GW Pharma files for $179M offering to advance cannabis-based pipeline

Having led the invasion of Euro biotechs onto Nasdaq and been rewarded with a 1,000% increase in its stock price, GW Pharmaceuticals ($GWPH) has gone back to U.S. investors for a boost to its finances. The plan is to raise $179 million (€162 million) to finance a multi-front R&D program.

London, U.K.-based GW plans to set aside $30 million for the development of Epidiolex in orphan indications beyond its two current targets. The purified, tetrahydrocannabinol-free cannabinoid is already entering Phase III trials as a treatment for Dravet syndrome and Lennox-Gastaut, forms of childhood epilepsy. The next step is to investigate whether Epidiolex can have an effect on tuberous sclerosis complex (TSC), a genetic disorder associated with the development of nonmalignant tumors in the brain, eyes, heart and other organs.

GW identified TSC as a possible target indication for Epidolex after going over data generated in an expanded access program. More than three-quarters of the 50,000 people affected by TSC in the U.S. suffer from epilepsy, a symptom GW thinks Epidolex may be able to treat. The drugmaker is adding TSC patients to its expanded access program and preparing to start a clinical trial later this year. GW is ready to pump $30 million into its TSC program and other indications for Epidolex and has earmarked a further $30 million for new products.

An intravenous cannabinoid treatment for neonatal hypoxic-ischemic encephalopathy--a potentially fatal brain injury caused by oxygen deprivation during birth--is top of GW's priorities for the $30 million pipeline-expansion fund. FDA awarded the treatment orphan drug status recently and GW expects to start a Phase I trial in the back half of the year. The rest of the money--around $80 million after costs and before a possible over-allotment--will go toward preparing to bring Epidolex to market in the U.S. and general corporate purposes.

GW has seen its center of gravity swing toward the U.S. in recent years. The country is its main commercial focus and the source of much of its recent investment. The firm listed on London's AIM in 2001 and traded at around--and sometimes a long way below--£100 a share for more than a decade. Then, within 6 months of listing on Nasdaq in 2013, its stock went on a tear that drove it past £650 a pop earlier this week. On Nasdaq, it is up more than 1000% since the IPO, a jump that has helped GW finance its ambition to grow into a standalone company selling its own drugs.

While the U.S. is expected to account for a large slice of sales of those drugs and the investment that pays for their development, GW is keeping its R&D and manufacturing base in the U.K. "We are a British company and the investment and expertise we've built up is concentrated here," GW CEO Justin Gover told the Financial Times.

- read the SEC filing
- here's the release
- and the FT's take

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