We last looked at GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) at the end of October, just ahead of the peak of the frenzy surrounding the recreational marijuana space. A few weeks after we highlighted he company as one to watch. A bunch of US states would vote YES to recreational legalization, and the sector would take off.At that time, we knew this was about to happen (well, we were pretty sure it would, and we were proven correct) but we weren’t just looking at the speculative runners. We wanted to find a company with ties to the space that offered a risk limited exposure to the industry growth, and GW was that company.Our conclusion was that this company wasn’t your standard cannabis microcap, and its depth of operations limited the downside potential of an exposure. On the long side, we noted that the same feature, the company's operational activities (and in particular, its development pipeline), served up some considerable upside potential.At the time of our coverage, GW went for around $116 a share. The company currently trades for $130. That's a 13% run, but we think GW is far from done. The company just put out some data from a phase II proof of concept trial in brain cancer, and in doing so, has paved the way for a raft of other cannabinoid potential applications in oncology and further afield.Looking at the latest numbers, they derive from a placebo controlled study that compared focused on survival time frames for patients with a type of brain cancer called glioblastoma multiforme (a particularly aggressive, and the most common type of brain cancer). The study compared patients with GBM who received standard of care chemo with patients who received a combination of standard of care and GW's drug, a proprietary combination of tetrahydrocannabinol (THC) and cannabidiol (CBD). The results were better than even GW expected. The study showed that patients treated with the combination had an 83% one-year survival rate compared with 53% for patients in the placebo (standard of care) cohort (p=0.042). Further, median survival for the combination group was greater than 550 days compared with 369 days in the placebo group. That's a nearly 50% improvement in median survival. Two patients in each group discontinued the study, meaning the safety profile of the active arm was comparable to that of control, and the most common adverse events were things like nausea, vomiting, dizziness – things that really aren’t much of a surprise in patients undergoing treatment for something like GBM.GBM, of course, isn’t the only value driver for the company. In fact, it's pretty far down on the list. The real attraction is rooted in GW's flagship treatments, which have already proven efficacy in a number of different types of severe pediatric epilepsy and multiple sclerosis. We expect these to hit commercialization status at some point this year, and the company to start collecting revenues on its portfolio (epilepsy in particular) near term.So what's next?Well, as we said last time, there are a number of pathways for this one that could realize considerable value. The first is the go it alone approach – one in which GW funds its own development pipeline to maturity and starts to bring in the sales on its own. It's perfectly capable of doing this, but may have to dilute shareholders at some point to bring the applications home. As such, a second (and probably more attractive) pathway is one of partnership and shared development costs/royalties. We expect this latter approach on the GBM platform at least; the epilepsy program is pretty advanced now, and GW may decide to just run the last stretch single handedly so as to avoid having to share the dollars generated from the drugs hitting the shelves.We will be updating our subscribers as soon as we know more. For the latest updates on GWPH, sign up below!Disclosure: We have no position in GWPH and have not been compensated for this article.
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