Early Epidiolex sales push up GW Pharma's stock
- Sales of GW Pharmaceuticals cannabis-based medicine Epidiolex beat early expectations from Wall Street, starting strongly in the initial months following its launch as the first plant-derived cannabinoid approved in the U.S.
- Net sales of Epidiolex are still small, totaling $4.7 million for the months of November and December, according to fourth quarter results released Tuesday, but that was nearly double forecasts of $2.5 million. Company CEO Justin Gover framed the sales start as putting the "commercial wheels in motion" for 2019.
- Helping lift expectations for 2019 were fresh prescription data put out by GW, suggesting a "strong continued ramp as coverage decisions continue to be put in place," wrote Josh Schimmer, an analyst for Evercore ISI, which upped its price target on GW nearly 15% to $194. The company's stock rose by more than 15% Wednesday morning, before falling back slightly to trade up 11%.
While beating sales forecasts marks a positive start for Epidiolex (cannabidiol), several milestones in the next few months could be more important to the drug's, and GW's, future success.
Over the second quarter of this year, company executives said they expect a European regulatory decision on Epidiolex, as well as Phase 3 trial results for the drug's use in a rare genetic disorder called tuberous sclerosis complex. GW also plans to kick off a pivotal Phase 3 study in Rett Syndrome, a rare genetic neurological disorder affecting, nearly exclusively, girls.
After launching Epidiolex on Nov. 1, GW execs outlined subsequent progress in reaching doctors and patients. Within a targeted audience of 5,000 physicians, the company's sales force has already interacted with about 70% of them. And more than 500 of those physicians wrote Epidiolex prescriptions in the drug's first two months on market.
That corresponds with roughly 4,500 new patient enrollment forms in those two months. Julian Gangolli, GW's North America president, hinted at further growth, saying prescriptions were up 150% month over month in January.
While that increase can be partially explained by more commercial patients becoming eligible for reimbursement via coverage decisions activated in January, the figures are first signs of uptake for the cannabis-based drug.
The Food and Drug Administration OK'd the drug last June to reduce seizures in patients with two types of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome. After the Drug Enforcement Agency reclassified the drug from Schedule I to Schedule V in September, GW's had a clear path to a Nov. 1 launch.
However, the reclassification is far from the last challenge GW will face in shaping the market for cannabis-based drugs. One problem the company continues to work through is reducing the time needed to fill prescriptions. Gangolli said in November and early December some patients were waiting more than four weeks to get the medicine.
But, the exec said, the company has expanded its network well beyond five specialty pharmacy providers in a closed distribution network. Now, its distribution network encompasses about 130 sites, Gangolli said, including about 40 institutional-based specialty pharmacies as well as some CVS and Walgreens locations.
"The impact of these enhancements has been significant, with many dispensing locations now being close to key epilepsy centers, which is a major benefit for patients, caregivers and physicians," he said on the fourth quarter earnings call.
When asked by an analyst how the time to fill prescriptions has changed, Gangolli declined to provide specifics beyond noting it has "meaningfully come down."
"We are still working there," he added.
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