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UK: New cannabis drug delay hits GW Pharma
Mark Potter Reuters
Friday 30 Apr 2004 LONDON (Reuters) - GW Pharmaceuticals' hopes of wining regulatory approval for a pioneering cannabis-based medicine have been hit by a fresh delay, the biotechnology firm says. GW , which grows more than 40,000 marijuana plants a year at a secret location in the English countryside, said on Friday it did not now expect regulators to approve Sativex for pain relief in multiple sclerosis patients until after the end of June. GW had originally hoped Sativex, which is partnered with Germany's Bayer, would be approved last year, but said in January the process would be delayed until the second quarter because of a flood of drug submissions in Britain. GW shares fell as much as 22 percent to a 16-month low of 139-1/2 pence as some analysts expressed concern that Sativex might not be approved at all. "The longer we wait for a regulatory decision, the less certain we become of the positive outcome," Karl Keegan, an industry analyst at Canaccord Capital wrote in a research note, retaining a "sell" investment rating on GW shares. GW, whose shares floated at 182 pence each in 2001, remained confident about Sativex's future. The firm said a large number of the regulator's original questions had been resolved and that it was now working to submit further information and clarification. It did not say when it expected the process to close. MAKE-OR-BREAK Sativex, which is sprayed into the mouth rather than smoked, is a make-or-break product for GW, which made a net loss of 8.1 million pounds in the year to September 30. The British government has already indicated it is ready to alter rules governing the use of cannabis to allow doctors to prescribe GW's medicinal formulation. But industry analysts say the key to the drug's commercial success will depend on the "label" agreed with regulators, which will determine how widely the medicine can be used. "There is a significant lack of clarity on the potential label Sativex may obtain (even if it approved), and on our analysis the commercial potential does not justify the current share price," Canaccord's Keegan wrote, cutting his price target on GW shares to 125p from 152p. Sativex is also being studied for treating pain caused by cancer and spinal cord injury, and GW is also seeking approval to sell it in other European countries and Canada. The firm has said previously it was comfortable with analysts' forecasts for the medicine to make peak sales of about 200-250 million pounds in European and Canadian markets.
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