GWPH Stock Forecast: One Drug to Move Medical Marijuana Market Even Higher

GWPH Stock Forecast 27 June
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Epidiolex Stock Prices

Today marks a turning point in the legal marijuana market. The first ever FDA-approved cannabis drug, “Epidiolex,” is going to be the trailblazer for cannabis-derived medicines in the United States.

GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) will supply the drug to the U.S. market via its subsidiary Greenwich Biosciences, Inc.

With the drug on its way, the GWPH stock predictions are brightening up. So, what does the GW Pharmaceuticals stock forecast look like?

At the moment, things are little dour, but the long-term outlook is promising.

Nevertheless, let’s go over what has happened with Epidiolex.

The epilepsy drug received approval by the U.S. Food and Drug Administration (FDA) on June 25, with GWPH stock rising in anticipation.

But the stock has, in fact, tumbled following the run-up to the FDA approval, which saw the drugmaker’s stock spike for several months.

Despite the pullback and the effect it will have on the GWPH stock predictions, this is an important day for medical marijuana stocks in general.

“This approval serves as a reminder that advancing sound development programs that properly evaluate active ingredients contained in marijuana can lead to important medical therapies,” said FDA Commissioner Scott Gottlieb. (Source: “US approves first marijuana plant-derived drug,” Reuters, June 25, 2018.)

This is a ringing endorsement of the restorative qualities of cannabis from the nation’s top medicine regulator. It shows a willingness from the federal government to move toward marijuana acceptance, something that will greatly benefit medical marijuana stocks.

After all, by accepting Epidiolex, the FDA is saying in no uncertain terms that there are benefits to be reaped from cannabis. That will inspire further research and medicines.

Epidiolex is used in the treatment of epilepsy by making use of cannabidiol (CBD). CBD contains less than 0.1% of the notorious chemical THC, which is responsible for the high from marijuana.

GW Pharmaceuticals, based in the U.K., grows its own supply of cannabis in specialized glass houses to ensure uniformity and even distribution among the genetic compositions of the plants. They are then processed into liquid CBD.

But while the FDA approval is a huge win for medical marijuana stocks—and the marijuana market more broadly—there are still some hurdles to vault.

First, the Drug Enforcement Agency (DEA) still classifies marijuana as a Schedule I drug, alongside heroin and other deadly substances.

As a Schedule I drug, the DEA considers marijuana to be deadly and without medical benefit. The FDA approval would force the law enforcement body to reconsider its stance, which GW Pharmaceuticals expects to occur within 90 days.

If the drug is eventually removed from the Schedule I classification, that would be a huge win for the marijuana market, as it would remove a huge barrier toward marijuana legalization in the U.S.

After all, being a Schedule I drug is partially what gives U.S. Attorney General Jeff Sessions such wide-ranging powers to enforce his draconian views of cannabis on states even where the drug is legalized.

Reclassifying the drug would go a long way toward hampering further interference from the federal government in states where marijuana is legal.

That would be a huge win for the entire U.S. marijuana industry and allow marijuana bulls to breathe a sigh of relief.

GW Pharmaceuticals Stock Forecast

Here’s my GW Pharmaceuticals stock forecast now that Epidiolex is FDA-approved.

The company is up about seven percent on the year, but with today’s decline of about two percent (hardly what marijuana bulls want to see), GWPH stock is performing much as it has the whole year: unevenly.

Looking at the GW Pharmaceuticals stock chart, you can see that the stock has been characterized by large peaks and valleys in 2018.

Chart courtesy of StockCharts.com

The first significant drop in the stock price came when the company presented weak Phase 2a test results for its drug cannabidivarin (CBDV). CBDV is a cannabis-based molecule that GW Pharmaceuticals is evaluating for the treatment of people with focal seizures.

The CBDV test failure in Phase 2a showed little difference between the effects of the placebo given to the control group and the actual drug given to other participants. (Source: “GW Pharmaceuticals Announces Preliminary Results of Phase 2a Study for its Pipeline Compound GWP42006,” GW Pharmaceuticals, February 21, 2018.)

What followed the announcement was a 10% decline in the GWPH stock value in a single day.

But the company was able to recover from that dismal outing as momentum built toward the FDA approval of Epidiolex.

But, as we can see from the stock charts and the weak performance today, the company was not able to parlay that momentum into sustainable gains, instead earning stock value on hype then losing it when the substance of the hype came to fruition.

Which is to say, investor excitement spiked GWPH stock too high and now the company is taking a hit.

Overall, however, GWPH stock is a steady performer, gaining about 37% over the past year.

Analyst Take

While GWPH stock has not benefited much on the stock market from the FDA approval, Epidiolex is still a very important drug.

Aside from the fact that it may be able to help people who once had no options to treat their conditions, it opens the way for more companies to enter the market with cannabis-based drugs.

The whole cannabis industry is going to benefit greatly from that progress, even if the GWPH stock forecast remains muted until the first sales of the drug.