(Bloomberg Businessweek) -- GW Pharmaceuticals Plc grows about 20 tons of cannabis annually at greenhouses the size of football fields in an undisclosed corner of the English countryside. But you can forget about getting blazed to Family Guy reruns with this crop. The plants, genetically modified to remove the psychoactive properties, are used to produce Epidiolex, a prescription drug for children with severe epilepsy. The U.S. Food and Drug Administration approved the treatment on June 25, making it the first prescription medicine derived from cannabis permitted to be sold in the U.S.
The decision is a boost for the U.K.’s biotech industry and bolsters the nation’s position, according to the United Nations, as the biggest producer of cannabis for medical and scientific purposes. That’s despite the U.K. government’s steadfast opposition to legalization of medical marijuana. “It’s a watershed event to get FDA approval,” says Sasha Kaplun, vice president for corporate development at Auxly Cannabis Group Inc., an investment partnership in Toronto. Approval should help alleviate skepticism among some physicians about the plant’s medical uses, Kaplun says.
Epidiolex sales could reach $1.3 billion by 2022, say analysts at Cowen & Co., dwarfing GW’s revenue of $17 million last year. In anticipation of approval, investors sent the company’s market value soaring to more than $4 billion, making it one of the world’s most valuable publicly traded weed farmers, alongside Canadian conventional medical marijuana makers Canopy Growth Corp. and Aurora Cannabis Inc.
GW is eager to distance itself from the craze around pot stocks. At the company’s headquarters in London’s Mayfair district, a preferred locale for hedge funds, the dress code leans toward suits and ties rather than tie-dyes. Shelves are lined with glass statuettes of cannabis leaves, but they commemorate stock market listings led by blue-chip underwriters such as Morgan Stanley and Bank of America Corp.’s Merrill Lynch. “We’re an unusual company, and I get that we probably wouldn’t have quite the level of media interest if we were developing something from a source no one had ever heard of,” says Chief Executive Officer Justin Gover. “But what is more important is what our medicines do, rather than where they come from.”
Patients with Lennox-Gastaut syndrome, a rare form of epilepsy, who took Epidiolex in an advanced clinical test in 2018 were far less likely to experience seizures than those who were given a placebo. The intractable disease puts children at risk of developmental delays and even death.
While the drug can reduce the frequency of seizures, only a few patients saw a complete halt in them, says Shlomo Shinnar, who runs the Comprehensive Epilepsy Management Center at Montefiore Medical Center in New York. “It’s effective, but that’s not the same thing as making you seizure-free,” says Shinnar, whose center has used the drug in clinical trials and through GW’s compassionate-use program for patients with few alternatives. “People want to be seizure-free, and if they aren’t, they’ll try another drug if it comes along.”
Epidiolex’s active compound, cannabidiol, produces an anticonvulsant effect through its interaction with various ion channels, which are prominent components of the nervous system. GW scientists manipulate four areas of the marijuana plant’s DNA to achieve the desired levels of chemicals, breeding it to be high in cannabidiol and low in tetrahydrocannabinol, or THC, the chemical associated with getting high. THC is further reduced to trace amounts during manufacturing.
GW hasn’t disclosed what it intends to charge for Epidiolex, but winning approval in the world’s largest drug market could ease a stigma that’s restricted research into the medical benefits of the pot plant. Says Gover: “There’s more to cannabis than people just getting high.” —With John Lauerman
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