GW Pharmaceuticals is benefiting from being able to actively promote its cannabis-based medicine, Sativex, within European markets. UK sales, for example, reached £2m during the nine months since the medicine was commercially launched, compared with £900,000 of sales in same period last year - when only named patients could receive the drug. This, combined with £5.1m of additional milestone payments, leaves the group on track to make a small full-year profit - broker Peel Hunt anticipates pre-tax profits of £200,000.
But managing director Justin Gover remains focused on further development. "Despite the expected profits this year, we aren't quite an earnings story yet," he noted. "We still have to broaden our pipeline by developing non-Sativex cannabinoids into treatments for conditions such as diabetes and epilepsy." GW will fund most of its non-central nervous system and oncology research itself until licensing partners can be found. Research and development spending did, however, decrease to £11.3m from £12.1m due to lower activity by Otsuka, GW's main research partner. Otsuka is funding two Phase III clinical trials designed to gain approval for Sativex as a cancer pain treatment in the US, with data expected to be filed with the regulators by the end of 2012.
ORD PRICE: | 125p | MARKET VALUE: | £164m | |
TOUCH: | 124-127p | 12-MONTH HIGH: | 156p | LOW: 82p |
DIVIDEND YIELD: | nil | PE RATIO: | 15 | |
NET ASSET VALUE: | 13p* | NET CASH: | £28m |
Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2010 | 11.4 | -2.67 | -2.1 | nil |
2011 | 16.6 | 3.07 | 2.5 | nil |
% change | +45 | - | - | - |
Ex-div: - Payment: - *Includes intangible assets of £5.2m, or 4p a share |