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January 16 2002 18:10
By David Firn in London
 
GW Pharmaceuticals, the first company to produce cannabis for use in medicines, has started the final round of clinical trials of a treatment for cancer pain.

The company, which reported widening losses on Wednesday, said it was on track to launch the product in 2004 after expanding its multiple sclerosis trials to include cancer patients.

About 100 patients will take place in the trial. The company is also waiting for permission to start a phase III trial in spinal injury patients.

Geoffrey Guy, executive chairman, said recently completed phase II trials - the halfway point in development - showed cannabis worked. "Now we can say we have positive results that ar e statistically valid rather than just encouraging."

Mr Guy said GW had turned down approaches from larger pharmaceutical companies interested in marketing the drugs. It intends to wait until the trials are completed in order to strike a better deal.

Cannabis is widely used by multiple sclerosis patients, because it helps control the pain caused by the nerve wasting disease better than conventional painkillers. Official data sugge st that about 5 per cent of MS patients use cannabis, but some doctors say the figure is as high as 30 per cent.

GW, which raised £23.5m ($33.8m) in an Aim listing last year, has developed a spray to deliver precise doses of blended cannabis extracts under the tongue.

Aficionados of the five-leaved herb might be interested to know that Moroccan varieties are more useful than American plants.

Losses for the year to September 30 were £2.3m (£7.2m losses) as R&D spending rose from £2m to £6.64m. The loss per share was 9p (4.2p loss). The shares fell 1p to 114p.

Comment

Shares in GW Pharmaceuticals have lost about 40 per cent of their value since floating at 182p, although they have recovered from a low of 67p in September. The completion of phase II trials means the company now has statistical proof that the drugs do work. Most biotech companies license their products out at this point, but GW has enough cash to go all the way to phase III trials.

That should mean better royalty rates, but it is a high-risk strategy. GW is built around a single drug. If phase III trials fail to prove cannabis is better than existing painkillers, GW's dreams will have gone up in smoke.
 

© Copyright The Financial Times Limited 2001