Edison Issues ADR Update on GW Pharmaceuticals

Jun 08, 2016, 12:10 ET from Edison Investment Research

LONDON, June 8, 2016 /PRNewswire/ --

Data from two Phase III trials (with 171 and 225 patients, respectively) of Epidiolex in Lennox-Gastaut (LGS) patients are coming soon with the first trial to report out in June with the second coming in Q316. In the latest expanded access program data, Epidiolex reduced atonic/drop seizure frequency by a median of 71.1%. Previous data suggest a placebo response rate in LGS of around 10% which, combined with the size of the trials, indicates sufficient power to demonstrate a difference.

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Our valuation is now $2.16bn ($98.84/ADS) vs $2.04bn ($93.64/ADS) after increasing the probability of success for Epidiolex in Dravet to 90% from 70% following the successful Phase III trial. Also, the probability of success of TSC has been increased from 30% to 60% following the Dravet results and the initiation of the Phase III trial. These changes on valuation were mitigated somewhat by an increase in R&D and SG&A estimates. We now estimate profitability in 2019 (previously 2018) with a total cash burn of around $230m until then. We estimate that GW has enough cash to achieve its goals without additional capital.  

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