Shares in GW Pharmaceuticals skyrocketed more than 120 percent Monday, following positive results in the first Phase 3 study of its investigational medicine Epidiolex.
The experimental cannabis-based drug has successfully treated children with a rare form of severe epilepsy in a keenly anticipated clinical trial, more than doubling the value of its maker.
“The positive outcome of this Phase 3 trial is a significant milestone in the development of Epidiolex as a potential new treatment for patients suffering from Dravet syndrome,” Justin Gover, CEO of GW Pharmaceuticals, said in a statement. “We are excited about the potential for Epidiolex to become the first FDA approved treatment option specifically for Dravet syndrome patients and their families.”
The study of GW’s Epidiolex in Dravet syndrome is the first of four final-stage Phase III epilepsy trials, with results expected this year, that the drugmaker hopes will confirm the therapeutic benefits of cannabinoids, the active ingredients found in marijuana.
GW said on Monday the 120-patient trial showed patients taking Epidiolex achieved a median reduction in monthly convulsive seizures of 39 percent compared with a reduction on placebo of 13 percent.
The difference was highly statistically significant and optimism about the drug’s future sales sent shares in GW up 125 percent by 1230 GMT.
“This shows that cannabinoids can produce compelling and clinical important data and represent a highly promising new class of medications, hopefully in a range of conditions,” Chief Executive Justin Gover told Reuters.
In light of the positive data, Gover said GW would now request a meeting with the U.S. Food and Drug Administration (FDA) to discuss its plans to seek regulatory approval for treating this particular form of epilepsy.
There are currently no FDA-approved therapies for Dravet syndrome.
Epidiolex, which is given as a child-friendly syrup, is also being tested in Phase III trials for another rare type of epilepsy called Lennox-Gastaut syndrome, with results due this year, and a late-stage study in a third epilepsy indication, tuberous sclerosis complex, is due to start soon.
Analysts, on average, believe the drug could generate annual sales of $1.1 billion by 2021, according to consensus forecasts compiled by Thomson Reuters Cortellis.
GW was founded in 1998 with the aim of capitalizing on the medical benefits of cannabis, while purifying the active ingredients so as to avoid psychoactive effects.
Its multiple sclerosis treatment Sativex, which is sprayed under the tongue and is distributed by marketing partners, already has regulatory approval in more than 20 countries, although not the United States.
Epidiolex, however, is commercially far more significant since GW retains full control of the product and the company has also geared the medicine’s development to the big U.S. marketplace.
Hopes for the new drug have been building following positive feedback from “compassionate access” programs involving hundreds of American children, but the Phase III program is the make-or-break hurdle.
Gover said the success of the first Phase III trial signaled that the access programs had painted an accurate picture of the drug’s efficacy.
“It clearly provides us with an excellent basis to be confident about the outcome of the additional trials because this trial has shown that the previous open-label data was very predictive,” he said.
GW has strong British roots, with a government license to grow cannabis plants for its medicines in southern England. But it has had a rocky time on the London stock market over the years and in 2013 opted for a dual listing on Nasdaq, where it raised nearly $500 million from U.S. investors.
Following a roller-coaster ride for the shares in the past couple of years, Monday’s stock surge values the group at around $1.9 billion.
— CNBC’s Sarah Whitten contributed to this report.