You might think that GW Pharmaceuticals (GWPH) has had a lot of bad news in 2020 if you looked only at its stock performance. That isn't the case, though. The company has won key regulatory approvals and delivered solid revenue growth -- at least so far this year.
GW's growth streak was put to the test when the company announced its third-quarter results before the market opened on Tuesday. And the cannabinoid-focused drugmaker passed that test with flying colors. Here are the highlights from GW's Q3 update.
By the numbers
GW Pharmaceuticals reported revenue in the third quarter of $137.1 million, a 51% year-over-year jump. This result blew past the average analysts' estimate of $127.4 million.
The company announced a Q3 net loss of $12.2 million, or $0.03 per share, based on generally accepted accounting principles (GAAP). This reflected improvement from GW's net loss of $13.8 million, or $0.04 per share, posted in the prior-year period. It also came in much better than the consensus Wall Street estimate of a net loss of $0.83 per share.
GW ended the third quarter with cash and cash equivalents totaling $480.3 million. The drugmaker's cash stockpile stood at $536.9 million at the end of 2019.
Behind the numbers
The U.S. continues to be the primary market for Epidiolex. GW reported U.S. net product sales of the drug totaling $132.6 million compared to sales of $11 million (under the brand name Epidyolex) outside the U.S. The company stated that 85 million people in the U.S. now have either no or broad prior authorization requirements for coverage, up 47% year to date.
Lower sales outside the U.S. market were due mainly to reimbursement deals not being finalized in several European countries. Although Epidyolex won European Medicines Agency approval last year, GW has a pricing and reimbursement agreement only in the U.K. right now. The company said, though, that it's making progress in Germany, France, Italy, and Spain.
GW's bottom line improved thanks entirely to its strong revenue growth. Operating expenses soared nearly 38% year over year to $149.8 million. This increase was driven by higher research and development and selling, general, and administrative spending.
Some might think that the outlook of 2021 being a big year for the cannabis industry might boost GW Pharmaceuticals' prospects. However, the potential for changes to federal marijuana laws isn't likely to impact GW very much.
A much more important factor for GW is the adoption of Epidiolex in treating tuberous sclerosis complex (TSC). The FDA approved the drug in the TSC indication in August. GW Pharmaceuticals CEO Justin Gover said that the expanded indication "has been very well received by patients, clinicians and payers."
Another key thing to watch with the pharma stock is its late-stage study of nabiximols in treating multiple sclerosis spasticity. Gover stated that GW could file for FDA approval of the cannabinoid drug "as early as next year."