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GWP flotation raises 25m for cannabis drug research
Scotsman, The
Friday 22 Jun 2001 GWP flotation raises £25m for cannabis drug research Andrew Turpin Deputy City Editor GW PHARMACEUTICALS, the world’s only licenced producer of cannabis for production of medicines, yesterday raised £25 million in a stock market flotation, £9 million more than expected. The flotation on the Alternative Investment Market values the business, formed only in 1998, at £175 million and the 27 per cent stake held by founder and executive chairman Dr Geoffrey Guy at £47 million. The Salisbury-based group has placed 14.3 per cent of its equity with institutions, up from the 10.5 per cent originally planned, after the offer was six times oversubscribed. This is raising a net £23.5 million after costs, which will be used to help fund the expansion of clinical trials for its growing portfolio of medicines. It will also pay for an increase in production of cannabis, up from 15 tonnes annually at present to 100 tonnes. Justin Gover, the managing director, said production of the cannabis plants was carried out in rented greenhouses at secret locations in southern England. GW said it was currently in crucial phase three trials of its cannabis-based treatment for multiple sclerosis, and the drug was due to be submitted for approval by regulators in 2003. The drug eases the primary symptoms of the disease, including pain from nerve damage, rather than cures it. The drug is taken using a spray under the tongue. Around 2.5 million people suffer from MS worldwide, of whom around four per cent in the UK at least are believed to use cannabis illegally. Use of the drug became illegal in the UK in 1925. Other applications which GW is currently actively researching include cancer pain and rheumatoid arthritis. The group believes its medicines could go on sale in Britain early in 2004. The expansion will eventually mean a doubling of staff numbers from 60 to around 120. Trading in the shares, which were priced at 182p per share, start on AIM on 28 June. Around 47 per cent of the shares are held by directors, with Gover holding about four per cent. The rest is held by roughly 140 individuals who have helped fund the company.
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