What happened

GW Pharmaceuticals (NASDAQ:GWPH) stock rocketed 77% higher in the first half of 2019 (January through June), according to data from S&P Global Market Intelligence. It was flat during the holiday-shortened first week of July, so its year-to-date 2019 gain is also about 77%.

For context, the S&P 500 index returned 18.5% in the first six months of the year, and has returned 20.6% so far this year through July 5.

The British biopharmaceutical company develops prescription drugs derived from cannabinoids, chemical substances found in marijuana.  

Overhead view of various types of pills lying on a surface with a marijuana leaf over them and three pill bottles lying on their sides adjacent to the pills.

Image source: Getty Images.

So what

GW Pharmaceuticals stock's year-to-date gain came in the first two months of the year, as shares were up 76.6% over this period. They've mostly traded in a moderately tight trading range since then. 

In January, shares surged more than 46%, though there didn't appear to be any specific news to account for this big gain. As I previously wrote:

We can probably attribute the stock's strong performance [in January] largely to the enthusiasm surrounding the overall cannabis sector. Nearly all cannabis stocks soared in January, with Canadian grower Canopy Growth, the largest cannabis stock by market cap, skyrocketing 82.3%. 

In February, shares came back for an encore, rising nearly 21%. The catalyst was GW Pharmaceuticals' release of fourth-quarter results that were better than anticipated. Revenue leaped 68% year over year to $6.7 million, beating the $5.35 million Wall Street was expecting. Net loss of $0.20 per share was flat with the year-ago period, though it crushed the consensus estimate, which was for a loss of $2.90 per share.

The better-than-expected results were driven by the company's strong U.S. launch for its cannabis-based drug Epidiolex. "For the two months in Q4 that the drug was available in the U.S., sales tallied $4.7 million. Analysts were widely anticipating sales of about $3 million," wrote my colleague Keith Speights. 

Epidiolex launched in the U.S. on Nov. 1 after receiving approval from the U.S. Food and Drug Administration in June to treat patients with two rare forms of epilepsy. It's the first drug derived from the cannabis plant (specifically from cannabidiol, or CBD) that's received the green light from the FDA.

In May, GW reported first-quarter 2019 results that showed strong sales momentum. Revenue came in at $39.2 million, including $33.5 million in Epidiolex net product sales in the U.S. -- much higher than the $16.6 million analysts were expecting. 

Now what

As I've previously opined, "GW stock's direction for the next couple years will likely highly depend upon how well Epidiolex is selling, so this is the key thing investors should focus on in fiscal 2019. Pipeline progress is also important."

GW has several catalysts for growth on the horizon, with the most immediate one being that it could receive approval to market Epidiolex in the European Union. News on this front could come anytime now.