An influential U.S. Food and Drug Administration advisory panel has unanimously recommended approving a cannabis-derived prescription medicine for the first time in the country’s history.
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Epidiolex, a childhood epilepsy drug developed by British company GW Pharmaceuticals (GWPH
GWPH
GW Pharmaceuticals
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+0.53%
), contains cannabidiol (CBD), one of the many chemical compounds found in marijuana plants. However, the treatment, administered in a syrup form, contains less than 0.1 percent of tetrahydrocannabinol (THC), the substance that makes people high.
The 13-member FDA advisory committee voted in favor of approving Epidiolex on Thursday after clinical trials showed that it was effective at reducing seizures and posed minimal risk of triggering side effects, such as potential liver complications.
The FDA is now expected to make its final decision on the matter by June 27. The agency isn’t obligated to follow the recommendation of its experts, but usually does.
Epidiolex is used to treat severe seizures in patients aged 2 years and older caused by rare forms of epilepsy called Dravet Syndrome (DS) and Lennox-Gastaut Syndrome (LGS). In a statement, GW Pharma, the manufacturer of the drug, applauded the decision by the FDA’s advisory panel.
“This favorable outcome marks an important milestone in our company’s unwavering commitment to address the significant unmet need for patients with LGS and Dravet syndrome and our resolve to study Epidiolex under the highest research and manufacturing standards,” Justin Gover, GW’s CEO, said. "We look forward to our ongoing discussions with the FDA as it continues to review the Epidiolex NDA.”
Analysts Bullish
Cantor Fitzgerald analyst Elemer Piros told Reuters that he expects the FDA to approve the drug before June 27, following its advisory panel's upbeat assessment. Cowen & Co analysts are also hopeful that Epidiolex will gain approval and have forecasted sales of $1.3 billion for the treatment by 2022.
Cowen analyst Phil Nadeau added that approval could have big implications for the use of CPD in drugs. “This should aid CBD in being efficiently rescheduled by the Drug Enforcement Administration,” he said on Tuesday. Under U.S. federal law, marijuana is currently considered to have no medicinal value. (See also: What Stocks are on the Marijuana Index?)
GW Pharma’s shares rose 1.61% in after-hours trading to $136.25. The stock previously rose over 10% on Tuesday morning when news of the FDA’s advisory committee's positive findings first began to surface.
The world's first marijuana ETF, Horizons Marijuana Life Sciences Index ETF (HMMJ.U.XTSE), allocates 9.54% of its combined weight to GW Pharma. The company also makes up 6.38% of the overall holdings in the U.S.-listed ETFMG Alternative Harvest ETF (MJ
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ETF Managers
29.29
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). (See also: Why Aren't There More Cannabis ETFs?)
Read more: FDA Close to Approving First Cannabis-Based Drug | Investopedia
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