British medicinal marijuana producer GW Pharmaceuticals (NASDAQ: GWPH) has raised $345 million to fund an expansion drive after releasing 2.18 million shares on the US Stock Exchange.
The news comes four months after its oral CBD solution earned approval to treat epilepsy sufferers in the US. Its product, Epidiolex, is the first cannabis-based medicine to gain FDA approval to supply sufferers of two severe forms of epilepsy – Lennox-Gastaut and Dravet syndromes – in America. That followed a successful trial at the Children’s Hospital of Philadelphia.
An estimated 2.2 million Americans suffer from epilepsy and a third of them continue to have seizures that current medicine cannot treat. FDA approval is a huge deal for Epidiolex, which was shown to spark a reduction in seizure frequency among 41% of Lennox-Gastaut syndrome patients. Epidiolex is expected to be available at US pharmacies before the end of 2018.
The public offering gives GW Pharmaceuticals a market capitalization of $4.3 billion. It released 1.9 million American Depository Shares and underwriters exercised their option to purchase 285,000 additional shares, at the price to the public of $158 per ADS. The share price has dipped slightly over the past couple of days, and in order to grow the firm needs to convince the market that it can diversify and generate sales among different groups, as fewer than 1,000 children per year are diagnosed with either Lennox-Gastaut and Dravet syndromes.
“The decision to raise finance was about maintaining our financial strength as we execute the launch of Epidiolex and as we maintain investment in new product development,” said GW Pharmaceuticals as it announced the news.
GW Pharmaceuticals could be set for a further boost as the UK government is on the brink of legalizing medicinal marijuana. Right now only extreme epilepsy sufferers can apply for a special permit to receive medicine like Epidiolex, but the Home Office has relaxed its stance after feedback from England’s chief medical officer about the effectiveness of CBD and it is set to allow doctors to prescribe medical marijuana, with an announcement expected in the coming weeks. That will give GW Pharmaceuticals a potentially strong domestic market as it also ramps up exports to the US.