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RNS Number : 3523O
GW Pharmaceuticals PLC
06 August 2014
GW Pharmaceuticals plc Reports 2014 Third Quarter Financial
Results
-Conference Call Today at 8:00 a.m. ET, 1:00 p.m. BST-
London, UK, 6 August 2014: GW Pharmaceuticals plc (NASDAQ: GWPH,
AIM: GWP, "GW," "the Company" or "the Group"), a biopharmaceutical
company focused on discovering, developing and commercializing
novel therapeutics from its proprietary cannabinoid product
platform, announces financial results for the third quarter and
nine months ended 30 June 2014.
RECENT OPERATIONAL HIGHLIGHTS
-- Follow-on offering of American Depositary Shares ("ADSs") on
the NASDAQ Global Market closed in June 2014 raising total net
proceeds after expenses of approximately $118 million (GBP69.5
million)
-- Advancement of Epidiolex(R) (Cannabidiol or CBD) childhood epilepsy program:
o U.S. Food and Drug Administration (FDA) Authorized
Physician-Led Expanded Access Program
-- Treatment effect data on initial patient cohort released in
June 2014 with data showing promising signals of efficacy and
safety
-- Number of children suffering from intractable epilepsy
syndromes authorized for treatment with Epidiolex by FDA increased
to approximately 395
-- Approximately 100 children now receiving treatment with
Epidiolex in the U.S. at six hospital sites
-- Treatment data on additional cohort of patients to be
released H2 2014
o Dravet syndrome development program
-- Orphan Drug Designation, Fast Track Designation granted and
Investigational New Drug Application (IND) opened with the FDA for
Epidiolex in the treatment of Dravet Syndrome
-- Phase 2/3 Dravet syndrome trial protocol finalized and on
track to commence H2 2014
-- Additional Phase 3 Dravet syndrome trial on track to commence
early 2015
o Lennox-Gastaut syndrome (LGS) development program
-- Orphan Drug Designation granted by FDA in the treatment of
LGS
-- FDA comments received on proposed Phase 3 trial protocols
-- Phase 3 trials on track to commence early 2015
o State Programs
-- Initiatives announced with States of Georgia and New York to
collaborate with GW on state-based Epidiolex clinical trials in
epilepsy
-- Sativex(R) program developments:
o Fast Track designation granted by FDA for Sativex in the
treatment of chronic cancer pain in patients with advanced cancer
who have failed to respond adequately to optimized opioid
therapy
o Initial top-line Phase 3 cancer pain data on track for release
towards the end of 2014. Data intended to lead to a New Drug
Application (NDA) filing with the FDA in the U.S.
o Special Protocol Assessment (SPA) ongoing with the FDA for
proposed Sativex Phase 3 trial in the treatment of Multiple
Sclerosis (MS) spasticity
-- Significant additional on-going clinical trial activity for
cannabinoid pipeline product candidates:
o Advancement of Cannabidivarin (CBDV) epilepsy program with a
Phase 2 trial expected to commence at end of 2014/early 2015
o Phase 2a trial of GWP42003 for the treatment of ulcerative
colitis recruitment complete - data expected H2 2014
o Phase 2b 12-week randomized, double blind, placebo controlled
trial of GWP42004 in type-2 diabetes commenced in March 2014 with
expected completion in H2 2015
o Phase 2a trial of GWP42003 for the treatment of schizophrenia
commenced in March 2014 with expected completion in H2 2015
o Phase 1b/2a trial of GWP42002:GWP42003 in the treatment of
glioma ongoing with safety data on an initial cohort due in
2014
FINANCIAL HIGHLIGHTS
-- Revenue for the three months ended 30 June 2014 of GBP7.6
million ($13.0 million) compared to GBP7.3 million for the three
months ended 30 June 2013
-- Loss for the three months ended 30 June 2014 of GBP6.9
million ($11.9 million) compared to a loss of GBP2.0 million for
the three months ended 30 June 2013. The increased loss primarily
reflects the planned increase in GW funded R&D in order to fund
the development of Epidiolex and other pipeline candidates
-- Cash and cash equivalents at 30 June 2014 of GBP168.3 million
($287.8 million) compared to GBP38.1 million as at 30 September
2013
"During the third quarter GW announced important initial data on
Epidiolex which provides promising signals of efficacy in children
with treatment-resistant epilepsy, including patients with Dravet
syndrome. Our preparations for Phase 3 clinical trials in both
Dravet and Lennox-Gastaut syndromes are advancing rapidly and we
look forward to the start of the first pivotal placebo-controlled
trial in the second half of this year. The funds raised this
quarter in the follow-on offering will not only allow GW to
complete these development programs but also to commence pre-launch
activities in the United States and build-up of inventory in
readiness for future launch," stated Justin Gover, GW's Chief
Executive Officer. "In parallel with GW's Epidiolex program, we are
also progressing towards the conclusion of our U.S. Phase 3 cancer
pain trials for Sativex and look forward to reporting initial
top-line data from the first trial around the end of 2014. Finally,
we continue to make strong progress across our cannabinoid
pipeline, which continues to yield interesting new product
candidates in a wide variety of therapeutic areas."
Conference Call and Webcast Information
GW Pharmaceuticals will host a conference call and webcast to
discuss the 2014 third quarter financial results today at 8:00 a.m.
ET / 1:00 p.m. BST. To participate in the conference call, please
dial 877-407-8133 (toll free from the U.S. and Canada), or
0800-756-3429 (toll free from the UK) or 201-689-8040
(international). Investors may also access a live audio webcast of
the call via the investor relations section of the Company's
website at http://www.gwpharm.com. A replay of the call will also
be available through the GW website shortly after the call and will
remain available for 30 days. Replay Numbers: (toll
free):1-877-660-6853, (international):1-201-612-7415. For both
dial-in numbers please use conference ID #13588034.
Investor R&D Day and Conference Activity
GW Pharmaceuticals anticipates hosting a research and
development day in New York City on 14 October. Further details
will be forthcoming nearer the date. In addition, GW expects to
present at the following bank-sponsored investor conferences:
Goldman Sachs Biotech Symposium in London on 5 September, Morgan
Stanley Global Healthcare Conference in New York City on 8-9
September and the Bank of America Merrill Lynch Global Healthcare
Conference in London on 17 September.
Enquiries:
GW Pharmaceuticals plc (Today) + 44 20 3727 1000
Justin Gover, Chief Executive Officer (Thereafter) + 44 1980
557000
Stephen Schultz, VP Investor Relations 917 280 2424 / 401 500
(U.S.) 6570
FTI Consulting (Media Enquiries)
Ben Atwell / Simon Conway / John Dineen
(UK) + 44 20 3727 1000
Robert Stanislaro (U.S.) 212 850 5657
Trout Group, LLC (U.S. investor relations)
Todd James / Chad Rubin 646 378 2900
Peel Hunt LLP (UK NOMAD) + 44 20 7418 8900
James Steel / Clare Terlouw
GW Pharmaceuticals plc
("GW" or "the Company" or "the Group")
2014 Third Quarter Financial Results
OPERATIONAL OVERVIEW
GW Overview
GW is a biopharmaceutical company focused on discovering,
developing and commercializing novel therapeutics from its
proprietary cannabinoid product platform in a broad range of
disease areas. In 15 years of operations, GW has established a
world leading position in the development of plant-derived
cannabinoid therapeutics through its proven drug discovery and
development platform, a robust intellectual property portfolio and
its regulatory and manufacturing expertise.
