What happened
Investors were not happy with the Q2 fiscal 2020 results published by GW Pharmaceuticals (GWPH), a company that develops and markets cannabidiol (CBD)-based drugs and is therefore considered a marijuana stock. Those results, published after market close on Thursday, brought up several concerns about the company's operations, and helped drive the stock down by over 17% the following day.
So what
For the quarter, GW Pharmaceuticals booked total revenue of $121.3 million, nearly all of it derived from sales of Epidiolex, a treatment for seizures in patients suffering from three relatively rare disorders. That top-line figure was 68% higher on a year-over-year basis.
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Digging deeper into the numbers, however, shows that Epidiolex sales of $117.7 million were only marginally higher than the Q1 result of $116.1 million.
Another negative for GW Pharmaceuticals' Q2 is that it flipped to a loss on the bottom line. This was $8.8 million, compared to the profit of $79.7 million in the year-ago quarter (although the latter was due to the company accounting for over $104 million in proceeds from the sale of a Rare Pediatric Priority Review Voucher).
Now what
GW Pharmaceuticals had been a relatively well-liked marijuana stock because of the potential of Epidiolex, so the sluggish quarter-over-quarter growth in its sales is worrying. And although the Food and Drug Administration approved Epidiolex for a new indication earlier this week, investors might be concerned that this won't move the needle much on those sales.
