Shares of GW Pharmaceuticals (GWPH) were soaring 14.2% higher as of 10:43 a.m. EST on Wednesday. The biotech reported its 2018 fourth-quarter results after the market closed on Tuesday. And those results were much better than anticipated.
GW announced Q4 revenue of $6.7 million, up nearly 68% year over year and well above the $5.35 million expected by analysts. The company's net loss of $0.20 per share also easily beat the Wall Street consensus estimate of a net loss of $2.90 per share.
The big story for GW Pharmaceuticals in the fourth quarter was a great U.S. launch for cannabis-based drug Epidiolex. GW reported Q4 sales of the drug were $4.7 million. Many analysts were anticipating sales of closer to $3 million.
There were several factors behind the successful launch of Epidiolex. GW Pharmaceuticals' team paved the way by reaching out to around 70% of targeted physicians in the U.S. The company also won over many payers in advance of the launch. GW said that Epidiolex is now covered for over 80% of Americans with commercial insurance, 99% of fee-for-service Medicaid members, and around 90% of individuals on Managed Medicaid.
Of course, it was also important that there remains a significant unmet medical need for patients with Dravet syndrome and Lennox-Gastaut syndrome (LGS), the two rare forms of epilepsy for which Epidiolex is currently approved. Because of this unmet medical need, there was some pent-up demand for a new treatment.
GW Pharmaceuticals' president of North America, Julian Gangolli, noted in the company's Q4 conference call that there have been many reports from physicians and caregivers about the difference that Epidiolex is making in reducing seizures. This underscores what is perhaps the biggest reason for Epidiolex's early success: It's effective in helping patients.
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GW Pharmaceuticals should enjoy continued momentum for Epidiolex in 2019. The company's efforts in securing payer coverage and establishing relationships with physicians are likely to keep paying off down the road.
So far, GW's primary focus has been on the U.S. However, the biotech expects a key recommendation for the drug in Europe in the second quarter. GW Pharmaceuticals' team is readying for an initial launch in five key European markets later this year.
There could also be additional indications for Epidiolex on the way. GW expects to announce results from a phase 3 clinical trial of the drug in treating tuberous sclerosis complex (TSC) in the second quarter with a potential regulatory filing in late 2019. The biotech also plans to begin another pivotal phase 3 study evaluating Epidiolex in treating Rett syndrome in Q2.
This week's good news for GW Pharmaceuticals could be just the beginning.