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Can Marijuana Treat Diabetes?

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If medical marijuana evokes a picture of folks sitting in circles passing marijuana cigarettes, then you'll likely be surprised to learn how drugmakers like GW Pharmaceuticals (NASDAQ: GWPH  ) are using the plant to develop next-generation medicine.

GW Pharma has been studying ways to use the chemical compounds found in marijuana since 1998, and the company already markets one marijuana based drug, Sativex, in more 11 countries. That drug combines two key marijuana cannabinoids, THC and CBD, to treat multiple sclerosis.

However, GW Pharma doesn't believe the medical benefit from THC and CBD is limited to MS. It thinks they could play an important role in improving patient treatment for a variety of disease, including diabetes.

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Marijuana as a a diabetes therapy?
While the market embrace of Savitex has been tepid at best -- it sold less than $4 million of the drug in 2013 -- GW Pharma thinks it may have a chance for greater success in diabetes. That thinking is certainly backed up by the significant, and growing, need for new diabetes treatment. Roughly 70 million diabetics live in developed countries, and nearly 2 million people in the U.S. alone are diagnosed with the disease each year.

The sheer size of the patient population makes diabetes the most expensive disease in terms of drug spending, according to drug wholesaler Express Scripts. Spending on diabetes medication jumped 14% last year, and is expected to grow by 11% this year, and another 12% next year.

As a result, treating diabetes has spawned a slate of billion-dollar blockbuster treatments, the biggest of which is Sanofi's Lantus. Sanofi's Lantus commands 7% market share among diabetes drugs, and Lantus sales totaled more than $7.5 billion last year.

While Lantus is a long-acting insulin, Novo Nordisk (NYSE: NVO  ) and Eli Lilly are two of the globe's biggest sellers of short-term insulin. Novo's Novalog has more than 40% market share in rapid-acting insulin, and Lilly's Humalog had sales of $2.6 billion last year.

The commercial success of those drugs is driving significant innovation in diabetes treatment, too. Drugmakers like Johnson & Johnson (NYSE: JNJ  ) are launching SGLT-2 inhibiting drugs that help the kidney better regulate glucose levels.

Johnson's Invokana was the first SGLT-2 to reach the market, and while J&J doesn't break out sales of Invokana yet, the company's "other" drug sales, which includes Invokana, grew 15% year over year to nearly $300 million in the first quarter.

And Novo's Victoza, a GLP-1 drug that hit the market in 2010, is already selling more than $300 million a quarter -- despite competing against AstraZeneca's Byetta and Bydureon, which combined generated about $1 billion in sales for AstraZeneca last year.

Given the number of top-selling therapies, investors can understand why GW Pharma is eager to tap into that large and growing market. To do that, GW Pharma has already conducted a pre-clinical and an early stage trial of its cannabis-based drug GWP42004.

In the company's pre-clinical animal studies, low doses of THC helped mice gain less weight and boost activity, and when GW Pharma combined THC with CBD, it saw that levels of good cholesterol climbed, while overall cholesterol levels fell. That prompted GW Pharma to conduct a small human trial that showed that GWP42004 may help type 2 diabetics improve fasting glucose levels, lower blood pressure, and improve pancreatic cell function.

Whether those desirable effects will be enough for GW Pharma to eventually capture a part of the diabetes treatment market is a reasonable question. First, GW Pharma will need to prove that those benefits hold up in larger studies. The first of those studies, a phase 2 trial, is expected to begin this year.

Fool-worthy final thoughts
The potential to develop medicines from marijuana is endlessly intriguing, and companies like GW Pharma have already invested big money in evaluating cannabis in a variety of disease. Turning those investments into sales, however, has remained somewhat elusive, and the recent interest in medical marijuana has caused GW Pharma's share price to soar to arguably overpriced levels, especially given its lackluster sales.

This suggests that GW Pharma, while showing plenty of promise, but little in the way of profit, remains highly speculative. Given that, investors should take a wait-and-see approach to see whether the company can deliver on its hope to improve how we treat this important disease.

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Read/Post Comments (17) | Recommend This Article (17)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 27, 2014, at 2:26 PM, JohnThomas wrote:

    It's funny how none of these articles ever address how much consuming marijuana the old-fashioned way helps the various diseases.

    I guess there's not enough money in that for investors.