GW commercialized the world's first plant-derived cannabinoid
prescription drug, Sativex(R) , which is approved for the treatment
of spasticity due to multiple sclerosis (MS) in 26 countries
outside the United States (U.S.). GW is also evaluating Sativex in
a Phase 3 program for the treatment of cancer pain intended to
support the submission of a New Drug Application (NDA) for Sativex
in cancer pain with the U.S. Food and Drug Administration (FDA) and
in other markets around the world. Additionally, GW believes that
MS spasticity represents an attractive indication for Sativex in
the U.S. and is now advancing plans to conduct a U.S. Phase 3
clinical trial in this indication.
Beyond Sativex, GW is advancing an orphan drug program in the
field of childhood epilepsy with a particular focus on Epidiolex(R)
, a liquid formulation of pure plant-derived Cannabidiol (CBD)
which has received Fast Track Designation from the FDA for Dravet
syndrome as well as Orphan Drug Designations from the FDA in both
the treatment of Dravet syndrome and Lennox-Gastaut syndrome (LGS),
each of which represent severe, drug-resistant orphan epilepsy
syndromes. GW has opened an Investigational New Drug Application
(IND) with the FDA and expects to commence a Phase 2/3 study of
patients with Dravet syndrome in the second half of 2014.
In addition, GW's cannabinoid platform offers a deep pipeline of
additional product candidates including distinct clinical-stage
candidates targeting ulcerative colitis, type-2 diabetes,
schizophrenia, and glioma (orphan indication).
U.S. Follow-on Offering
In June 2014, GW successfully completed a U.S. follow-on
offering on the NASDAQ Global Market issuing a total of 1,455,000
American Depositary Shares ("ADSs") at a price of $86.83 per ADS.
Total net proceeds after expenses were approximately $118 million
(GBP69.5 million). The funds raised in this offering are primarily
intended to fund pre-launch activities for Epidiolex in the United
States, the expansion of Epidiolex growing and manufacturing
capability and build-up of inventory in preparation for launch of
Epidiolex, if approved. GW also expects to use the funds toward the
advancement of other early stage pipeline opportunities, with a
particular focus on orphan diseases. In addition to the primary
ADSs issued by the Company, the offering included 500,000 ADSs sold
by certain selling shareholders.
Epilepsy Drug Development Programs
GW is developing Epidiolex, a liquid formulation of a pure
plant-derived CBD, as a treatment for severe, drug-resistant
childhood epilepsy. GW has conducted extensive pre-clinical
research of CBD in epilepsy and has reported significant
anti-epileptiform and anticonvulsant activity using a variety of in
vitro and in vivo models. This research has shown the ability of
CBD to treat seizures in acute animal models of epilepsy with
significantly fewer side effects than existing anti-epileptic
drugs. GW is also developing GWP42006, which features the
non-psychoactive cannabinoid cannabidivarin (CBDV). CBDV has
similarly shown highly promising results in pre-clinical models of
epilepsy. Combined, these two epilepsy programs represent important
product candidates within GW's epilepsy franchise that have the
potential to yield a variety of individual orphan indications
providing GW with significant new market opportunities. These
development programs are funded completely by GW and GW retains all
rights to commercialize any and all products that evolve from these
programs.
The rapid progress of GW's Epidiolex development and regulatory
activities derive from GW's 15 years' experience in manufacturing
and conducting research into CBD. GW has extensive proprietary
pre-clinical pharmacology and toxicology data, as well as a
substantial clinical safety database, all of which have been
important data requirements in order to advance both the
FDA-authorized expanded access INDs as well as the first commercial
IND.
Company-Sponsored Development Programs
GW's initial focus is on conducting formal development programs
for Epidiolex in the treatment of both Dravet syndrome and LGS. The
Company has received from the FDA Orphan Drug Designations for
Epidiolex for both Dravet syndrome and LGS, as well as Fast Track
Designation for Dravet syndrome.
GW held a pre-IND meeting with the FDA in February 2014 to
discuss the investigational plan for Epidiolex in Dravet syndrome,
following which the Company opened a commercial IND in May 2014.
The protocol for the first Phase 2/3 Dravet syndrome clinical trial
is now finalized, sites have been selected, and the trial is on
track to commence in the second half of 2014. An additional Phase 3
Dravet syndrome clinical trial is expected to commence in early
2015.
The first Phase 2/3 trial is designed as a two-part randomized
double-blind, placebo-controlled parallel group dose escalation,
safety, tolerability, pharmacokinetic and efficacy trial of single
and multiple doses of Epidiolex to treat Dravet syndrome in
children who are being treated with other anti-epileptic drugs.
Part one comprises the pharmacokinetic and dose-finding elements of
the trial in a total of 30 patients over a three week treatment
period. Part two is a placebo-controlled safety and efficacy
evaluation of Epidiolex over a three month treatment period in a
total of 80 patients.
In addition to Dravet syndrome, in March 2014, GW received
Orphan Drug Designation from the FDA for Epidiolex for the
treatment of LGS. GW has received written responses from the FDA to
a pre-IND meeting request, and clinical trial protocols are now
being finalized. GW expects to commence two Phase 3 trials in LGS
in the first quarter of 2015.
Expanded Access IND Program
In parallel with GW's commercial clinical trials program, the
FDA has been receiving and approving INDs from independent
investigators in the U.S. to allow treatment to commence with
Epidiolex in children with a range of epilepsy syndromes. To date,
the FDA has approved treatment under Expanded Access INDs for
approximately 395 children at approximately 17 U.S. hospital sites.
The patients in these INDs suffer not only from Dravet syndrome and
LGS, but also from other pediatric epilepsy syndromes. To date, six
hospital sites have cleared all necessary DEA licensing, and have
started enrolling patients. To date, a total of approximately 100
patients have commenced treatment with Epidiolex, an increase from
60 patients reported in May 2014. The timing of commencement of
treatment at FDA-approved sites is dependent on receipt of
necessary controlled drug licences from the Drug Enforcement
Administration (DEA), a process which can take several months.
In total, there are 25 INDs open with the FDA. This includes six
individual emergency treatment INDs. In such cases, GW has
responded to, and the FDA has approved, emergency treatment
requests from physicians in respect of six children hospitalized as
a result of severe and potentially life-threatening seizures. So
far as GW is aware, all six children remain on Epidiolex
treatment.
In addition to Company and physician-led activities, two U.S.
state governments (Georgia and New York) have publicly announced
interest in collaborating with GW on separate state-based clinical
trials in epilepsy. These discussions are progressing.
Expanded Access Program Initial Data
In June 2014, 12-week treatment data on 27 patients as well as
safety data from an additional 35 patients from these INDs were
made available to GW from the physicians conducting these studies.
These INDs contain no control or comparator group for reference and
these patient data are not designed to be aggregated or reported as
study results, hence the data reported may not be indicative of
results from, or duplicated in, placebo-controlled
company-sponsored clinical trials.
