GW Pharmaceuticals plc Reports Financial Results and Operational Progress for the Third Quarter Ended September 30, 2019


Ryan Allway

November 10th, 2019

News


– Epidiolex U.S. year to date net sales of $188.0 million, including Q3 net sales of $86.1 million –
– Conference call today at 4:30 p.m. ET –

CARLSBAD, Calif., Nov. 05, 2019 (GLOBE NEWSWIRE) — GW Pharmaceuticals plc (NASDAQ: GWPH, GW, the Company or the Group), the world leader in the discovery, development and commercialization of cannabinoid prescription medicines, announces financial results for the third quarter ended September 30, 2019.

“In this first year of launch, we are pleased to report continued Epidiolex revenue growth in the US. Receptivity to the introduction of this breakthrough treatment continues to be highly encouraging as a result of positive physician and patient experiences as well as strong payer coverage,” stated Justin Gover, GW’s Chief Executive Officer. “We see significant opportunity for the short, medium and long term and believe that all the fundamentals are in place to make Epidiolex a very successful brand. We can expect to see additional momentum from Europe as well as the launch of the Tuberous Sclerosis indication during 2020. On top of this, GW is ideally placed to consolidate its leadership in cannabinoid science through advancing several mid and late stage pipeline programs in the months ahead.”

OPERATIONAL HIGHLIGHTS

  • Epidiolex® (cannabidiol)
    • U.S. commercial update
      • Q3 Net sales of $86.1M; $188.0M net sales in the first three quarters of 2019
      • Over 15,000 patients have received Epidiolex prescriptions since launch
      • Over 3,000 physicians have generated dispensed prescriptions since launch
      • Strong payor coverage with approximately 93 percent of all Commercial, Medicaid and Medicare lives in the US having a coverage determination, of which 65 percent are PA to indication or less restrictive
    • European launch update
      • European Commission approval in September 2019
      • Commercialization underway in France and Germany
      • UK NICE guidance expected in Q4 2019; Spain and Italy launches to follow in 2020
      • Early Access Program now includes over 1,100 patients across 5 major EU countries, and over 400 physicians from 250 top epilepsy centers
    • New Indications
      • Tuberous Sclerosis Complex
        • TSC Phase 3 data to be presented at American Epilepsy Society annual meeting in December 2019
        • TSC sNDA expected to be filed with FDA in early 2020, approval decision expected mid-2020
        • TSC EMA submission expected in Q1 2020
      • Rett Syndrome
        • Phase 3 trial in Rett Syndrome recruiting
    • Life-cycle management
      • Several new formulations of CBD in development including modified oral solution, capsule and intravenous formulation
        • PK data generated in 2019 supports advancing multiple new formulations into additional Phase 1 studies in 2020
    • Exclusivity
      • 7 years of orphan exclusivity confirmed by FDA, plus 6-month pediatric extension expected. 10 years of orphan exclusivity in Europe plus 2 year pediatric extension expected
      • 9 granted patents listed in “Orange Book” and align directly with Epidiolex FDA label
        • Patent expiry dates to 2035
      • Additional patent applications under review, including patents related to the use of Epidiolex in TSC and other indications
      • Patent application recently published indicating that Epidiolex is more efficacious than synthetic CBD in pre-clinical epilepsy models based on the key difference that Epidiolex comprises up to 2 percent of other cannabinoids.
  • Pipeline progress
    • Sativex® (nabiximols)
      • Initial U.S. target indication: Multiple Sclerosis spasticity
        • 3 positive Phase 3 trials completed in Europe
        • Clinical IND open, FDA feedback received on clinical plan
        • Clinical program expected to commence in Q1 2020 to augment existing pivotal data package
      • Clinical program in additional indications in planning for 2020-2021
    • CBDV
      • IND open for 30-patient open label study in autism expected to commence Q4 19. Initial data in 2020.
      • Investigator-led 100 patient placebo-controlled trial in autism underway
      • Open label study in Rett syndrome and seizures ongoing
    • Neonatal Hypoxic-Ischemic Encephalopathy (NHIE) intravenous CBD program
      • Phase 1b safety study in patients expected to commence in Q4
      • Orphan Drug and Fast Track Designations granted from FDA and EMA
    • Schizophrenia (GWP42003)
      • Positive Phase 2a trial published
      • Phase 2b trial expected to commence H1 2020