  • Report this Comment On April 27, 2014, at 3:00 PM, bobby1 wrote:

    my cousin smoked daily he had diabetes, but he died young.

  • Report this Comment On April 27, 2014, at 3:03 PM, rajak223 wrote:

    Number 1 It can treat a lot of things effectively is why its not being legalized and number 2 you will mess it up if you legalize it and Phoney Pharma gets a hold of it with Crony Capitalistic GMO'$

  • Report this Comment On April 27, 2014, at 3:06 PM, ldydi wrote:

    If I thought marijuana would cure diabetics or keep it under control I'd buy it.

  • Report this Comment On April 27, 2014, at 4:44 PM, marv wrote:

    WOW! what is going on??

  • Report this Comment On April 27, 2014, at 5:59 PM, phlogisticlee wrote:

    The Bush's drug company investments shined much brighter w/ prohibition then they would of if pot would legal 4 medical use. It is effective for a lot of things Big Pharma is so-so at.

  • Report this Comment On April 27, 2014, at 7:07 PM, fishlkmich wrote:

    When Sativex is introduced to the U.S. and South America, along with the 25+ countries that it is already sold in, it should boost sales. Most of the rest of the world is considering it, as well. The good chance that it will also be approved for and cancer and neuropathic pain should be noted. That will also increase sales, significantly.

    The author fails to note that Epidiolex, produced by GW, is in orphan drug trials for two types of childhood epilepsy.

    Two types of diabetes drugs are in the pipeline, along with drugs for schizophrenia, Crone's . . .

    This article fails to give the reader a full understanding of the companies potential product line.

  • Report this Comment On April 27, 2014, at 7:47 PM, SELLmtg wrote:

    How to profit from WA marijuana legalization in July ?

    my opinion: Buy PMCM (a mj co that owns a marijuana dispensary and marijuana production facility in Seattle, WA where WA is 1 of the 2 states

    that legalized marijuana (Yh,finance,PMCM,news 4/24, 4/16). PMCM is taking all the right steps for

    success in marijuana industry.

    Buy PMCM to profit.

  • Report this Comment On April 27, 2014, at 9:13 PM, kdavis860 wrote:

    I have nothing against using marijuana in any way that could be beneficial, but I have my doubts it will meet the tough FDA standard of being at least as effective as the best known treatment, at least in the portion of the patients for which it is recommended. I wouldn't put my money into this one. If I wanted to try to make money from marijuana compounds in the high margin industry of FDA approved drugs, I would be going after mental illnesses. There are many compounds in marijuana and many mental illnesses, and you could try each compound against each illness that seems to have a chance.

  • Report this Comment On April 27, 2014, at 10:55 PM, JaneenKozlowski wrote:

    I don't know how this will help diabeties. 1 of the side affects of marijuana use is a bad case of the munchies. It sounds like a recipe for sugar shock or diabetic coma.

  • Report this Comment On April 28, 2014, at 1:20 AM, happy4yrs wrote:

    All I can say is that I have been a diabetic since I was 18. I started smoking pot when I was 16. I am now 58 and my diabetes is in good shape!! Why is that? Could it be the medicinal good of it? Or am I just lucky? I truly believe that it HAS been good to me and have no ideas of stopping now!!!!!!

    P.S. And like all SMART diabetics, don't munch out on candy and high calorie food, us stoner diabetics know this!!!!!

  • Report this Comment On April 28, 2014, at 7:02 AM, kingfish63 wrote:


  • Report this Comment On April 28, 2014, at 7:56 AM, fishlkmich wrote:

    FDA just fast tracked Sativex for cancer pain. See my post above. This company has a huge drug pipeline, exclusive to them and a wonderful plant. The author short changed this company and the readers here.

  • Report this Comment On April 28, 2014, at 9:07 AM, QuickDraw53 wrote:

    what they need to do is make pot as a drug that would only be bought through a pharmacy. just like other drugs are done. i have heard by potheads that pot cures just about everything under the sun. just to make it sound better then it really is. since being legalized in colorado the negative side of pot is coming out and its not as useful as they want you to believe

  • Report this Comment On April 28, 2014, at 10:01 AM, fishlkmich wrote:

    That is what GW has been doing since 1998. Their products are just starting to come to market. Sativex is already helping people with MS in almost 30 countries! Now the U.S. has fast tracked it for cancer pain. How much more do you need?