Treatment effect data on the 27 patients was assessed in a
manner consistent with the FDA's recommended endpoint for
evaluating efficacy in epilepsy trials, which compares the percent
change in the average four week seizure frequency throughout the
12-week treatment period to seizure frequency during a four week
baseline period. Patients comprise a broad range of
treatment-resistant epilepsies with convulsive and/or
non-convulsive seizures. The average age was 10.5 years and 26 of
the 27 patients were between three to 18 years of age and one
patient was 26 years of age. In all cases, Epidiolex was added to
current anti-epileptic drugs (AEDs). On average, patients were
taking 2.7 other AEDs.
The following changes in seizure frequency (convulsive and
non-convulsive seizures) were reported:
-- Mean overall reduction in seizure frequency compared to
baseline seizure frequency was 44% and the median overall reduction
in seizure frequency compared to baseline seizure frequency was
42%;
-- 48% of all patients obtained at least a 50% reduction in
seizure frequency as compared to baseline seizure frequency;
-- 41% of all patients obtained at least a 70% reduction in
seizure frequency as compared to baseline seizure frequency;
-- 22% of all patients obtained at least a 90% reduction in
seizure frequency as compared to baseline seizure frequency;
-- During the last four weeks of treatment (weeks eight to 12),
15% of all patients were seizure-free.
Of the 27 patients, the largest single type of epilepsy was
Dravet syndrome (n=9). For the patients with Dravet syndrome, the
following changes in convulsive seizure frequency, the only types
of seizures considered by the FDA in assessing primary efficacy for
Dravet syndrome trials, were reported:
-- Mean reduction in seizure frequency as compared to baseline
seizure frequency was 52% and median reduction in seizure frequency
compared to baseline seizure frequency was 63%;
-- 56% of Dravet syndrome patients obtained at least a 50%
reduction in seizure frequency as compared to baseline seizure
frequency;
-- 44% of Dravet syndrome patients obtained at least a 70%
reduction in seizure frequency as compared to baseline seizure
frequency;
-- 33% of Dravet syndrome patients obtained at least a 90%
reduction in seizure frequency as compared to baseline seizure
frequency;
-- During the last four weeks of treatment (weeks eight to 12),
33% of Dravet patients were seizure-free.
In addition to data on clinical effect, safety data was
presented on a total of 62 patients (27 patients with 12 weeks of
treatment with Epidiolex as well as 35 additional patients who have
commenced treatment with Epidiolex but have yet to reach 12 weeks
of treatment). In total, this patient group represents
approximately 120 patient-months of treatment with Epidiolex. At
least one adverse event was reported in 81% of patients. The most
common adverse events (occurring in 10% or more patients and
resulting from all causes) were: somnolence (40% of patients),
fatigue (26% of patients), diarrhea (16% of patients), decreased
appetite (11% of patients) and increased appetite (10% of
patients). Of the reported adverse events, 80% were mild or
moderate. In this data-set, there were no withdrawals from
treatment due to adverse events, although there was one withdrawal
due to lack of clinical effect and an additional two patients were
being gradually withdrawn from treatment after 12 weeks due to lack
of clinical effect. Serious adverse events were reported in seven
patients, including death of a patient from SUDEP (sudden
unexpected death in epilepsy). None of these serious adverse
events, including the one reported death, were deemed related to
Epidiolex by the independent investigators. In some instances, the
addition of Epidiolex may be associated with
changes in serum concentrations of concomitant AEDs.
Following this initial disclosure, GW expects additional data on
these patients as well as data on additional IND patients to follow
during the second half of 2014 and beyond, and will periodically
provide status updates through public disclosure.
CBDV Development Program
In addition to Epidiolex, GW has completed a Phase 1 trial in 66
healthy subjects of epilepsy product candidate GWP42006 (CBDV). In
this trial CBDV was well tolerated even at the highest tested dose.
There were no serious or severe adverse events, nor any withdrawals
due to adverse events. GW expects to commence a Phase 2 trial of
CBDV in patients with epilepsy around the end of 2014, or early
2015.
In March 2014, the Intellectual Property Office in the United
Kingdom granted a patent for the use of CBDV in the treatment of
epilepsy (patent number GB2479153B) which covers the use of CBDV
alone or in combination with standard anti-epileptic drugs or in
combination with other cannabinoids, and provides an exclusivity
period until 30 March 2030. This same patent is currently in
prosecution with the United States Patent and Trademark Office.
Sativex in Cancer Pain
Sativex is an oromucosal spray consisting of a formulated
extract of the cannabis sativa plant that contains the principal
cannabinoids delta-9-tetrahydrocannabinol, or THC, and CBD. GW is
currently evaluating Sativex in a Phase 3 program to treat
persistent pain in people with advanced cancer who experience
inadequate pain relief from optimized chronic opioid therapy, the
current standard of care.
Pain is uncontrolled with opioid treatments in approximately 20%
of patients with advanced cancer, or 420,000 people in the U.S.
There are currently no approved non-opioid treatments for patients
who do not respond to, or experience negative side effects with,
opioid medications. GW believes that Sativex has the potential to
address a significant unmet need in this large market by treating
patients with a product that employs a differentiated non-opioid
mechanism of action, and offers the prospect of pain relief without
increasing opioid-related adverse side effects.
This program represents the lead target indication for Sativex
in the U.S. and is being conducted under an IND consisting of three
Phase 3 clinical trials, the first two of which are expected to
enrol 760 patients in total and are intended to support the
submission of an NDA with the FDA and in other markets around the
world. Consistent with previous guidance, GW anticipates that
initial results from at least one of the Phase 3 trials will be
available around the end of 2014 with top-line results from the
second Phase 3 trial following shortly thereafter.
In April 2014, Sativex received Fast Track designation by the
FDA. The FDA's Fast Track program is designed to facilitate the
development of drugs that have demonstrated potential to treat
diseases that are serious, life threatening, and for which there is
an unmet medical need. Fast Track provides a number of benefits,
including the ability to meet and communicate more frequently with
the FDA to discuss drug development plans, as well as eligibility
for accelerated approval.
The costs of the Phase 3 cancer pain program are fully funded by
Otsuka Pharmaceutical Co. Ltd (Otsuka), who hold exclusive rights
to commercialize Sativex in the U.S.
Sativex in Multiple Sclerosis (MS)
MS affects 1.3 million people worldwide, of which up to 80%
suffer from spasticity, a symptom of MS characterized by muscle
stiffness and uncontrollable spasms. There is no cure for such
spasticity and it is widely recognized that pre-Sativex available
oral treatments afford only partial relief and have unpleasant side
effects.
Sativex is currently approved as a treatment for MS spasticity
in 26 countries and is currently commercially available for the
treatment of MS spasticity in 14 countries outside the United
States. GW has also received regulatory approval for Sativex for MS
spasticity in 12 additional countries, and the Company anticipates
commercial launches in several of these countries in the next 12
months.
GW believes that MS spasticity represents an attractive
indication for Sativex in the U.S. and has opened a Phase 3 IND
with the FDA to conduct a pivotal Phase 3 trial to evaluate Sativex
for the treatment of MS spasticity. GW has submitted a request to
the FDA for Special Protocol Assessment ("SPA") for the proposed
U.S. Phase 3 trial and this process is ongoing. Subject to
successful completion of this process, the trial is expected to
commence in early 2015.
