GW pharma sees price action as Sativex approval finally looms

GW pharma (GWP) moved up around 10% early this afternoon but fell back to close up 5% at 128p. Although volumes were not dramatic on the buy side, this move is presumably linked to imminent Sativex approval in the U.K. and/or market makers adjusting bid/offer levels on a shortage of stock for a larger buyer waiting in the wings i.e. encouraging profit taking by smaller shareholders as their positions increased in value.

GW Pharma moves down as Sativex UK approval awaited

GW Pharma (GWP) has continued its downward move since hitting the 130p mark at the interim results in April. Lack of buying pressure means that it looks like the price is being walked down by a few pence a day to its current 114p by the market makers and further weakness may be evident before final approval and launch of Sativex in the U.K.. The company expects these milestones to be hit by the end of June. After several sales of GWP around the interims and then around a week ago in the £1.20-1.30 range, I continue to hold but with a reduced number on this downward drift. Any large fall back to the £1.00 level will be a buying opportunity and chance to top up. As we saw following the regulatory announcement in March, GW can be volatile and easily trade in a 30p range on no news.

GW Pharma has positive momentum as interim results beckon

Last night, GW pharma (GWP),  confirmed its interim results would be next Thursday (May 20th). It is likely that expectation of updates on the regulatory approval status of Sativex in the Europe has begun to move the stock and it is currently up around 5% to 126p to buy. In addition it is hoped that further news about the U.S. FDA application for cancer pain will be available. At 126p the stock is still below the level it reached in March when the last regulatory update was given and I am hoping that we will see a level much higher than this once Sativex has passed all the hurdles for the registration in Europe. The company were confident that the drug would be approved by end of Q2 i.e. June at the last major announcement.

Steady drop in GW Pharma share price as we await Sativex UK approval

GW Pharma (GWP) dropped today to 112p to buy, around 12% higher than following the announcement of a positive regulatory assessment on the safety, quality, efficacy of Sativex 3 weeks ago. Since approval of the product in multiple sclerosis is more or less assured in May and a UK launch due by end of Q2, the current share price seems to a good opportunity to increase exposure given the fall from close to 130p at the time of the positive clinical trial in cancer pain in early March.  Volume is very light and the share price looks like it is being walked down by the market makers. The question of course is whether the downward trend of 1-2p price falls per day will end. The market cap is only £145 million and a £10 million payment is due from Bayer Schering and £2.5 million from Almirall on licence approval.

GW Pharma falls ahead of AGM

GW Pharmaceuticals (GWP) Annual General Meeting is being held today at 11am. The shares are currently down 4p to 119p to sell after slipping significanly in the final hours of trading yesterday. I have been selling down some of my holding over the last 2 days following the news on Sativex UK/Spain registration and the Phase IIb cancer study,  meaning my position has been reduced by around two-thirds. I am continuing to hold a core position and may look to top up on any weakness but given the interim results are not due until May when further may be forthcoming on the Sativex approval process in Europe, these shares may drift a little unless a major new institution comes on board. A buy back point below 120 p looks enticing.

GW Pharma announces positive clinical trial data in cancer pain

GW Pharma (GWP) announced today preliminary results of a Phase IIb dose-ranging trial evaluating the efficacy and safety of Sativex in the treatment of pain in patients with advanced cancer, who experience inadequate pain control during optimized chronic opioid therapy. 

This trial was performed in conjunction with GW's licensing partner for Sativex in the United States, Otsuka Pharmaceutical Co. Ltd..  In the US, cancer pain represents the initial target indication for Sativex. Key Points: - Study meets key objectives of providing data to support entry into Phase III - Sativex shows statistically significant differences from placebo in pain scores, according to both the continuous response analysis and change from baseline analysis in NRS average pain - GW and Otsuka now planning End of Phase II meeting with the FDA to gain endorsement of the proposed Phase III program 

GW Pharma continues upward momentum

GW Pharma (GWP) is currently up nearly 6% without any evidence that big buys are coming through for the company.  Momentum is certainly positive with the regulatory announcement last week on the progress of the European Sativex application. A  move over 130p seems feasible during the week and closer to 150p on final approval in May. Of course, an institutional buy of any size would accelerate matters as trading seems to be focused on private investors for now. Perhaps those boys in the City just fall asleep when it comes to decentralised applications, mutual recognitions and the like?!

