Why the FDA Is High on a Marijuana Drug – Bloomberg
GW Pharmaceuticals Plc grows about 20 tons of cannabis annually at greenhouses the size of football fields in an undisclosed corner of the English countryside. But you can forget about getting blazed to Family Guy reruns with this crop. The plants, genetically modified to remove the psychoactive properties, are used to produce Epidiolex, a prescription drug for children with severe epilepsy. The U.S. Food and Drug Administration approved the treatment on June 25, making it the first prescription medicine derived from cannabis permitted to be sold in the U.S.
The decision is a boost for the U.K.’s biotech industry and bolsters the nation’s position, according to the United Nations, as the biggest producer of cannabis for medical and scientific purposes. That’s despite the U.K. government’s steadfast opposition to legalization of medical marijuana. “It’s a watershed event to get FDA approval,” says Sasha Kaplun, vice president for corporate development at Auxly Cannabis Group Inc., an investment partnership in Toronto. Approval should help alleviate skepticism among some physicians about the plant’s medical uses, Kaplun says.
Epidiolex sales could reach $1.3 billion by 2022, say analysts at Cowen & Co., dwarfing GW’s revenue of $17 million last year. In anticipation of approval, investors sent the company’s market value soaring to more than $4 billion, making it one of the world’s most valuable publicly traded weed farmers, alongside Canadian conventional medical marijuana makers Canopy Growth Corp. and Aurora Cannabis Inc.
GW is eager to distance itself from the craze around pot stocks. At the company’s headquarters in London’s Mayfair district, a preferred locale for hedge funds, the dress code leans toward suits and ties rather than tie-dyes. Shelves are lined with glass statuettes of cannabis leaves, but they commemorate stock market listings led by blue-chip underwriters such as Morgan Stanley and Bank of