Other Cannabinoid Platform Pipeline Programs
Ulcerative Colitis
Ulcerative colitis, or UC, is a chronic, relapsing inflammatory
disease affecting the colon which can cause pain, urgent diarrhea,
severe tiredness and loss of weight. In addition, patients with
chronic intestinal inflammation have an increased risk of
developing bowel cancers. According to the Crohn's & Colitis
Foundation of America, UC may affect as many as 700,000 Americans.
The four major classes of medication used today to treat ulcerative
colitis are aminosalicylates (5-ASA), steroids, immune modifiers
and antibiotics.
GW has now completed recruitment into a 10-week randomized,
double-blind, placebo controlled Phase 2a study of GWP42003
extract, which features CBD as the primary cannabinoid and which
also contains other cannabinoid and non-cannabinoid components, in
the treatment of ulcerative colitis in patients refractory to
5-ASA. This study follows pre-clinical research that has shown
GWP42003 to have anti-inflammatory properties in a number of
accepted animal models of inflammation, notably of the gut and the
joints. The primary endpoint of this study is the percentage of
participants achieving remission quantified by the MAYO score. This
study will also determine whether GWP42003 has a positive benefit
for subjects on symptom control, as well as other related secondary
measures. Data from this 60 patient study is expected in the second
half of 2014.
Type-2 Diabetes
In March 2014, GW commenced a 12-week randomized, double blind,
placebo controlled Phase 2b study of GWP42004 to treat type-2
diabetes. GWP42004 is an orally administered product which features
plant-derived tetrahydrocannabivarin (THCV) as its active
ingredient. THCV is distinct from THC and does not share its
intoxicating psychoactive effects. The primary objective of this
study is to compare the change in glycemic control in participants
with type-2 diabetes when treated with one of three doses of
GWP42004, or placebo as add-on therapy, to metformin with the
primary endpoint being change from baseline to the end of treatment
in mean glycosylated haemoglobin A1c (HbA1c) level. The safety and
tolerability of GWP42004 compared with placebo will also be
assessed. This study is expected to enroll approximately 200
patients with an estimated completion date of the second half of
2015.
This study follows positive findings reported in November 2012
from a Phase 2a exploratory study, showing evidence of
anti-diabetic effects and supporting advancement of GWP42004 into
further clinical development. These findings were consistent with
pre-clinical data demonstrating that GWP42004 protects the
insulin-producing cells of the pancreatic islets, a highly
desirable feature of a new anti-diabetic medicine, increases
insulin sensitivity, and reduces fasting plasma glucose levels.
GW believes that if the Phase 2b study confirms the Phase 2a
findings, GWP42004 would have the potential to offer a novel
orally-administered treatment option in this large potential
market.
Schizophrenia
In March 2014, GW commenced a Phase 2a trial using GWP42003 to
treat schizophrenia, featuring purified CBD as its active
ingredient. The primary objective of this study is to compare the
change in symptom severity in patients with schizophrenia or
related psychotic disorder when treated with GWP42003 or placebo,
added to first-line anti-psychotic therapy over a period of six
weeks as change from baseline to the end of treatment using the
Positive and Negative Symptom Scale (PANSS) total score. Secondary
objectives are to evaluate the effect of GWP42003 on quality of
life and cognition and to assess the safety and tolerability of
GWP42003. This study is expected to enroll approximately 80
patients with an estimated completion date of the second half of
2015.
GWP42003 has shown notable anti-psychotic effects in accepted
pre-clinical models of schizophrenia and importantly has also
demonstrated the ability to reduce the characteristic movement
disorders induced by currently available anti-psychotic agents. The
mechanism of GWP42003 does not appear to rely on the D2 receptor
augmentation of standard antipsychotics and therefore has the
potential to offer a novel treatment option in this therapeutic
area.
Orphan Program in Glioma
GW is testing its product candidate GWP42002:GWP42003 in the
treatment of recurrent glioblastoma multiforme, or GBM, a
particularly aggressive brain tumor which is considered a rare
disease by the FDA and the European Medicines Agency. In
pre-clinical models, GW has shown cannabinoids to be orally active
in the treatment of gliomas and have shown tumor response to be
positively associated with tissue levels of cannabinoids. GW
commenced an early proof of concept Phase 1b/2a clinical trial in
20 patients with recurrent GBM with initial safety data expected in
2014.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in
conjunction with the unaudited condensed consolidated financial
information contained herein. GW presents its condensed
consolidated financial information in pounds sterling.
Solely for the convenience of the reader, unless otherwise
indicated, all pound sterling amounts stated in the Condensed
Consolidated Balance Sheet as at 30 June 2014 and in the Condensed
Consolidated Income Statement, Condensed Consolidated Statement of
Changes in Equity and Condensed Consolidated Cash Flow Statement
for the three and nine months ended 30 June 2014 have been
translated into U.S. dollars at the rate on 30 June 2014 of $1.7105
to GBP1.00. These translations should not be considered
representations that any such amounts have been, could have been or
could be converted into U.S. dollars at that or any other exchange
rate as at that or any other date.
Results of Operations:
Comparison of three month periods ended 30 June 2014 and 30 June
2013:
Revenue
Total revenue for the three months ended 30 June 2014 was GBP7.6
million, an increase of GBP0.3 million compared to the GBP7.3
million recorded for three months ended 30 June 2013. This net
increase reflects:
- GBP0.7 million increase in Sativex product sales revenues to
GBP1.3 million for the three months ended 30 June 2014 compared to
GBP0.5 million for the three months ended 30 June 2013. This
reflects an increase in shipments of Sativex to our commercial
partners.
- GBP0.1 million decrease in research and development fees to
GBP6.0 million for the three months ended 30 June 2014 from GBP6.1
million for the three months ended 30 June 2013. This decrease
reflects the end of the Otsuka-funded early-stage pipeline research
collaboration on 30 June 2013.
- GBP0.3 million decrease in milestone income to nil for the
three months ended 30 June 2014 from GBP0.3 million for the three
months ended 30 June 2013. This decrease reflects the fact that the
prior period included a GBP0.3 million Italian commercial pricing
approval milestone from Almirall.
Sativex in-market sales volumes sold by GW's commercial partners
for the three months ended 30 June 2014 were 70% higher than in the
three months ended 30 June 2013.
Cost of sales
Cost of sales for the three months ended 30 June 2014 was GBP0.6
million, an increase of GBP0.3 million, compared to GBP0.3 million
for the three months ended 30 June 2013. This increase reflects the
increased volume of Sativex product shipped to partners in the
period ended 30 June 2014.
Research and development expenditure
Total research and development expenditure for the three months
ended 30 June 2014 was GBP10.2 million compared to GBP8.4 million
for the three months ended 30 June 2013. The GBP1.8 million
increase resulted from a GBP1.9 million increase in GW-funded
R&D and a GBP0.1 million decrease in partner-funded research
and development, linked to the Otsuka funded Phase 3 cancer pain
clinical program.