What next for Sativex cannabis spray?

Following today's RNS and WebCast relating to GW Pharma's cannabis spray, Sativex, the following steps are anticipated. The drug has now reached day 150 of the decentralised regulatory process (DCP) without any major issues, the only outstanding minor point is the Patient Leaflet:

1. Completion of regulatory documentation for decentralised application (patient information leaflet) with UK as RMS (Reference Member State) and Spain as CMS (Concerned Member State) - April 2010?

2. Closure of decentralised phase April-May 2010?

3. Grant of national licences in UK and Spain (following agreement on local labelling and packaging)- 30 days is standard approval - June 2010
4. Launch in UK - June 2010 (Q2 - company state high confidence of Q2 launch)
5. Start of Spanish reimbursement discussions - June 2010
6. Launch in Spain - September 2010 ( 3 months consultation on pricing)

7. Start of mutual recognition process in other European markets with UK as Reference Member state - July 2010?

8. Grant of mutual recognition in other major European markets (6 month approval normal) - Q1 2011 (possibly end 2010)

In parallel reimbursement discussions will be going on. The company will have submitted a price to the UK's Department of Health and unless there have been significant disagreement, Sativex will be reimbursable on the NHS from product launch. NICE (the National Institure of Clinical Excellence) may assess the drug later and boost uptake with the PCT's (Primary Care Trusts) in England and Wales, since budget holders will have guidance on usage.  In the meantime prescribers may use the drug as they wish and it will be paid by the NHS. In Scotland, the SMC (Scottish Medicines Consortium) needs to pre-approve drugs before launch, but the company should have this well in hand. In Spain, GW's partner Almirall will in discussions with the Spanish Ministry of Health after licence approval, and this is usually a 3 month process. U.K. approval will bring in £10 m from Bayer Schering , and in Spain Almirall will pay £2.5 m on pricing and regulatory approval.

Questions and answers from today's WebCast:

Q. What indication has been approved?

A. Symptomatic improvement  in symptoms of MS who have failed on other anti spasticity medications. 

Q. What territories are planned for Mutual Recognition?

A. GW and Almirall are putting together a list. Major commercial markets included. NICE preparation in hands of Bayer Schering, Market access team who have significant expertise.

Q. Any plans to expand label?

A. No, comfortable with indication.

Q. Is cancer pain trial on track for Spring. 

A. Yes

Q. What are launch logistics?

A. Sufficient launch stock. Manufacturing licence issued in 2009. Launch batches delivered into distribution chain on approval announcement.

Q. Is there capacity to cater for global demand?

A. Yes, capacity will be ramped up using 3rd parties.

Q. What are licensing plans outside Canada, UK, Europe and U.S..

A. Ambition to use the European approval as basis for filing in other parts of world. Distribution partners being discussed e.g. Australia,  Latin America, Africa.Update on rest of world at Interims in May.

Q. What is situation on Spain pricing?

A. Spanish Ministry of Health and Almirall will be in negotiations. Expect 3 months, maybe more.

Q. When are milestone payments due?

A. Milestone payments on reg. and pricing approval in Spain. Licence approval UK

Q. When is Canadian spasticity indication due?

A. Canadian reg. submission for spasticity filed end 2009. H2 2010 outcome. 

Q. Have you considered issue of pricing differentials in different countires?

A. Partners make decision on price. UK will be public domain once Almirall start price discussions. 

GW PHARMA FINALLY STARTS MOVE UP ON POTENTIAL SATIVEX NEWS

GW pharma (GWP), developer of the Sativex cannabis spray for pain and spasticity in multiple sclerosis, has finally started moving up. After a 6% rise yesterday, the stock rose 5% today.  Rumours are rife that approval for Sativex by the European regulatory body is close. Contrarian Investor UK, awaits tomorrow with interest as GWP is the portfolio's largest holding and is now showing a healthy profit. But I have no intention of selling before approval when I expect a 35%+ share price rise.

