Sizzle or fizzle? That's the big question that many investors have about the first plant-based cannabis drug to reach the market, GW Pharmaceuticals' (GWPH) Epidiolex. Expectations are all over the map as to how big of a commercial success the drug will be.

GW Pharmaceuticals CEO Justin Gover spoke on Tuesday at the healthcare industry's biggest event, the annual J.P. Morgan Healthcare Conference. And if you dig deep enough into Gover's presentation, there were seven reasons to think that Epidiolex will be a big winner in the marketplace. 

Epidiolex box, bottle, and syringes

Image source: GW Pharmaceuticals.

1. Real-world experience

Gover showed the audience a video of a young girl named Grace who has Dravet syndrome, a rare form of childhood epilepsy that's one of the two indications for which Epidiolex won FDA approval. Grace's life has improved as a result of taking Epidiolex. And while she's just one example, GW Pharmaceuticals a lot more real-world experience that should go a long way in convincing healthcare providers to prescribe Epidiolex.

More than 2,000 patients with Dravet syndrome or Lennox-Gastaut syndrome (LGS) have been treated with Epidiolex through GW's compassionate use program and open-label extension studies. That's a tremendous population for the company to point to when educating and selling physicians about the efficacy and safety of Epidiolex.

2. Significant unmet need

Gover pointed out that Dravet syndrome and LGS remain two of the most difficult-to-treat types of epilepsy. Epidiolex is the first FDA-approved drug for treating Dravet syndrome. And while there are existing approved therapies for LGS, no new treatment has hit the market in eight years. Many LGS patients must switch drugs over time.

The bottom line is that significant unmet need exists for both Dravet and LGS. Epidiolex will present a breath of fresh air that could excite patients and physicians.

3. A solid commercial team in place and active

GW Pharmaceuticals has assembled a team with strong epilepsy and rare-disease experience to market Epidiolex, according to Gover. The company has 15 medical science liaisons and a sales organization with 66 neurology account managers targeting around 5,000 doctors.

Gover stated that so far there have been interactions with roughly 70% of the targeted physicians, including all of the level 3 and level 4 epilepsy centers in the U.S. GW's team is also conducting a major educational campaign and recently held a nationwide live broadcast at 55 sites that included more than 500 of the targeted physicians.

4. Strong early payer acceptance

Anyone who thought that GW would get a lot of pushback from payers on covering Epidiolex will be in for a rude awakening. Gover said that four of the five largest U.S. payers have already initiated coverage of Epidiolex.

Even better, large pharmacy benefits manager (PBM) Express Scripts included Epidiolex as a preferred brand on its national formulary with no prior authorization requirement for 22 million of its over 30 million covered lives. More than 90% of fee-for-service Medicaid plans and 80% of Managed Medicaid plans have also covered Epidiolex. 

5. The price is right

This wasn't new information, but Gover reminded his audience at the J.P. Morgan conference that GW priced Epidiolex at a projected average price of $32,500. Will there be sticker shock? Not based on the initial payer reaction.

Remember, too, that current LGS drug Banzel costs around $32,000 per year. Epidiolex's price tag is comparable and isn't likely to be problematic. 

6. European approvals could be just around the corner

While all of the attention right now is on the U.S. launch of Epidiolex, another big market could open up very soon. Gover said that GW hopes to receive European approval in the first quarter of 2019. Assuming the biotech receives the green light, it will market its drug under the brand name Epidyolex this year in France, Germany, Italy, Spain, and the United Kingdom. More countries will be added to the list in 2020.

GW Pharmaceuticals is already laying the groundwork for a European launch, according to Gover. He said that "extensive pricing and reimbursement work" has been completed. Gover added that other commercialization ramp-up efforts are also under way.

7. More indications could be on the way

Approvals in Dravet syndrome and LGS could just be the beginning for Epidiolex. Gover mentioned two additional indications that GW hopes to secure for its lead drug: tuberous sclerosis complex (TSC) and Rett syndrome.

GW expects to report data from a pivotal phase 3 study evaluating Epidiolex in TSC in the first half of 2019. If those results are positive, the company plans to file for approval in the indication in the second half of the year. Around 25,000 epilepsy patients are affected by treatment-resistant seizures associated with TSC. 

Gover also stated that GW plans to initiate a pivotal phase 3 study for Epidiolex in treating Rett syndrome in the second quarter of this year. There are currently no FDA-approved treatments for the rare neurodevelopment disorder.

A winner?

Obviously, Gover has ample motivation to present the prospects for Epidiolex in the most positive way he can. That's his job. But I don't think his presentation was just fluff. 

Market research company EvaluatePharma (as well as other analysts) think that Epidiolex has blockbuster potential. My view is that Gover's points at the J.P. Morgan conference give credibility to these projections. Epidiolex should be a big winner over time.

Check out the latest GW Pharmaceuticals earnings call transcript.