J.P Morgan analyst Cory Kasimov initiates coverage for medical cannabis company GW Pharmaceuticals (GWPH), calling it a “clear leader” in the field of cannabinoid science and drug development. Kasimov says his favorable view on the company’s commercial prospects encourages him to rate the stock Outperform with a price target of $134, showing a potential of nearly 33% upside from current levels. (To watch Kasimov’s track record, click here)
Headquartered in Cambridge, U.K, the company specializes in treating patients who suffer from epileptic seizures by using cannabidiol (CBD). GWPH’s oral medicine called “Epidiolex” was the first cannabis-derived treatment to gain FDA approval. GWPH’s other drug, Sativex is approved in 25 countries outside of the U.S. and is used to treat multiple sclerosis.
Kasimov looks on the company agreeably for having decades of proprietary research and “know-how.” Additionally, the analyst sees Epidiolex as a driver in its field being that epilepsy is so severe and the medication has a positive safety profile. He believes the treatment will be quickly adopted by the medical community and suggests two upside drivers include the potential for material off-label use for the large population of epilepsy patients and he also foresees a delay in generic spinoffs beyond 2027. The analyst notes he is encouraged by the positive feedback from patients who have been asking for the medication by its name.
“Commercially, we believe that GWPH’s flagship product, Epidiolex (recently approved for several congenital seizure syndromes), is poised for a solid launch in approved indications, while penetration into the broader (and much larger) population of general epilepsy patients could serve as material upside to our current WW peak sales estimates of ~$1.3B. Given our favorable view on Epidiolex’s commercial prospects, a second (possibly underappreciated) revenue driver in Sativex, material news flow (both regulatory and clinical) in 2019, and the ~47% pullback since late Sept, we think GWPH could be a relative outperformer in our universe,” the analyst explains.
Wall Street loves the dynamics at play with this cannabis stock and TipRanks analytics show analysts consider it a “Strong Buy.” Out of 8 analysts, 7 are bullish and 1 is sidelined. With a price target of $178.71, the potential upside is a whopping 76%. (See GWPH’s price targets and analyst ratings on TipRanks)