GW-funded research and development expenditure for the three
months ended 30 June 2014 was GBP4.2 million, an increase of GBP1.9
million from GBP2.3 million for the three months ended 30 June
2013. This reflects the planned use of proceeds following U.S.
equity offerings in 2013 and 2014 in the development of Epidiolex,
CBDV and other pipeline candidates. The increase was principally
linked to:
-- GBP0.9 million increase in staff and employee-related
expenses relating to increased headcount and operations for
GW-funded activities, as well as the provision for payroll taxes on
unrealized staff share option gains and share-based payment
charges.
-- GBP0.4 million increase in preclinical activities and intellectual property costs.
-- GBP0.3 million increase in R&D consumables.
-- GBP0.3 million increase in growing costs driven by growing of
an increased volume of raw materials for the Epidiolex program.
Management and administrative expenses
Management and administrative expenses for the three months
ended 30 June 2014 was GBP4.1 million, an increase of GBP3.2
million from the GBP0.9 million for the three months ended 30 June
2013. This increase includes:
-- GBP1.8 million unrealized loss on foreign exchange primarily
resulting from the re-translation of our dollar denominated cash
deposits to pounds sterling (GBP111.6 million equivalent at 30 June
2014).
-- GBP1.2 million in respect of employee-related expenses,
comprising a GBP0.5 million increase in the charge in respect of
the provision for payroll taxes on unrealized staff share option
gains, a GBP0.4 million increase in payroll costs and a GBP0.3
million increase in payroll taxes on realized staff share option
gains.
-- GBP0.2 million in respect of increased costs associated with
operating as a U.S.-listed company.
Taxation
The tax credit was GBP0.4 million for the three months ended 30
June 2014, an increase of GBP0.1 million from GBP0.3 million
recorded in the three months ended 30 June 2013. The current period
reflects an accrual of a GBP0.7 million research and development
tax credit claim that the Group expects to submit at year-end in
respect of research and development expenditure incurred. This is
offset by a GBP0.3 million reduction to the deferred tax asset held
by the Group's commercial subsidiary, GW Pharma Limited, as the
company utilizes brought forward tax losses to offset against its
current period profits.
Comparison of nine month periods ended 30 June 2014 and 30 June
2013:
Revenue
Total revenue for the nine months to 30 June 2014 was GBP22.6
million, compared to GBP20.2 million for the nine months ended 30
June 2013. This net increase reflects:
- GBP2.3 million increase in Sativex product sales revenues to
GBP3.4 million for the nine months ended 30 June 2014 compared to
GBP1.1 million for the nine months ended 30 June 2014.
- GBP0.4 million increase in research and development fees to
GBP18.2 million for the nine months ended 30 June 2014 from GBP17.8
million for the nine months ended 30 June 2013.
- GBP0.3 million decrease in milestone income, reflecting the
fact that the period to 30 June 2013 included a GBP0.3 million
Italian commercial pricing approval milestone from Almirall.
- No change in license, collaboration and technical access fees
- with GBP1.0 million being recorded for each of the nine month
periods ended 30 June 2014 and 30 June 2013.
The increase in GW's Sativex product sales revenue for the nine
months ended 30 June 2014 compared to the nine months ended 30 June
2013 was driven by a 77% increase in volume of Sativex inventory
shipped to GW's commercial partners. This increase was driven by
significant increases in shipments to Germany compared to the
comparative period and strong sales in Italy following the
territory's launch in the second half of the year ended 30
September 2013.
Sativex in-market sales volumes sold by GW's commercial partners
for the nine months ended 30 June 2014 were 50% higher than in the
nine months ended 30 June 2013.
Sativex product sales revenue in the nine months ended 30 June
2013 was negatively impacted by the German National Association of
Statutory Health Insurance Funds decision to impose a price
reduction on Sativex sales in Germany effective for sales from 1
July 2012. Consequently, an additional GBP0.7 million rebate
provision was recognized in the nine months ended 30 June 2013, of
which GBP0.6 million related to sales recognized in the year ended
30 September 2012.
Research and development fees charged to Otsuka for the nine
months to 30 June 2014 were GBP18.2 million, compared to GBP17.8
million for the nine months ended 30 June 2013. The increased
research and development fees reflect increased research and
development expenditure which has been recharged to Otsuka, further
details of which are given in the expenditure section below.
Cost of sales
Cost of sales for the nine months ended 30 June 2014 was GBP1.6
million, an increase of GBP0.7 million compared to GBP0.9 million
for the nine months ended 30 June 2013. The GBP0.7 million increase
reflects the increased volume of Sativex inventory shipped to
partners in the nine months ended 30 June 2014.
Research and development expenditure
Total research and development expenditure for the nine months
ended 30 June 2014 was GBP31.2 million, an increase of GBP7.7
million compared to GBP23.5 million for the nine months ended 30
June 2013. The GBP7.7 million increase resulted from a GBP0.4
million increase in partner-funded research and development, linked
to the Otsuka-funded Phase 3 cancer pain clinical program, and a
GBP7.3 million increase to GW-funded R&D. This reflects the
planned use of proceeds arising from U.S. equity offerings in 2013
and 2014 in the development of Epidiolex, CBDV, and other pipeline
candidates. The increase was principally linked to:
-- GBP2.1 million increase in staff and employee-related
expenses relating to increased headcount and operations for
GW-funded activities.
-- GBP1.7 million movement on provision for payroll taxes on
unrealized staff share option gains and share-based payment
charges.
-- GBP1.6 million increase in epilepsy and other GW-funded
clinical program costs - reflecting the recent successful
completion of the CBDV Phase 1 study plus the costs of providing
regulatory support and Epidiolex under FDA-approved expanded access
INDs.
-- GBP0.8 million increase in preclinical activities.
-- GBP0.8 million increase in growing costs driven by growing of
an increased volume of raw materials for the Epidiolex program.
-- GBP0.3 million increase in patent and intellectual property costs.
Management and administrative expenses
Management and administrative expenses for the nine months ended
30 June 2014 was GBP7.7 million, an increase of GBP4.9 million
compared to the GBP2.8 million incurred in the nine months ended 30
June 2013. The GBP4.9 million increase includes:
-- GBP2.6 million in respect of employee-related expenses,
comprising a GBP1.4 million increase in the charge in respect of
the provision for payroll taxes on unrealized staff share option
gains, a GBP0.8 million increase in payroll costs and a GBP0.4
million increase in payroll taxes on realized staff share option
gains.
-- GBP2.3 million unrealized loss on foreign exchange resulting
from the re-translation of our dollar denominated cash deposits to
pounds sterling (GBP111.6 million equivalent at 30 June 2014). GW
expects to continue to hold a substantial proportion of its cash
deposits in U.S. dollars to match future research and development
expenditure in the U.S. and, as a result of changes to the U.S.
dollar to GBP sterling exchange rate, can expect to incur future
foreign exchange gains and losses upon re-translation of these
deposits to pounds sterling at closing rates on each balance sheet
date.
Taxation
The tax credit was GBP3.0 million for the nine months ended 30
June 2014, a decrease of GBP2.1 million compared to a GBP5.1
million credit recorded in the nine months ended 30 June 2013.