    Product pipeline:

  • Report this Comment On April 28, 2014, at 12:59 PM, sherlockclark wrote:

    Thanks for the chance to comment on this article!

    I've become convinced convinced that prohibition of marijuana is a premise built upon a tissue of lies: Concern For Public Safety. Our new law in Michigan saves at least a hundred lives every year, on the highways alone. In November of 2011 a study at the University of Colorado found that, in the thirteen states that legalized medical marijuana between 1990 and 2009, traffic fatalities have dropped by nearly nine percent—now nearly ten percent in Michigan--while sales of beer went flat by five percent. No wonder Big Alcohol opposes it. Ambitious, unprincipled, profit-driven undertakers might be tempted too.

    Actually, most people--and particularly patients who medicate with cannabis--use it to replace prescription drugs or alcohol.

    I recently reviewed the Federal Census stats on yearly driving fatalities state by state, from 1990 to 2009. All states, 'legal' or not, have seen their death rates drop, but on average, those with medical laws posted declines 12% larger than the non-medical states. Public Safety Announcements and vehicles with airbags must have helped as well, consistently throughout the country, without affecting the disproportion between the 'legal states' and those 'not yet, in 2009'.

    In 2012 a study released by 4AutoinsuranceQuote cited statistics revealing that marijuana users are safer drivers than non-marijuana users, as "the only significant effect that marijuana has on operating on a motor vehicle is slower driving", which "is arguably a positive thing". Despite occasional accidents technically classified (and eagerly reported by police-blotter ‘journalists’) as ‘marijuana-related’, when in fact a mix of substances was involved. Alcohol, most likely, and/or prescription drugs, nicotine, caffeine, meth, cocaine, heroin, and a trace of the marijuana passed at a party last week. But on the whole, as revealed in big-time, insurance-industry stats, within the broad swath of mature, experienced consumers, slower and more cautious driving shows up in significant numbers. Legalization could improve those numbers further.

    Marijuana has many benefits, most of which are under-reported or never mentioned in American newspapers. Research at the University of Saskatchewan indicates that, unlike alcohol, cocaine, heroin, or Nancy (“Just say, ‘No!’”) Reagan’s beloved nicotine, marijuana actually encourages brain-cell growth. Research in Spain (the Guzman study) and other countries has discovered that it has tumor-shrinking, anti-carcinogenic properties. These were confirmed by the 30-year Tashkin population study at UCLA.

    Drugs are man-made, cooked up in labs, for the sake of patents and the profits gained by them. They are often useful, but typically come with cautionary notes and lists of side effects as long as one's arm. 'The works of Man are flawed.'

    Marijuana is a medicinal herb, the most benign and versatile in history. “Cannabis” in Latin, and “kaneh bosm” in the old Hebrew scrolls, quite literally the Biblical Tree of Life, used by early Christians to treat everything from skin diseases to deep pain and despair. The very name, “Christ” translates as “the anointed one”. Well then, anointed with what? It’s a fair question. And it wasn’t holy water, friends. Holy water came into wide use in the Middle Ages.

    Medicinal oil, for the Prince of Peace. A formula from the Biblical era has been rediscovered. It specifies a strong dose of oil from kaneh bosm, ‘the fragrant cane’ of a dozen uses: ink, paper, rope, nutrition. . . . It was clothing on their backs and incense in their temples. And a ‘skinful’ of medicinal oil could certainly calm one’s nerves, imparting a sense of benevolence and connection with all living things. No wonder that the ‘anointed one’ could gain a spark, an insight, a sense of the divine, and the confidence to convey those feelings to friends and neighbors.

    What gets to me are the politicians, prosecutors, and police who pose on church steps or kneeling in prayer on their campaign trails, but can’t face the scientific or the historical truth about cannabis, Medicinal Herb Number One, safe and effective for thousands of years, and celebrated by most of the world’s major religions.

  • Report this Comment On April 29, 2014, at 8:45 PM, dreamer75 wrote:

    To SherlockClark,

    You sound very educated and on point. You should seriously consider writing and posting a few articles of your on if you're not already doing so. Your comments contain more facts and is far more interesting than this article was. Makes for good reading.


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Todd has been helping buy side portfolio managers as an independent researcher for over a decade. In 2003, Todd founded E.B. Capital Markets, LLC, a research firm providing action oriented ideas to professional investors. Todd has provided insight to a variety of publications, including SmartMoney, Barron's, and CNN/fn.

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