You might think that skyrocketing sales would translate to tremendous share price appreciation. But that wasn't the case for GW Pharmaceuticals (NASDAQ:GWPH) in 2019. The stock finished the year up only 7% while the S&P 500 index soared close to 29%. However, GW has gotten off to a better start in 2020 despite worries that have weighed on the overall stock market.

GW Pharmaceuticals announced its 2019 fourth-quarter and full-year results after the market closed on Tuesday. There was some good news and some bad news. Here are the three most important things to know about GW's Q4 update.

Epidiolex bottle, box, and syringes

Image source: Getty Images.

1. Better-than-expected revenue

GW Pharmaceuticals reported Q4 revenue of $109.1 million, more than 16 times higher than total revenue of $6.65 million in the prior-year period. This result topped the consensus Wall Street Q4 revenue estimate of $105.1 million and came close to hitting the most optimistic analyst's estimate of $110.8 million.

It's no surprise that CBD drug Epidiolex fueled most of GW's revenue in the fourth quarter. The company announced total net product sales of the drug of $104.5 million in Q4, up 21% from Q3 sales of $86.1 million. The rest of GW's total revenue came primarily from sales of multiple sclerosis spasticity drug Sativex.

The biotech launched Epidyolex (there's a minor difference in spelling for the drug's brand name outside the U.S.) in Germany in the fourth quarter. However, while GW's press release didn't provide details on U.S. versus international sales, most of the company's revenue growth almost certainly came from the United States.

2. A big earnings beat -- but a disappointing trend

The average estimate for analysts surveyed by Refinitiv called for GW Pharmaceuticals to report a net loss of $0.75 per share in the fourth quarter. GW's actual result was much better, with the drugmaker announcing a net loss of $24.9 million, or $0.07 per share.

GW's bottom line reflected significant improvement from the prior-year period. A year ago, the company posted a net loss of $71.9 million, or $0.20 per share. Greater sales for Epidiolex in Q4 of 2019 enabled GW to narrow its losses considerably.

However, investors could be concerned that GW didn't make progress toward achieving profitability compared to the previous sequential quarter. In Q3, the company reported a net loss of $13.8 million, or $0.04 per share.

3. Major milestones on the way

Biotech stock investors are much more focused on the future than on the past. In its Q4 update, GW Pharmaceuticals highlighted several major milestones that are on the way.

GW plans to focus heavily on lining up even more prescribers and securing greater payer coverage for Epidiolex in the U.S. in 2020. The company also intends to enter the long-term care (LTC) market this year. Outside of the U.S., GW plans to launch its CBD drug in the United Kingdom in Q1 with subsequent launches later in the year in France, Spain, and Italy.

The biggest potential catalyst for GW Pharmaceuticals in the near-term is the anticipated FDA approval decision for Epidiolex in treating tuberous sclerosis complex (TSC). The company filed for FDA approval in the new indication earlier in February and expects to complete its European filing by the end of the first quarter.

In addition to Epidiolex, GW Pharmaceuticals is advancing several other pipeline candidates. It expects to begin a phase 3 clinical study in the U.S. in the second quarter of 2020 evaluating nabiximols (marketed as Sativex outside the U.S.) in treating multiple sclerosis spasticity. Two other studies of the drug targeting spinal cord injury spasticity and post-traumatic stress disorder (PTSD) are expected to start in the second half of the year.

GW also plans to begin a phase 2b study of experimental cannabinoid GWP42003 in treating schizophrenia in the first half of 2020. Initial data from the company's open-label study of cannabidivarin (CBDV) in treating autism is expected this year as well.