In the nine months ended 30 June 2014, GW recorded a tax credit
of GBP3.0 million due to: (i) the recognition of an accrued GBP3.1
million research and development tax credit expected to be
claimable at year end by GW Research Limited in respect of the
research and development expenditure incurred in the nine months
ended 30 June 2014; (ii) the recognition of an additional GBP0.3
million of research and development tax credits in respect of the
year ended 30 September 2013 in its principal research subsidiary,
GW Research Limited, following the submission of the tax returns
for that period; (iii) the recognition of an additional GBP0.3
million deferred tax asset in respect of cumulative trading losses
which GW intends to utilize to offset future trading profits by GW
Pharma Limited, the Group's principal commercial trading
subsidiary, during the period and (iv) recording of GBP0.7 million
of deferred tax expense in recognition of the fact that some of
these losses will be utilized on profits earned in the period by GW
Pharma Limited.
In the nine months ended 30 June 2013, GW reached an agreement
with the UK tax authority, HM Revenue & Customs, or HMRC,
regarding the tax computations GW submitted for the year ended 30
September 2012. The total tax credit for the prior period of GBP5.1
million was made up of: (i) the recognition of a GBP2.0 million
research and development tax credit by GW Research Limited; (ii)
the recognition of an additional GBP1.9 million of research and
development tax credits in respect of the year ended 30 September
2012 by GW Research Limited and (iii) the recognition of a net
GBP1.2 million deferred tax asset in respect of cumulative trading
losses of GW Pharma Limited.
Liquidity and Capital Resources
Cash Flow
Net cash used by operations for the nine months ended 30 June
2014 of GBP7.4 million was GBP2.6 million higher than the GBP4.8
million used by operations in the nine months ended 30 June 2013,
principally reflecting the increase in investment in Epidiolex and
other GW-funded research and development.
GBP3.2 million of research and development tax credits were
received in the nine months ended 30 June 2014 compared to the
GBP2.8 million received during the nine months ended 30 June 2013.
Further details of research and development tax credit claims are
given in the taxation section above.
Capital expenditure for the nine months ended 30 June 2014 of
GBP4.8 million, consisting primarily of upgrades to Sativex and
Epidiolex manufacturing facilities, was GBP3.0 million higher than
the GBP1.8 million for the nine months ended 30 June 2013.
Net cash flow from financing activities increased by GBP124.9
million to a GBP143.3 million inflow in the nine months ended 30
June 2014 compared to a GBP18.4 million inflow for the nine months
ended 30 June 2013. This increase reflects the net proceeds of
GBP69.5 million received from the follow-on offering in June 2014,
GBP56.8 million received from the follow-on offering in January
2014, GBP7.0 million advanced funding from the Group's landlord to
fund the expansion and upgrades to manufacturing facilities, GBP5.3
million of proceeds from the exercise warrants held by Great Point
Partners and proceeds on exercise of share options of GBP4.7
million.
The above cash flows resulted in net cash inflow for the nine
months ended 30 June 2014 of GBP130.2 million compared to a net
cash inflow of GBP14.2 million for the nine months ended 30 June
2013.
As at 30 June 2014, GW had a closing cash position of GBP168.3
million compared to GBP38.1 million as at 30 September 2013.
Property, plant and equipment
Property, plant and equipment at 30 June 2014 increased by
GBP3.8 million to GBP9.3 million from GBP5.5 million at 30
September 2013. This increase reflects the upgrade and expansion of
new manufacturing facilities for Sativex and Epidiolex.
Inventories
Inventories at 30 June 2014 remained consistent at GBP4.7
million compared with 30 September 2013. Inventories consist of
finished goods, consumable items and work in progress and are
stated net of a GBP0.6 million realisable value provision (30
September 2013: GBP1.6 million). During the nine months ended 30
June 2014, the provision for inventories reduced by (i) GBP0.4
million as a result of having utilised some of the Group's surplus
inventory to manufacture Sativex in the period and (ii) GBP0.6
million due to the write off of raw materials and the transfer of
work-in-progress materials to R&D programs. All of this
material was fully provided for at 30 September 2013.
Trade receivables and other receivables
Trade receivables and other receivables at 30 June 2014
increased by GBP2.9 million to GBP4.6 million from GBP1.7 million
at 30 September 2013. This increase primarily reflects invoices to
the Group's landlord to fund the expansion and upgrades of
manufacturing facilities as well as invoices for Sativex shipments
in June 2014.
Trade and other payables
Current trade and other payables at 30 June 2014 increased by
GBP6.1 million to GBP15.5 million from GBP9.4 million at 30
September 2013. This increase reflects a GBP2.8 million increase in
payroll taxes payable resulting from realized staff share option
gains, a GBP2.1 million increase in the provision for payroll taxes
on unrealized staff share option gains and GBP1.2 million of
proceeds of share option exercises due to employees.
Non-current trade and other payables at 30 June 2014 increased
by GBP7.0 million from GBPnil at 30 September 2013. This increase
reflects recognition of the liability to repay the advance funding
received from the Group's landlord to fund the expansion and
upgrades to manufacturing facilities. This is expected to be repaid
in the form of lease rentals commencing upon the completion of
construction, expected in 2015, over a 15-year term.
Headcount
Average headcount for the nine months ended 30 June 2014 was 214
compared to 190 for the nine months ended 30 June 2013.
Guidance
GW expects strong double digit Sativex sales revenue growth in
2014, driven by growth of in-market sales volumes by commercial
partners.
Having successfully raised funds to enable us to prosecute our
Epidiolex and other pipeline programs we expect that GW-funded
R&D will continue to increase in the final quarter of this
year. GW expects a core operating cash outflow for 2014, including
capital expenditure, of approximately GBP24 million ($41 million).
This would result in a year end closing cash position of GBP150-155
million ($257-265 million).
About GW Pharmaceuticals plc
Founded in 1998, GW is a biopharmaceutical company focused on
discovering, developing and commercializing novel therapeutics from
its proprietary cannabinoid product platform in a broad range of
disease areas. GW commercialized the world's first plant-derived
cannabinoid prescription drug, Sativex(R) , which is approved for
the treatment of spasticity due to multiple sclerosis in 26
countries outside the United States. Sativex is also in Phase 3
clinical development as a potential treatment of pain associated
with advanced cancer. This Phase 3 program has received Fast Track
Designation from the U.S. Food and Drug Administration (FDA) and is
intended to support the submission of a New Drug Application for
Sativex in cancer pain with the FDA and in other markets around the
world. GW has a deep pipeline of additional cannabinoid product
candidates, including Epidiolex(R) in the treatment of childhood
epilepsy, which has received Fast Track Designation from the FDA
for Dravet syndrome as well as Orphan Drug Designations from the
FDA in both the treatment of Dravet syndrome and Lennox-Gastaut
syndrome. GW's product pipeline also includes compounds in Phase 1
and 2 clinical development for glioma, ulcerative colitis, type 2
diabetes, and schizophrenia. For further information, please visit
www.gwpharm.com.