GW pharma partner Almirall hints at Sativex approval timing of Q1 2010

From pipelinereview.com (February 25th 2010):


Following publication of Spanish company Almirall's 2009 results today:


"The regulatory filing of Sativex® for the treatment of spasticity due to multiple sclerosis was submitted in UK and Spain under the European decentralised procedure, following the announcement of positive results in a phase III study where Sativex® showed relevant improvement in spasticity in multiple sclerosis patients. It is expected that the outcome of the regulatory submission will be known during the first quarter of 2010. Following potential approval in the UK and Spain, submissions for approval would be made in other European countries during 2010 under the mutual recognition procedure. Development of Sativex® for oncological pain in ongoing with results from an ongoing phase II/III study expected mid 2010."


"Silodosin (a licensed product from Recordati for use in the treatment of benign prostatic hyperplasia) was recently approved by the European Comission and we expect the regulatory outcome from Sativex® (used in the treatment of spasticity in multiple sclerosis) during this first quarter of 2010. Pending pricing and reimbursement processes, both products could generate sales in 2010, and could contribute to sustain the base business in the years to come."


"Free Cash Flow has reached € 206,4 mill despite the acquisition of linaclotide European rights (US$ 40 Mill downpayment + US$15 Mill of equity following positive phase III CC data) and milestone payments to GW Pharma (GBP 8 Mill) after the positive Phase III and continued regulatory progress of Sativex®"

Portfolio Update - February 21st 2010

The market’s had a good week, with most of the major indices up 3% or so. Sentiment seems to have turned positive over the last 2 weeks after the negativity early in February. One of Contrarian Investor UK’s principles to maintain adequate diversification is being broken this week as my portfolio is too heavily weighted towards GW Pharma and the Falkland Islands Oil companies.  But the “binary bet” on the success of GW’s Sativex cannabis spray for Multiple Sclerosis is far too tempting a target. The previous application for the drug was rejected because of inadequate clinical trial data. This was addressed with an additional phase III clinical and the new application made for a European licence in the summer of 2009 looks very strong.  I have used Contract’s For Difference (CFDs) to limit the downside risk to 20% or so, but approval should move GW Pharma up at least 50-60%. As for the Falklands Oil drillers, all the hype and TV/press coverage is just too tempting to exploit and again the upward move on these shares will be so significant that a guaranteed stop loss using a CFD seems a sensible trade, albeit a gamble. “Fortune favours the brave”.

Coal of Africa (CZA) – Significant upward move in this share price this week on no news from 130p range to a high of 153p. Positions closed despite long term conviction in this stock, especially as Vele mine approval was finally given this month.  This strategy appeared to have paid off on Friday with CZA falling as much as 5% at one point. I will watch for a potential re-entry point if the positive market sentiment turns for the worse.

GW Pharma (GWP) – Still no news on the Sativex European approval but given the timings of the Decentralised approval process (DCP) for drugs in Europe it would be expected that news is not far off.  Have increased position once again at 87p.

Falklands Islands Oil (Falkland Oil and Gas –FOGL, Desire Petroleum – DES, Borders and Southern Petroleum BOR) – Its been an exciting week for the Falklands Oil stocks as Argentina issued a decree that any vessel passing through its waters would need a permit to visit the Falklands which made investors somewhat nervous. On Friday, the Ocean Guardian Rig, contracted by Desire Petroleum arrived on the Liz field in the North Falklands basin and is due to spud this afternoon. I took the opportunity to top up my holding in Desire Petroleum despite some reservations about my significant exposure to the Falklands Oil sector. The risks are significant but the geology of the Falklands basin and oil finds in the previous drilling campaign by Shell/Lasmo gives more than hope that oil will be found in economic quantities. If the Ocean Guardian Rig does strike it rich then I would expectd Desire’s share price to be closer to £20 than 1 so the risk/reward ratio still looks enticing despite the strong run up in the Falkland Island Oil shares. Falkland Oil and Gas and Borders and Southern Petroleum have been relatively benign for a couple of weeks now, so a rise in these Southern Basin stocks would be expected on any news from the Northern Basin drilling campaign.
Nighthawk Energy (HAWK) - Nice move back up from 27p to just over 30p as the company announced the appointment of a new non-exec. director. News on Jolly Ranch should be imminent and therefore I am hopeful of a solid move towards 40p in the next week.

