More MS news articles for June 2001

GW rolls up

http://www.uk-invest.com/news/issues.html

June 14, 2001
By Stephen Pritchard, UK-iNvest.com

Supporters of legalising cannabis have long argued that the herb harbours medical benefits, including aids for sufferers of cancer and glaucoma. Now a number of companies are planning ways to make money while the grass grows.

One of these, GW Pharmaceutical, is developing a range of medicines that use cannabinoids, the active ingredient of cannabis, as their base. The company hopes that doctors will be able to prescribe these drugs as treatments for multiple sclerosis, cancer pain and rheumatoid arthritis.

The company is now seeking a listing on AIM and hopes to raise £16m before costs. The offer will value the company at between £140m and £170m, with trading expected to start on June 28.

The money will go to fund Phase III clinical trials, the final step in the medicines approvals process. GW will also use the money to set up production facilities. The multiple sclerosis drugs look set to be first to go on sale. GW expects to apply for approval to the government's Medicines Control Agency in 2003, with first sales expected in 2004.

Age-old treatment

Cannabis has been used as a therapeutic drug -- legally and illegally -- for hundreds of years. According to GW's directors, this should work to the company's advantage. "The long history of medicinal use of cannabis means that the development of cannabis-based medicines holds a greater certainty of success than many other biopharmaceutical programmes," they say.

The UK government has said it will not object to cannabis-based medicines, as long as they gain approval in the usual way. The US authorities take a similar view.

Clearly, this stops a long way short of prescribing cannabis itself. Instead, GW will be making its treatments from a standardised extract from specially-bred cannabis plants. The drugs will be available as tablets, sprays and an inhaler. There are many precedents for making legal drugs from an otherwise illegal substance: opiates, as one example, are widely used as the basis for painkillers.

The company will have a large market for its drugs if trials are successful: the number of MS sufferers alone is put at 2.5 million (according to GW). GW plans to expand into other sectors, such as treatments for migraine, schizophrenia and epilepsy.

Cultivating a market

The development process does contain risks for GW, however. As well as the usual uncertainties that surround any clinical trial programme, there is the issue of social acceptability for cannabis-derived treatments.

Then there is the issue of supply. To meet demand, GW will have to ensure that enough of the right varieties of cannabis plants are cultivated, and at the right quality. Needless to say, the cultivation, processing and supply of the drug raise security issues. But if the company can produce drugs which avoid the side effects of many current treatments, it should have the basis for a successful business.

Pricing for shares in GW Pharmaceuticals will be set on June 21. Collins Stewart is handling the placing, which is being aimed at institutional investors.
 

Stephen Pritchard is UK-iNvest.com's broadcast editor.