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When investors miss out on a successful investment opportunity, they can’t roll
back the clock. Or can they?
The chart below shows the performance of GW Pharma’s market valuation from its $8.90/ share IPO price in May of 2014 when they were focused on developing a cannabis- based treatment for spastic muscle syndrome in MS patients. One year later when they announced that they were going to begin studies to treat childhood epilepsy with their orally delivered CBD product Epidiolex, their valuation jumped 10-fold to $86 / share, a
$1.8 billion valuation. FDA approval of this highly effective CBD treatment in 2018 resulted in a share price of $158 and a $4 billion market valuation. In 2021 when 2nd year sales of Epidiolex hit $500 million, GW Pharma was acquired by Jazz Pharma for $220 / share, a $7.2 billion valuation and a 24-fold increase from its IPO price.
As A-Synaptic moves ahead with its plan to use its patented transdermal delivery technology to create a competing CBD based epilepsy treatment, much more is known than when GW Pharma began its studies:
- We now know that CBD is a highly effective treatment for certain epileptic conditions and that it has already been approved by the FDA.
- Medical insurance reimbursement is in place and this product is now generating over $800 million / year in revenue with over 90% gross profit margins. Epidiolex has also been launched in 5 European countries as is forecast by Jazz Pharma to be a $1.5 billion annual sales drug by 2025.
- A-Synaptic has recently completed a Human Bioavailability study sanctioned by Health Canada that demonstrated that its GT4 transdermal technology is able to deliver CBD and THC through the skin into the bloodstream. This delivery method by passes the GI tract and first pass liver effect. Delivery through the skin eliminates compliance issues associated with the need for large quantities of Epidiolex to be taken orally twice a day. More importantly, it means that a much lower dose of CBD can be used which is expected to result in a safer product, one without liver toxicity warnings in its package insert as is the case for Epidiolex. In its upcoming physician led IND studies A-Synaptic is proposing a transdermal dose that is twenty percent (1/5th) of the normal oral dose of CBD.
- We also know that the FDA has a shorter, less costly drug approval pathway called 505 (b) (2) that requires an already approved predicate drug to be in place. Epidiolex is that predicate drug.
A-Synaptic is not just an epilepsy treatment, but a very efficient prescriptive cannabis delivery platform with other opportunities available.
GW Pharma Valuation
