Cantor Raises GW Pharma's Target To $182 Following Second Successful Phase 3 Trial

Shares of GW Pharmaceuticals PLC GWPH were trading higher by more than 17 percent Monday, but analysts at Cantor Fitzgerald believe the surge has just begun.

GW Pharma announced a second successful pivotal trial in an ongoing Phase 3 trial which explores Epidiolex, its lead cannabinoid product.

Elemer Piros, Ph.D., Cantor Fitzgerald's analyst, noted that GW Pharma's trial announcement was essentially a "carbon copy" of the results obtained in its first trial in June. The drug "worked in a highly refractory patient population on top of additional drugs, beating placebo by a wide margin."

Related Link: Why This Epidiolex Trial Was Different

The analyst added, "At study entry, patients have already failed seven other drugs and experienced a drop seizure frequency of 85/month. During the trial patients (n=225) were taking, on average, three additional drugs plus two doses of Epidiolex or placebo. Fourteen weeks after starting treatment, seizure frequency was reduced by 17% in the placebo group vs. by 37% (p=0.0016) in the 10mg/kg arm and by 42% (p=0.0047) for those who took the 20mg/kg dose."

With that said, Piros suggested GW Pharma's Epidiolex program has now "further de-risked" and the probability of approval from the necessary regulatory agencies has risen to 90 percent from 80 percent. As such, the analyst reiterated a Buy rating on the stock with a price target raised to $182 from a previous $165.

The analyst's price target is based on a "a probability-adjusted net present value of cash flows due to Epidiolex, a value attributed to the platform and projected cash."