Forward-looking statements
This news release contains forward-looking statements that
reflect GWs current expectations regarding future events, including
statements regarding financial performance, the timing of clinical
trials, the relevance of GW products commercially available and in
development, the clinical benefits of Sativex(R) and Epidiolex(R)
and the safety profile and commercial potential of Sativex and
Epidiolex. Forward-looking statements involve risks and
uncertainties. Actual events could differ materially from those
projected herein and depend on a number of factors, including
(inter alia), the success of GW's research strategies, the
applicability of the discoveries made therein, the successful and
timely completion of uncertainties related to the regulatory
process, and the acceptance of Sativex, Epidiolex and other
products by consumer and medical professionals. A further list and
description of risks and uncertainties associated with an
investment in GW can be found in GW's filings with the U.S.
Securities and Exchange Commission. Existing and prospective
investors are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
GW undertakes no obligation to update or revise the information
contained in this press release, whether as a result of new
information, future events or circumstances or otherwise.
GW Pharmaceuticals plc
Condensed consolidated income statements
Condensed consolidated income statement for the three months
ended 30 June 2014
Three months Three months Three months
ended ended ended
30 June 30 June 30 June
Notes 2014 2014 2013
$000's GBP000's GBP000's
Revenue 2 13,019 7,611 7,258
Cost of sales (1,098) (642) (267)
Research and development
expenditure 3 (17,394) (10,169) (8,434)
Management and administrative
expenses (7,032) (4,111) (869)
_______ _______ _______
Operating loss (12,505) (7,311) (2,312)
Interest income 41 24 29
Interest payable (34) (20) (45)
_______ _______ _______
Loss before tax (12,498) (7,307) (2,328)
Tax 648 379 300
_______ _______ _______
Loss for the period (11,850) (6,928) (2,028)
_______ _______ _______
Loss per share
- basic 4 (5.5c) (3.2p) (1.3p)
- diluted 4 (5.5c) (3.2p) (1.3p)
Condensed consolidated income statement for the nine months
ended 30 June 2014
Nine months Nine months Nine months
ended ended ended
30 June 30 June 30 June
Notes 2014 2014 2013
$000's GBP000's GBP000's
Revenue 2 38,702 22,626 20,173
Cost of sales (2,805) (1,640) (925)
Research and development
expenditure 3 (53,380) (31,207) (23,534)
Management and administrative
expenses (13,198) (7,716) (2,750)
_______ _______ _______
Operating loss (30,681) (17,937) (7,036)
Interest income 137 80 111
Interest payable (101) (59) (45)
_______ _______ _______
Loss before tax (30,645) (17,916) (6,970)
Tax 5,089 2,975 5,071
_______ _______ _______
Loss for the period (25,556) (14,941) (1,899)
_______ _______ _______
Loss per share
- basic 4 (12.7c) (7.4p) (1.3p)
- diluted 4 (12.7c) (7.4p) (1.3p)
All activities relate to continuing operations.
The Group has no recognised gains or losses other than the
losses above and therefore no separate consolidated statement of
comprehensive income has been presented.
GW Pharmaceuticals plc
Condensed consolidated statements of changes in equity
Nine months ended 30 June 2014
Called-up Share
share premium Other Accumulated
capital account reserves deficit Total
GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1 October 2012 133 65,947 20,184 (65,032) 21,232
Issue of share capital 45 19,567 - - 19,612
Expense of new equity issue - (1,759) - - (1,759)
Share-based payment transactions - - - 573 573
Loss for the period - - - (1,899) (1,899)
_________ _________ ________ __________ ________
Balance at 30 June 2013 178 83,755 20,184 (66,358) 37,759
_________ _________ ________ __________ ________
Balance at 1 October 2013 178 84,005 20,184 (68,965) 35,402
Issue of share capital (note
5) 51 127,316 - - 127,367
Expense of new equity issue - (1,060) - - (1,060)
Exercise of share options 4 4,788 - - 4,792
Exercise of warrants 3 922 (922) 5,284 5,287
Share-based payment transactions - - - 927 927
Loss for the period - - - (14,941) (14,941)
_________ _________ ________ __________ ________
Balance at 30 June 2014 236 215,971 19,262 (77,695) 157,774
_________ _________ ________ __________ ________
GW Pharmaceuticals plc
Condensed consolidated balance sheets
As at 30 June 2014
As at As at As at
30 June 30 June 30 September
2014 2014 2013
Non-current assets $000's GBP000's GBP000's
Intangible assets - goodwill 8,912 5,210 5,210
Property, plant and equipment 15,855 9,269 5,476
__________ __________ __________
24,767 14,479 10,686
__________ __________ __________
Current assets
Inventories 8,017 4,687 4,661
Deferred tax asset 855 500 895
Taxation recoverable 5,284 3,089 2,900
Trade receivables and other assets 7,875 4,604 1,733
Cash and cash equivalents 287,822 168,268 38,069
__________ __________ __________
309,853 181,148 48,258
__________ __________ __________
Total assets 334,620 195,627 58,944
__________ __________ __________
Current liabilities
Trade and other payables (26,496) (15,490) (9,440)
Obligations under finance leases (193) (113) (100)
Deferred revenue (9,064) (5,299) (3,181)
__________ __________ __________
(35,753) (20,902) (12,721)
Non-current liabilities
Obligations under finance leases (3,111) (1,819) (1,905)
Trade and other payables (11,974) (7,000) -
Deferred revenue (13,910) (8,132) (8,916)
__________ __________ __________
Total liabilities (64,748) (37,853) (23,542)
__________ __________ __________
Net assets 269,872 157,774 35,402
_________ __________ __________
Equity
Share capital 403 236 178
Share premium account 369,418 215,971 84,005
Other reserves 32,948 19,262 20,184
Accumulated deficit (132,897) (77,695) (68,965)
_________ __________ __________
Total equity 269,872 157,774 35,402
__________ ___________ ___________
----------
GW Pharmaceuticals plc
Condensed consolidated cash flow statements
For the nine months ended 30 June 2014
Nine months Nine months Nine months
ended ended ended
30 June 30 June 30 June
2014 2014 2013
$000's GBP000's GBP000's
Loss for the period (25,557) (14,941) (1,899)
Adjustments for:
Interest income (137) (80) (111)
Interest payable 101 59 45
Tax (5,089) (2,975) (5,071)
Depreciation of property, plant and equipment 1,733 1,013 691
Net foreign exchanges losses 7,150 4,180 414
Decrease in provision for inventories (645) (377) (411)
Share-based payment charge 1,586 927 573
__________ __________ __________
(20,858) (12,194) (5,769)
Increase/(decrease) in inventories 600 351 (524)
(Increase)/decrease in trade receivables
and other assets (4,938) (2,887) 69
Increase in trade and other payables
and deferred revenue 12,553 7,339 1,380
__________ __________ __________
Cash used by operations (12,643) (7,391) (4,844)
Research and development tax credits
received 5,441 3,181 2,832
__________ __________ __________
Net cash outflow from operating activities (7,202) (4,210) (2,012)
__________ __________ __________
Investing activities
Interest received 164 96 115
Purchases of property, plant and equipment (8,144) (4,761) (1,816)
__________ __________ __________
Net cash outflow from investing activities (7,980) (4,665) (1,701)
__________ __________ __________
Financing activities
Proceeds on exercise of share options 8,197 4,792 -
Proceeds of new equity issue 217,861 127,367 19,612
Expenses of new equity issue (1,813) (1,060) (1,416)
Proceeds of warrant exercises 9,043 5,287 -
Interest paid (101) (59) (45)
Proceeds from finance leases - - 225
Capital project funding from landlord 11,975 7,000 -
Capital element of finance leases (125) (73) -
__________ __________ __________
Net cash inflow from financing activities 245,037 143,254 18,376
__________ __________ __________
Effect of foreign exchange rate changes
on cash and cash equivalents (7,150) (4,180) (415)
__________ __________ __________
Net increase in cash and cash equivalents 222,705 130,199 14,248
Cash and cash equivalents at beginning
of the period 65,117 38,069 29,335
__________ __________ __________
Cash and cash equivalents at end of the
period 287,822 168,268 43,583
__________ __________ __________
-----------
GW Pharmaceuticals plc
Notes to the condensed consolidated financial statements
Three and nine months ended 30 June 2014
1. Significant accounting policies
Basis of preparation
The annual financial statements of GW Pharmaceuticals plc and
subsidiaries ("the Group") are prepared in accordance with
International Financial Reporting Standards ("IFRS"), as adopted by
the European Union and as issued by the International Accounting
Standards Board ("IASB") and were approved by the Board on 6
December 2013.