ITV (ITV) – A move up from below 50p to 53p as news on potential government approval of Product Placement on UK TV came through. Position still in deficit but given TV market revenue rebound in both January and February, outlook looks positive.

Amgen (AMGN) – News was received this week that an opinion on the FDA application for Prolia (denosumab) would be received by end July. I have trimmed by position a little this week because of a shift in the portfolio to GWP and the Falkland’s shares but will look to top up in the next few weeks.

Intel (INTC) - Position closed at $21.7, following a good rise in the semiconductor stocks this week. I like Intel long term but it trades within a range of $19-$22 so a move to the upper end triggered a sale.

Micron (MU) – The worst performing stock in the portfolio but Micron continues to rebound from its lows close to $8 to finish Friday at $8.9. Holding

GW PHARMA (GWP) - Lead drug approval close to fruition

ABOUT GW PHARMACEUTICALS

GW Pharmaceuticals (GWP) was founded in 1998 and listed on AIM, a market of the London Stock Exchange, in June 2001. The Group's lead programme is the development of a product portfolio of cannabinoid prescription medicines, including Sativex® Spray. In 1999 GWP commenced its first clinical trials evaluating different cannabinoid formulations as potential treatments in the fields of Multiple Sclerosis and pain. GW focused on the development of Sativex, an oromucosal spray with two principal cannabinoid components, Cannabidiol (CBD) and Delta-9 Tetrahydrocannabinol (THC). Since 1999, the safety and efficacy of Sativex has been studied in over 20 randomised placebo-controlled trials in over 3,000 patients. In 2003, GW entered into its first pharmaceutical licence agreement with Bayer Healthcare AG for the UK marketing rights to Sativex. This agreement was expanded to include Canada later that year. In 2005, GW and Almirall signed a licence agreement granting Almirall exclusive marketing rights to Sativex in Europe (ex-UK). In 2007, GW granted Otsuka the US development and marketing rights to the product.

Sativex was first approved in Canada in 2005 under Health Canada’s Notice of Compliance with conditions (NOC/c) policy for the treatment of neuropathic pain in MS. This approval was extended to cancer pain in 2007. In May 2009, a licence submission was made for Sativex in the UK and Spain for the treatment of MS spasticity. In the United States, the FDA granted a Phase III IND (permission to enter Phase III trials) for Sativex in 2006. A US-focused Phase IIb/III trial in cancer pain is currently ongoing.

SATIVEX APPROVAL IN EUROPE

GW Pharma submitted the European regulatory submission for Sativex for the treatment of spasticity due to Multiple Sclerosis on 20th May 2009. The UK regulatory authority (MHRA) in effect sponsored the application as RMS (Reference Member State). The application is being progressed through the DCP (Decentralised Procedure) which allows simultaneous approval in all EU member states once the paperwork for a MRP (Mutual Recognition Procedure) has been fully approved.

The DCP procedure timings are as follows: "The applicant requests one country to be the Reference Member State (RMS) in the procedure. After 70 days the RMS circulates the first Draft assessment report. The Concerned Member States (CMS) and the applicant can then make their comments. On the 120th day of the assessment procedure, the RMS circulates another Draft assessment report, including comments on the SPC, package leaflet and labelling texts. There is also a Mutual Recognition Procedure during the next 90 days, in which other Member States generally adopt the RMS's assessment, unless they have important objections on the grounds of a potentially serious risk to public health. In such situations, further discussions will also be held in the Coordination group for Mutual recognition and Decentralised procedures (CMD(h)). Once a positive opinion on products has been taken in the Mutual recognition and Decentralised procedure, translations of the SPC, package leaflet and labelling texts are submitted and a national marketing authorisation is issued"

So 210 days from 20th May is 16th December 2009. Approval will be pushed back as the company receives questions (which stops the regulatory clock) and sends in responses. Given the strong phase III clinical trial data, it certainly looks likely that Sativex approval will be granted by March 2010 in the U.K. and Spain and in the rest of Europe by the second half of 2010.

INVESTMENT CASE

Buy initiated at 84.5p. A likely positive outcome for Sativex approval within a 3 month time frame  backed up by a good package of large scale clinical studies plus the backing of 3rd party players such as Bayer makes GW pharma a long play.