GW Pharmaceuticals: A different kind of marijuana company

Unlike its peers in the cannabis industry, most of which are penny stocks that trade on barely regulated markets, GW Pharmaceuticals Plc is listed on the Nasdaq and closed at $59.49 (U.S.) at press time, giving it a market value of nearly $900-million. The company's website lists seven brokerage analysts who cover the stock, compared with zero for most marijuana-related stocks. It files audited financial statements and includes major institutions among its shareholders, a rarity.

GW, which trades under the stock ticker GWPH, has developed a prescription medicine derived from cannabis. Regulators in 25 countries have approved its main product, Sativex, to relieve stiffness and spasms from multiple sclerosis, and the drug is on sale in 12 of them.

The stock has more than tripled in the past five months on speculation Sativex and the developmental drug Epidiolex for treatment of epilepsy symptoms will be authorized for a widening array of ailments.

"GWPH is the leader in cannabinoid science," Joshua Schimmer, an analyst at Piper Jaffray Cos., said in a report in November. "We believe GWPH is poised for success as a company and an investment opportunity as its clinical and commercial candidates advance."

Based in Salisbury, England, southwest of London, GW says its differences from other companies in the industry are so big that it doesn't even belong in the same group.

"I don't think we see ourselves as a medical-marijuana company," said GW chief executive officer Justin Gover. "We are classified by investors as a biotech company."

Sativex is in late-stage clinical trials in the United States, the world's largest pharmaceutical market, to ease pain from cancer treatments. This month, Mr. Schimmer raised his price estimate on the shares to $97 from $77, citing the prospects of Epidiolex for patients suffering from seizures, migraines and autism. Epidiolex, which has shown promising early results with children, is designed to relieve pain without psychoactive side effects.

"2014 could be transformative for GW as its pipeline delivers important clinical milestones," Mike Aitkenhead and fellow analysts at London-based Edison Group said in a Dec. 9 report.