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GW Pharmaceuticals Provides Preliminary Sales Update

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On January 12, GW Pharmaceuticals (NASDAQ:GWPH) announced its preliminary unaudited product sales report for the fourth quarter and 2019. For the quarter, the company expects its net product sales to be approximately $108 million, better than analysts’ expectation of $100.2 million. This estimate also represents a rise of 18.7% from $91 million in the third quarter. For 2019, GWPH expects net product sales of $309 million, which is a significant increase from $15.9 million in 2018.

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GWPH’s revenue drivers

GW Pharmaceuticals expects the sales of Epidiolex to be a significant contributor to the company’s net product sales. Epidiolex, an oral solution to treat seizures, is the only CBD product to have received FDA approval. The FDA approved Epidiolex on June 25, 2018. The company expects Epidiolex’s total product sales to come in at approximately $104 million in the fourth quarter and $296 million in 2019. The company’s cash and cash equivalents were approximately $536 million at the end of the fourth quarter.

GWPH’s priorities for 2020

Justin Gover, CEO of GWPH, was impressed by the company’s performance last year and expects it to act as a foundation for 2020. On the company’s 2020 priorities, he stated, “Our goal in 2020 is not only to continue to drive Epidiolex growth but also to leverage our world leadership in cannabinoid science to advance our pipeline. In particular, we see significant market opportunity for nabiximols in several indications in the US and will be progressing multiple late stage clinical programs in 2020.”

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To increase the sales of Epidiolex, GWPH is working with commercial and government payors to provide all patients access to Epidiolex with limited restrictions. The company is planning to enter the long-term care segment. It’s also working on getting approval to treat seizures associated with tuberous sclerosis complex in the US and Europe. The approval could significantly expand the target segment. GWPH is also hoping that the launch of Epidiolex in five major European countries will drive its revenue.

The company has also announced that it will commence clinical programs to study the effectiveness of nabiximols in treating spasticity associated with multiple sclerosis and spinal cord injury.

Stock performance

Today, GW Pharmaceuticals was trading higher. The announcement of better-than-expected preliminary net product sales appears to have led the company’s stock to rise. Since the beginning of 2019, its stock has risen 10.4% as of January 10. GWPH is one of the few cannabis companies to have delivered positive returns during the period. Peers Cresco Labs (OTCMKTS:CRLBF), OrganiGram Holdings (NASDAQ:OGI), and MedMen Enterprises (OTCMKTS:MMNFF) have fallen 17.8%, 46.1%, and 83.9%, respectively. Meanwhile, GWPH has also outperformed the ETFMG Alternative Harvest ETF (NYSE:MJ), which has lost 34.1% during the same period.

Analysts’ recommendations

As of January 10, 15 analysts covered GW Pharmaceuticals. Of these analysts, five have given it “strong buy” ratings, while the remaining ten have given it “buy” ratings. No analysts are favoring “holds” or “sells.” Jim Cramer is also bullish about the stock. For more info, read, Is GW Pharmaceuticals a Good Bet? Analysts have given GWPH a consensus price target of $204.8, which implies a 12-month return potential of 90.5%.

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