NEW YORK (AP) — Shares of GW Pharmaceuticals jumped Monday after a Canaccord Genuity analyst raised her price target on the stock, citing positive clinical trial data for GW’s drug Sativex.
THE SPARK: Analyst Ritu Baral maintained a “Buy” rating on the shares and raised her price target to $26 from $22. She said peak sales of Sativex in the U.S. and European Union could surpass $2 billion a year.
Sativex is a cannabinoid-based spray. It is approved in Europe as a treatment for spasticity caused by multiple sclerosis, and Baral said she thinks a study of the drug as a treatment for pain caused by cancer will be successful. She expects GW to report data from that study in mid-2014.
THE BIG PICTURE: Sativex is on the market in 11 countries including the U.K., Germany, and Spain, and sales in GW’s latest fiscal quarter totaled $760,000. GW’s partner Almirall is getting ready to launch the drug in other countries. Sativex hasn’t been approved in the U.S.
Sativex is also being studied as a treatment for pain caused by cancer and nerve damage. GW Pharmaceuticals, which is based in Wilshire, U.K., is also running clinical trials of treatments for type 2 diabetes, ulcerative colitis, and schizophrenia.
On Wednesday GW said Sativex did not affect patients’ cognition or mood in a clinical study. Baral said that’s significant because MS patients often stop taking Marinol — a drug that contains synthetic THC — because of those side effects.
SHARE ACTION: U.S. shares of GW Pharmaceuticals surged $9.50, or 38.5 percent, to $34.20 in afternoon trading. The company went public in May with an IPO that priced at $8.90 a share.