UK's GW Pharmaceuticals aims to build on cannabis drug

There are few entities that can publicly boast that they grow 20 tonnes of cannabis a year with government approval. GW Pharmaceuticals, however, is one of them.


The crop’s Home Office-approved location is shrouded in mystery, with the only hint from GW being that it is “somewhere in the south” of the UK.


From a plant better known for its illicit use, the British biotech group created the drug Sativex, an oral spray medication used to ease spasticity in multiple sclerosis patients, which is available on prescription in New Zealand, Canada, Spain and the UK, and has recently been approved in Sweden.


Sativex, launched in the UK in June, is the only cannabis-based medicine to receive approval from medical authorities for use as a prescription drug, and has been the driving force behind Aim-traded GW.


However, Justin Gover, managing director, believes that the drug is only the first of several that the company will bring to the market.


“We have done this for Sativex and there is no reason why we can’t do it for three or four more,” he says in an interview with the Financial Times. “All our medicines are cousins – they all come from the same plant and are therefore very similar.”


Mr Gover believes that the active molecules found in cannabis, known as cannabinoids, can be used to treat conditions including diabetes, high cholesterol, liver problems and even cancer itself.


The group has spent £5m of its own cash in developing treatments for what Mr Gover calls “metabolic syndrome” – or the effects of modern diets and lifestyles on our health.

“It is part of taking the company from being a young drug development company with a focus on a lead product to expand into other areas,” he says.


“We have two major ambitions for us. The first is to maximise the opportunities of Sativex itself . . . and the second is to realise value from the use of cannabinoid’s across multiple therapeutic areas. And that’s our competitive and strategic position in the industry.”


GW’s trials of an oral capsule to treat type two diabetes is in the second stage of clinical trials. It has signed two deals worth a total of $21m with Otsuka, the Japanese drug group, on pre-clinical testing of cannabinoid’s to treat epilepsy, as well as various cancers including prostate, breast and glioma (brain cancer).


The company is also working with Otsuka to test Sativex for relief of pain caused by illnesses including cancer, in a market that is estimated to be worth $1.7bn (£1bn) a year in the US alone.
Earlier this year, GW signed a £20.7m distribution deal for Sativex with Novartis for some emerging markets – a deal that includes milestone payments for GW of $34m, conditional on winning regulatory approval and other hurdles, and double-digit royalties – to complement existing alliances with Almirall and Bayer.


“This is the next opportunity for us – to take the same drug and get it approved for a different use,” Mr Gover says.


As GW’s medicines come from cannabis – a natural product – instead of a synthetic compound, intellectual property rights on the drug are limited, extracting the cannabinoids in the manufacturing process is complex, and Home Office regulatory approval is difficult.


However, the complexity of creating its drugs is also a deterrent to possible generic rivals, Mr Gover says. “Our area requires a new expertise for generic drug companies to reproduce these medicines, so we’re not overly concerned with them.”


The approval of Sativex and GW’s expansion into other drugs comes after a lean spell that it endured from 2004-07, when its shares dropped from above 200p to below 30p, after a spate of trials failed to show convincingly that cannabis-based products could relieve pain. The shares stood at 81.50p in late trading on Wednesday.


However, the eventual launch of Sativex and its financial boost to GW has enabled the company to further investigate the medical possibilities for cannabis, Mr Gover says.


“If we can continue to demonstrate that cannabinoid’s – these fascinating molecules that sit within the cannabis plant – have these range of applications and opportunities, we can harness our position in the industry to stay as leaders in this field.”


28 December, 2011
By Mark Wembridge
Financial Times