FINANCIAL HIGHLIGHTS

  • Revenue for the quarter ended September 30, 2019 was $91.0 million compared to $2.4 million for the quarter ended September 30, 2018
  • Cash and cash equivalents at September 30, 2019 were $554.7 million compared to $591.5 million as of December 31, 2018
  • Net loss for the quarter ended September 30, 2019 was $13.8 million compared to a net loss of $79.9 million for the quarter ended September 30, 2018

Conference Call and Webcast Information
GW Pharmaceuticals will host a conference call and webcast to discuss the quarter ending September 30, 2019 financial results today at 4:30 pm EST. To participate in the conference call, please dial 877-407-8133 (toll free from the U.S. and Canada) 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 90 days. Replay Numbers: (toll free):1-877-481-4010 or 919-882-2331 (international). For both dial-in numbers please use conference Replay ID: 54868.

About GW Pharmaceuticals plc and Greenwich Biosciences, Inc.

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’s lead product, EPIDIOLEX (cannabidiol oral solution) is commercialized in the US by its U.S. subsidiary Greenwich Biosciences for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome in patients two years of age or older. This product has received approval in Europe under the tradename EPIDYOLEX. The Company continues to evaluate EPIDIOLEX in additional rare conditions including Tuberous Sclerosis Complex (TSC) and Rett syndrome. GW commercialized the world’s first plant-derived cannabinoid prescription drug, Sativex® (nabiximols), which is approved for the treatment of spasticity due to multiple sclerosis in numerous countries outside the United States and for which the Company is now advancing a late stage program in order to seek FDA approval. The Company has a deep pipeline of additional cannabinoid product candidates which includes compounds in Phase 1 and 2 trials for epilepsy, autism, glioblastoma, and schizophrenia. For further information, please visit www.gwpharm.com.

Forward-looking statements
This news release contains forward-looking statements that reflect GW’s current expectations regarding future events, including statements regarding financial performance, the timing of clinical trials, the timing and outcomes of regulatory or intellectual property decisions, the relevance of GW products commercially available and in development, the clinical benefits of EPIDIOLEX (cannabidiol) oral solution and Sativex (nabiximols) and the safety profile and commercial potential of EPIDIOLEX and Sativex. 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 and 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, including the most recent Form 10-KT filed on 26 February 2019. 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.

Enquiries:

GW Pharmaceuticals plc
Stephen Schultz, VP Investor Relations (U.S.) 917 280 2424 / 401 500 6570
   
U.S. Media Enquiries:
Sam Brown Inc. Healthcare Communications
 
Christy Curran
Mike Beyer
615 414 8668
312 961 2502
 

EU Media Enquiries:
FTI Consulting

 
Ben Atwell/Mike Trace +44 (0) 203 727 1000

GW PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)

