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GW Pharmaceuticals Up on Narrower-than-Expected Q1 Loss

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GW Pharmaceuticals, Inc.GWPH reported a first-quarter fiscal 2016 (for the three months ended Dec 31, 2015) loss of $1.20 per share, narrower than the Zacks Consensus Estimate of a loss of $1.84. Investors reacted positively to the news with the stock gaining almost 7%. The reported loss, however, was much wider than the year-ago loss of 26 cents.

The company's total revenue in the first quarter of fiscal 2016 was $5.4 million, down 64% from the year-ago quarter. This reduction was primarily due to lower R&D fee charges to Otsuka. Nevertheless, revenues were above the Zacks Consensus Estimate of $4 million.

Research & development expenses were up 51.4% year over year to $35.7 million due to investments in pipeline. Sales, general and administrative expenses shot up to $5.4 million from $1.2 million in the prior-year quarter. Pre-launch commercialization activities related to Epidiolex in the U.S led to the increase in expenses.

The company's key growth driver, Sativex, is approved outside the U.S. for the treatment of spasticity associated with multiple sclerosis. Sativex is currently being evaluated in a phase II study for spasticity due to cerebral palsy, with data expected in the second half of fiscal 2016.

GW Pharma's pipeline also includes interesting candidates like cannabidiol-based drug, Epidiolex. Epidiolex is currently in phase III development for the treatment of Dravet syndrome and Lennox-Gastaut syndrome. The company plans to initiate another phase III study on Epidiolex for the treatment of tuberous sclerosis complex shortly. The company is preparing to submit a regulatory application for the candidate in 2016. Investor focus is expected to remain on pipeline updates, going ahead.

GW Pharma currently has a Zacks Rank #2 (Buy). Other favorably placed stocks in the health care sector include Anika Therapeutics Inc. ANIK , Gilead Sciences Inc. GILD and Baxalta Incorporated BXLT . All three stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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