Cantor Fitzgerald Bullish On GW Pharmaceuticals, Sees 75% Upside Potential

GW Pharmaceuticals plc GWPH Epidiolex drug and earlier-stage programs Sativex and CBDV will represent major catalysts for the stock in the near-term, in Cantor Fitzgerald's view. 

The Analyst

Analyst Elemer Piros reiterated an Overweight on GW Pharmaceuticals with a $211 price target. 

The Thesis

Cantor's thesis is focused on Epidiolex. Since its Nov. 1 launch, Epidiolex is seeing strong demand in the U.S., Piros said in a Tuesday note. (See his track record here.) 

 In Europe, where Epidiolex is awaiting approval from the EMA, GW has already launched marketing campaigns in five major markets, the analyst said. 

Epidiolex has shown strong results in the second study of the drug in Dravet Syndrome, Piros said. 

Cantor Fitzgerald estimated the company's fair value by calculating the risk-adjusted cash flow for Epidiolex. Cantor's estimates imply a UK tax rate of 21 percent and a 15-percent discount rate, which results in a sum of risk-adjusted NPV for Epidiolex of around $5.1 billion.

Cantor added $500 million for the drug portfolio and $348 million in cash, obtaining a total value for the company of $6 billion, or $211 per ADS.

Price Action

GW Pharmaceuticals shares were down 1.36 percent at $120.07 at the time of publication Wednesday. 

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