Back in April, I talked about how GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) was one of the best plays on medical marijuana. Considering the way the cannabinoids work, it makes sense that the main application for medical marijuana would be for neurological disorders — something GWPH was quick to latch on to.
GWPH stock has certainly had its trying times — falling on reports stating that medical cannabis could take a way billions of dollars in sales from the pharmaceutical industry for the different conditions it can treat, including epilepsy. This in turn renewed fears that simple marijuana, which is not expensive, can be just as an effective treatment as a pricey pharma drug.
By June, the shares traded as low as $95.65, and today they trade around $130 — a 36% turnaround! GWPH stock is volatile, but I think it’s one worth holding in your portfolio. When its back is against the wall, it comes out swinging.
For example, it has handled a variety of fears and misconceptions surrounding its star potential product for treatment of childhood epilepsy: Epidiolex. This drug treats Dravet syndrome, which causes epileptic seizures in the first year of life due to Lennox-Gastaut syndrome (LGS), tuberous sclerosis complex (TSC) and infantile spasms (IS).
GWPH also dealt with a delay in the filing of a New Drug Application (NDA) with the FDA, competitive threats and the totally unfounded fear that the proprietary active ingredient in the drug was not responsible for its success in clinical trials and concerns that medical marijuana could be just as effective.
GWPH Stock Is Back on Track
Everything seems to be back on track for GWPH stock now after the FDA accepted the NDA and is giving it proprietary review.
The drug should be approved by the middle of the year, at which point I believe strong early sales could take GWPH stock to $150 and beyond as confidence is gained that Epidiolex can bring in $2 billion in annual sales. Other developments in the company’s pipeline this year are also possible and only add to the attractiveness of the shares.
While GW Pharmaceuticals did come under pressure after U.S. Attorney General Jeff Sessions gave prosecutors more leeway in enforcing federal marijuana laws in states where it is legal, I believe his ruling will not impact GWPH stock in the long-term, as the company is not developing recreational marijuana but medicines used to treat rare and debilitating illnesses.
While GW Pharmaceuticals shares might chop around a bit more, I see them as a good buying opportunity anytime they trade below $130 and I am confident GWPH stock will hit $150 (and go potentially higher) once the FDA approves Epidiolex this year.
Hilary Kramer is the editor of GameChangers, Breakout Stocks, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.