Whilst the financial information included in this quarterly
press release has been prepared in accordance with IFRS, this
announcement does not itself contain sufficient information to
comply with IFRS. The accounting policies applied in preparing this
financial information are consistent with the Group's financial
statements for the year ended 30 September 2013. This quarterly
financial information includes all adjustments, which are necessary
to fairly state the results of the quarter. Quarter results are not
necessarily indicative of results to be expected for the full
year.
The Group has not early adopted any standard, interpretation or
amendment that was issued but is not yet effective.
Solely for the convenience of the reader, unless otherwise
indicated, all pound sterling amounts stated in the condensed
consolidated balance sheet as at 30 June 2014 and in the condensed
consolidated income statement, and condensed consolidated cash flow
statement for the three and nine months ended 30 June 2014 have
been translated into U.S. dollars at the rate on 30 June 2014 of
$1.7105 to GBP1.00. These translations should not be considered
representations that any such amounts have been, could have been or
could be converted into U.S. dollars at that or any other exchange
rate as at that or any other date.
2. Revenue analysis
Analysis by type:
Three months Three months Nine months Nine months
ended ended ended ended
30 June 30 June 30 June 30 June
2014 2013 2014 2013
GBP000's GBP000's GBP000's GBP000's
Product sales 1,287 546 3,423 1,131
Research and development fees 5,982 6,138 18,190 17,821
Licence, collaboration and
technical access fees 342 324 1,013 971
Development and approval milestone
fees - 250 - 250
__________ __________ __________ __________
Total revenue 7,611 7,258 22,626 20,173
__________ __________ __________ __________
2. Revenue analysis (continued)
Geographical analysis of turnover by destination of
customer:
Three months Three months Nine months Nine months
ended ended ended ended
30 June 30 June 30 June 30 June
2014 2013 2014 2013
GBP000's GBP000's GBP000's GBP000's
UK 209 196 670 580
Europe (excluding UK) 1,185 882 3,038 1,179
United States 5,851 4,746 17,879 14,040
Canada 165 (28) 518 415
Asia 201 1,462 521 3,959
__________ __________ __________ __________
7,611 7,258 22,626 20,173
__________ __________ __________ __________
3. Research and development expenditure
Three months Three months Nine months Nine months
ended ended ended ended
30 June 30 June 30 June 30 June
2014 2013 2014 2013
GBP000's GBP000's GBP000's GBP000's
GW-funded research and development 4,187 2,296 13,017 5,713
Development partner-funded research
and development 5,982 6,138 18,190 17,821
__________ __________ __________ __________
Total 10,169 8,434 31,207 23,534
__________ __________ __________ __________
4. Loss per share
The calculations of loss per share are based on the following
results and numbers of shares.
Three months Three months Nine months Nine months
ended ended ended ended
30 June 30 June 30 June 30 June
2014 2013 2014 2013
GBP000's GBP000's GBP000's GBP000's
Loss for the period - basic
and diluted (6,928) (2,028) (14,941) (1,899)
___________ ___________ ___________ ___________
Number of shares
Three months Three months Nine months Nine months
ended ended ended ended
30 June 30 June 30 June 30 June
2014 2013 2014 2013
Weighted average number of ordinary
shares 217.6 161.7 201.6 142.8
Less ESOP trust ordinary shares(1) - - - -
___________ __________ ___________ _________
Weighted average number of ordinary
shares for purposes of basic
earnings per share 217.6 161.7 201.6 142.8
Effect of potentially dilutive
shares arising from share options - - - -
and warrants(2)
___________ __________ ___________ __________
Weighted average number of ordinary
shares for purposes of diluted
earnings per share 217.6 161.7 201.6 142.8
___________ ___________ ___________ ___________
Loss per share-basic (3.2p) (1.3p) (7.4p) (1.3p)
Loss per share-diluted (3.2p) (1.3p) (7.4p) (1.3p)
(1) As at 30 June 2014, 34,706 ordinary shares were held in the
ESOP trust. The financial effect is less than GBP0.1 million for
each of the three and nine month periods ended 30 June 2014, and
consequently these have not been presented above.
(2) The Group incurred a loss in the three and nine months ended
30 June 2014, and the three and nine month period ended 30 June
2013. As a result, the inclusion of potentially dilutive share
options and warrants in the diluted loss per share calculation for
such periods would have an antidilutive effect on the loss per
share computation. Therefore, the impact of 8.7 million and 9.3
million share options and dilutive warrants respectively have been
excluded from the diluted loss per share calculation for the three
and nine months ended 30 June 2014 respectively. The impact of 5.1
million and 5.2 million share options and dilutive warrants have
been excluded from the diluted loss per share calculation for the
three and nine months ended 30 June 2013 respectively.
5. Equity fundraising
On 14 January 2014, the Company successfully completed an equity
financing, issuing 33.7 million ordinary shares in the form of ADSs
listed on the Nasdaq Global market, raising net proceeds after
expenses of $94.1 million (GBP56.8 million). The proceeds are
expected to be used primarily to advance the development of the
Group's epilepsy product candidates, to expand the manufacturing
capability for these products and to fund the establishment of a
U.S. staff presence to manage the epilepsy program.
On 25 June 2014, the Company successfully completed an equity
financing, issuing 17.5 million ordinary shares in the form of ADSs
listed on the Nasdaq Global market, raising net proceeds after
expenses of $118 million (GBP69.5 million). In addition, exercise
of options by selling shareholders generated exercise proceeds of
$4.3 million (GBP2.5 million). The proceeds are expected to be used
to fund pre-launch activities for Epidiolex in the United States,
the expansion of Epidiolex growing and manufacturing capability and
build-up of inventory in preparation for launch of Epidiolex, if
approved, the advancement of other early stage pipeline
opportunities, with a particular focus on orphan diseases, from our
proprietary cannabinoid platform; and for other general corporate
purposes.
6. Availability of information
A copy of this statement is available from the Company Secretary
at Porton Down Science Park, Salisbury, Wiltshire, SP4 0JQ. Full
details can also be found on the Group's website at
www.gwpharm.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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