British biotech GW Pharmaceuticals (NASDAQ:GWPH) Tuesday reported positive safety and efficacy data from physicians treating epileptics with its Cannabis derived drug Epidiolex, sending the stock up 16% to 89.82 on the stock market today. But shares gave up some of those gains late on a new stock offering plan.
In the efficacy group comprising 27 patients, those taking the drug showed a 44% median overall reduction in seizure frequency over 12 weeks, with 22% showing a 90% reduction and 15% having no seizures at all. In the safety group comprising 62 patients, at least one adverse event was reported in 81% of them, but 80% of those events were mild to moderate.
Leerink analyst Joseph Schwartz noted that this study was not placebo-controlled so should be interpreted with caution, but added that placebo response rates in severe forms of epilepsy have historically been low. GW will launch a more rigorous clinical trial of Epidiolex later this year.
Schwartz reiterated his outperform rating and raised his price target to 110 from 90.
Epidiolex is a cannabinoid, derived from the active ingredient in marijuana, as is the rest of GW’s pipeline. Its cannabinoid Sativex, for multiple sclerosis, is already on the market in Europe and North America.
This also probably explains why Insys Therapeutics ‘ (NASDAQ:INSY) stock jumped 12% Tuesday. Insys is developing cannibinoids for various purposes, including epilepsy.
GW and Insys went public on the same day — May 1, 2013 — priced similarly at 8 and 8.90, respectively, and both have gained dramatically since then. Insys hit a high of 57.92 on March 4, but since then has been accused of shady sales practices, which dampened the stock. Tuesday it closed at 29.70.
GW Phamra said after the market close that it would sell 1.7 million ADS. The stock fell 3% in after-hours trading.