September 30, December 31,
2019 2018
Assets
Cash and cash equivalents $ 554,682 $ 591,497
Accounts receivable, net 41,818 4,192
Inventory 69,288 33,030
Prepaid expenses and other current assets 32,196 17,903
Total current assets 697,984 646,622
Property, plant, and equipment, net 110,161 90,832
Operating lease assets 20,438
Goodwill 6,959 6,959
Deferred tax assets 8,425 8,720
Other assets 3,884 2,935
Total assets $ 847,851 $ 756,068
Liabilities and stockholders’ equity
Accounts payable $ 6,934 $ 9,796
Accrued liabilities 81,704 52,477
Current tax liabilities 2,384
Other current liabilities 6,627 1,559
Total current liabilities 95,265 66,216
Long-term liabilities:
Finance lease liabilities 5,297 5,690
Operating lease liabilities 17,007
Other liabilities 10,627 10,082
Total long-term liabilities 32,931 15,772
Total liabilities 128,196 81,988
Commitments and contingencies
Stockholders’ equity:
Common stock – Ordinary shares par value £0.001; 570 564
370,937,744 shares outstanding as of September 30, 2019;
366,616,688 shares outstanding as of December 31, 2018
Additional paid-in capital 1,619,649 1,581,144
Accumulated deficit (813,013 ) (828,940 )
Accumulated other comprehensive loss (87,551 ) (78,688 )
Total stockholders’ equity 719,655 674,080
Total liabilities and stockholders’ equity $ 847,851 $ 756,068

 

GW PHARMACEUTICALS PLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Revenues
Product net sales $ 90,849 $ 2,343 $ 201,312 $ 8,249
Other revenue 122 77 944 496
Total revenues 90,971 2,420 202,256 8,745
Operating expenses
Cost of product sales 8,150 1,399 19,901 4,815
Research and development 36,301 28,943 99,143 117,541
Selling, general and administrative 64,178 52,685 181,529 116,644
Total operating expenses 108,629 83,027 300,573 239,000
Loss from operations (17,658 ) (80,607 ) (98,317 ) (230,255 )
Interest income 2,249 1,283 6,646 3,041
Interest expense (272 ) (297 ) (805 ) (935 )
Other income 104,117
Foreign exchange gain (loss) 1,889 (823 ) 2,801 (5,123 )
(Loss) income before income taxes (13,792 ) (80,444 ) 14,442 (233,272 )
Income tax (benefit) expense (35 ) (565 ) (1,485 ) 79
Net (loss) income $ (13,757 ) $ (79,879 ) $ 15,927 $ (233,351 )
Net (loss) income per share:
Basic $ (0.04 ) $ (0.23 ) $ 0.04 $ (0.68 )
Diluted $ (0.04 ) $ (0.23 ) $ 0.04 $ (0.68 )
Weighted average shares outstanding:
Basic 372,246 341,302 371,286 340,675
Diluted 372,246 341,302 376,985 340,675

GW PHARMACEUTICALS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

Nine Months Ended September 30,
2019     2018
Cash flows from operating activities
Net income (loss) $ 15,927 $ (233,351 )
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Foreign exchange (gain) loss (418 ) 5,097
Share-based compensation 35,633 26,035
Depreciation and amortization 7,096 7,127
Deferred income taxes 835
Gain from sale of priority review voucher (104,117 )
Other 39 233
Changes in operating assets and liabilities:
Accounts receivable, net (37,691 ) (581 )
Inventory (37,561 ) (14,024 )
Prepaid expenses and other current assets (14,869 ) 15,005
Other assets 2,968 (398 )
Accounts payable (1,161 ) 4,040
Current tax liabilities (601 ) (4,844 )
Accrued liabilities 29,176 13,503
Other liabilities (1,943 ) 1,013
Net cash used in operating activities (107,522 ) (180,310 )
Cash flows from investing activities
Proceeds from sale of priority review voucher 104,117
Additions to property, plant and equipment (29,915 ) (23,614 )
Additions to capitalized software (1,183 ) (1,049 )
Proceeds from disposal of property, plant and equipment 517
Net cash provided by (used in) investing activities 73,019 (24,146 )
Cash flows from financing activities
Proceeds from exercise of stock options 2,878 619
Payments on finance leases (317 ) (211 )
Payments on landlord financing obligation (404 ) (397 )
Net cash provided by financing activities 2,157 11
Effect of exchange rate changes on cash (4,469 ) 131
Net decrease in cash and cash equivalents (36,815 ) (204,314 )
Cash and cash equivalents at beginning of period 591,497 559,227
Cash and cash equivalents at end of period $ 554,682 $ 354,913

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Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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