Check off another positive clinical trial for GW Pharmaceuticals (GWPH). Yesterday the company announced that its cannabis-based drug, Epidiolex, passed a phase 3 study testing the drug in a rare epileptic disease called Dravet syndrome.

The Food and Drug Administration typically requires two clinical trials to confirm a result. For diseases with high unmet needs, the agency will often approve a drug based on one trial, but typically requires a second positive study to keep the approval.

In the case of Epidiolex, the FDA approved the drug for another rare epileptic disease called Lennox–Gastaut syndrome based on two clinical trials and for Dravet syndrome based on a single positive study. That left GW Pharmaceuticals in a situation where it had to finish a study for Dravet where a negative result could have major ramifications.

Fortunately, Epidiolex passed with flying colors. The data could even help boost sales.

Epidiolex box and bottle with syringes.

Image source: GW Pharmaceuticals.

The higher dose of 20 mg/kg/day produced a 46% reduction in convulsive seizures, while the 10 mg/kg/day dose performed even better with a 49% reduction. The data are actually a little better than the study used to gain approval where 20 mg/kg/day -- the only dose tested -- produced a 39% reduction in convulsive seizures.

Some of the difference between the two trials could be due to the placebo effect, where just the act of patients thinking that they're getting the medicine results in having fewer symptoms. In the most recent trial, the placebo reduced convulsive seizures by 27%, compared with a 13% reduction in the first trial. It makes sense that the placebo effect would be stronger in the second study where some patients may have known the drug had already been shown to work on their disease.

More importantly, the lower dose working as well as -- and perhaps even better than -- the higher dose is likely good news for GW Pharmaceuticals because the side effect profile is substantially better for the lower dose. For example, in previous studies, 17% of patients taking the 20 mg/kg/day dose had high alanine aminotransferase (ALT) levels -- a sign of potential liver damage -- compared with 1% of patients taking the 10 mg/kg/day dose.

Unfortunately, GW Pharmaceuticals didn't break out the safety data and only noted that "safety data from this trial are consistent with the previous phase 3 clinical trials." Hopefully that means a similar reduction in side effect symptoms in the lower dose, but investors will have to wait until GW Pharmaceuticals presents the data at a future medical meeting to know for sure.

Read, set, launch

Even though the FDA signed off on the marketing application in June, the U.S. Drug Enforcement Agency still had to schedule the drug, which happened in September. GW Pharmaceuticals finally launched Epidiolex earlier this month, so investors won't get to see the first sales numbers until the fourth-quarter earnings report early next year.

While it's clear Epidiolex is helping patients, GW Pharmaceuticals still has to convince insurers to pay for the medication. Hopefully, the longer-than-normal leeway between approval and launch helped the company get all the kinks worked out for a majority of the insurance plans.

GW Pharmaceuticals' investors should also be keeping an eye on Zogenix (ZGNX), which reported data from two late-stage studies of Fintepla (ZX008), a low-dose formulation of fenfluramine, showing the drug reduced convulsive seizures by 62.7% in Dravet syndrome patients. Zogenix has started a rolling submission of its marketing application to the FDA, setting up a likely approval next year. Fintepla has also shown promising results in Lennox-Gastaut syndrome, and Zogenix is enrolling a phase 3 study to get the drug approved for that disease as well.

With both drugs clearly helping patients, the competition between Epidiolex and Fintepla could ultimately come down to the safety profiles, so the lower dose of Epidiolex working so well in Davet syndrome patients appears to be very good news for GW Pharmaceuticals.