GW Bio-Phama’s (GWPH’s) Big Day; Cowen & Company’s Top Cannabis-Based Stock Picks
It was a great day for GW Bio-Pharma (GWPH), as an FDA Panel today voted 13-0 to approve the company’s cannabinoid-based drug Epidiolex (cannabinoid oral solution),” for the treatment of a severe/rare form of childhood epilepsy/severe seizures citing the positive benefits of the drug. While today’s vote was not full FDA approval, the agency usually follows the recommendations of the panel. The FDA is scheduled to vote on Epidiloex, June 27; and barring any unforseen hiccups or snafu’s, full FDA approval is expected on June 27, 2018.
While this is great news for shareholders, it is even better news for patents, who are desperate for new drugs to treat a particular nasty form of childhood epilepsy. Today’s vote is a watershed event, in that the FDA has signaled that it is willing to consider, and approve cannabinoid-based alternatives to opioids for the treatment of pain in cancer patients. Cannabiod’s have also shown great promise in the treatment of Alzheimer’s, Crohn’s Disease, and Parkinson’s, among other diseases/conditions.
Vivan Azer, Cowen & Company’s Chief Analyst for the Beverage, Cannabis, and Tobacco industries, was interviewed on CNBC’s Fast Money this evening (April 19, 2018) regarding the news about GWPH, and her outlook/top picks in the burgeoning cannabis domain. Ms. Azer, and Cowen & Company are considered the top/consensus Wall Street firm covering the marijuana sector. Ms. Azer has been following/studying the marijuana sector for about 18 months now; and, much of her focus has necessarily been on Canada’s weed industry — referred to by some as the world’s ‘Silicon Valley’ for pot.
Cowen & Co. estimates that U.S. sales GWPH’s Epidiloex — once approved — will be around $160M in 2019; $540M in 2020; $1.1B in 2021; and, leveling out at $1.3B in 2022.
Total cannabis industry sales in the U.S are now about $50B Ms. Azer told CNBC; and, she expects that number to grow to $75B by 2030, if marijuana is legalized in the United States. I suspect those numbers are on the low end; but, that is just my opinion.
Ms. Azer’s top cannabis stock pick is Canopy Growth (TWMJF) in Canada. Tim Seymour, one of the CNBC Fast Money panelists, likes (besides GWPH and Canopy): Auora (ACB), MedReLeaf (MEDFF), Aphria (APHQF), Cannimed (CMED), and the Cronos Group (CRON).
I may well try and get a position in Canopy Growth tomorrow, or soon. With respect to GWPH, I am holding onto my shares; and, increased my position yesterday, going into today’s vote. The stock shot higher on Monday as traders postured ahead of today’s vote. There is considerable short positions in GWPH, traders who were betting the FDA would vote no on GWPH’s drug. I do not know how much more shorts are still ‘alive,’ as tjey say; but, they will almost certainly have to cover, which should move shares higher. GWPH could also, obviously become a takeover candidate.
Having said all that, there are no guarantees in this ‘game.’ Make sure you do your own due diligence, understand your risk tolerance and time horizon, etc. Otherwise, good luck. ‘Smokem….if you gottem.’ RCP, fortunascorner.com