dosage for adults. And it is bio-engineered and carefully bred plants, not the medicine that is produced from them, which is the driver of medicinal impact. Epidolex, no matter how calculated in GW’s bottom line, is already competing against a form of natural marijuana bred in the United States (a low THC variety) nicknamed Charlotte’s Web, easily manufactured into oils, and given to children with Dravets. What makes GW’s Epidolex so much more enticing?


The fact of the matter is, it is a race to the finish line right now for drug makers vs. growers. If a drug like Epidolex is approved at the federal level in the U.S. and in the EU, it means that those who breed specialized strains but are not registered pharmas will be a distinct market disadvantage as regulations change across the world to allow medical use.

It is not likely that GW or any other pharma company can corner the market on any type of cannabinoid drug, even for specific disease or symptomatic treatment. What the large pharmas clearly are trying to do, however, is grab as much early market share, as quickly as possible now, in some cases just months upstream of medical legalization country by country. Or, in the case of Croatia, jump into the market simultaneously as legalization occurs (as Tilray accomplished this summer).

The market for newcomers and upstarts, in other words, not to mention specially bred strains is still a blue ocean, but the big white sharks are clearly moving in for the low hanging fruit.


Fast Eddy


  Guest Writer  

Written by: Guest Writer
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