British medical cannabis provider GW Pharmaceuticals could be about to be taken over by an unidentified investor, as they discuss options with investment bank Morgan Stanley. Shares in the company that developed Epidiolex, a cannabis-based treatment for epilepsy, have shot up by 22% since news of this consultation spread.

Epidiolex is currently in late-stage clinical trials and could receive Food and Drug Administation (FDA) approval as early as next year. However, Alan Brochstein, a founding partner at New Cannabis Ventures, claims that the buyout “seems a bit premature”, pointing out that the results of the Stage 3 clinical trials of Epidiolex are yet to be released.

Despite this, analysis by Cantor Fitzgerald has predicted sales of Epidiolex at around £1.4 billion/year in the US and Europe, so it is not hard to see why it might be a tantalising investment prospect. It seems like a prudent move to bag the company at this critical period before its presumed approval and the money comes flooding in.

Speculation about potential buyers has mainly revolved around companies that worked with GWP on their other cannabis-based drug, Savitex, which is used to treat Multiple Sclerosis. These include Novartis AG, Bayer AG and Almirall SA. If one of these, or another large company, does push to take over, GWP could become the next biotechnology company to make a killing, hot on the footsteps of cancer drug company Medivaiton Inc, recently bought out for $14 billion.

Success of companies like GWP is another nail in the head of the coffin of claims that cannabis does not possess substantial medical benefits. Both Savitex and Epidiolex have excelled in clinical trials to date and there is evidence of a significant demand. The company is also thought to be working on treatments for other illnesses such as diabetes and schizophrenia.

Words by Abbie Llewelyn. Tweets @abbiemunch

 

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