I think Forbes said it best in Debra Borchardt’s recent article, “GW Pharmaceutical Gets Closer To Forcing FDA On Cannabis,” with an  announcement a couple of weeks ago that its Clinical Phase 3 trial results for Epidolex were positive in paving the way for FDA approval and tipping over the de-scheduling apple cart.

Whether it materializes in an immediate change or not remains to be seen. The prohibitionists surely have more dirty tricks up their sleeves and will continue to rear their ugly heads every step of the way until the FDA formally takes over the regulatory oversight of medical marijuana for over- and under-the-counter cannabis products in the United States.

Since we first included GW Pharmaceuticals (GWP) on the original CBE 10 Most Important Companies list (#5), we have spoken to many industry players about the inevitable final play for medical marijuana in the U.S. Realistically, we all know that the push for legalizing and regulating “medical marijuana” on a state level has been successful in moving the public opinion meter among Democrats and Republican law makers, and has played well in the battle to end Federal prohibition. At the end of the day, despite all of the anecdotal evidence, “medical marijuana” is not medicine according to the Food and Drug Administration (FDA) until it completes a long, arduous, and expensive process to receive approval as a medicine for use by humans. This process can take up to 10 years per drug application.

When you look at what the cannabis pharmaceutical business that GWP has been building since its inception in 1998, you have to consider the risk and magnitude of the investment that its investors and shareholders made without a guarantee of return. The process includes many steps for New Chemical Entity (NCE) development that includes several steps outlined by Wikipedia below, including:

Preclinical Development

In drug development, preclinical development, also named preclinical studies and nonclinical studies, is a stage of research that begins before clinical trials (testing in humans) can begin, and during which important feasibility, iterative testing and drug safety data are collected.

They further examine the product for suitability to package as capsules, tablets, aerosols, intramuscular injectables, subcutaneous injectables, or intravenous formulations.

Only one in every 5,000 compounds that enters drug discovery to the stage of preclinical development becomes an approved drug.

Clinical Phase

Clinical trials involve three or four steps:^[1]

• Phase I trials, usually in healthy volunteers, determine safety and dosing.
• Phase II trials are used to get an initial reading of efficacy and further explore safety in small numbers of patients having the disease targeted by the NCE.
• Phase III trials are large, pivotal trials to determine safety and efficacy in sufficiently large numbers of patients with the targeted disease. If safety and efficacy are adequately proved, clinical testing may stop at this step and the NCE advances to the new drug application (NDA) stage.
• Phase IV trials are post-approval trials that are sometimes a condition attached by the FDA, also called post-market surveillance studies.

Most NCEs fail during drug development, either because they have unacceptable toxicity or because they simply do not have the intended effect on the targeted disease as shown in clinical trials.

Cost

One study assessed both capitalized and out-of-pocket costs as about US$1.8 billion and $870 million, respectively

Success Rates

A study conducted by the Tufts Center for the Study of Drug Development covering the 1980’s and 1990’s found that only 21.5 percent of drugs that started Phase I trials were eventually approved for marketing.^[9] Between 2006 to 2015, the success rate was 9.6 percent.

With all of this in mind, GWP which is based in Salisbury, United Kingdom, is the first company in the world to develop a prescription drug that is the first natural cannabis plant derivative to gain market approval in any country. GWP’s first product, Sativex®, is now approved in 28 countries for the treatment of multiple sclerosis spasticity.

According to GWP’s 2015 annual report, they describe several accomplishments after investing nearly a billion dollars since inception.

• GWP employs more than 350 staff, including over 300 in the UK, and in its emerging U.S. commercial and development operation to complement the UK scientific and manufacturing base expansion.
• GWP has research collaborations with 36 universities around the world.
• The UK commercial manufacturing facility has been inspected and approved by multiple regulatory authorities.
• Forty-four (44) Phase 2 and Phase 3 clinical trials were conducted and included over 4,379 patients.
• They conducted post-market safety studies involving over 1,000 patients.
• GWP’s research has led to over 80 publications in peer review journals.
• Evaluations of 14 distinct cannabinoids in pre-clinical research were completed.
• Over 45,000 patient-years of human safety data have been generated on cannabinoid medicines.
• Cannabinoids have been exported to 37 countries for research purposes.

With the successful completion of the Phase 3 Trial for Epidolex®, a new cannabidiol-based drug used to treat children with Dravet syndrome and Lennox-Gastaut syndrome (“LGS”) a rare form of childhood epilepsy, GWP’s next move for Epidolex is to gain approval from the FDA. It expects to submit a new drug application with the FDA in the first half of 2017. If approved, it would be a first—a plant-derived cannabinoid drug in the U.S. that hopefully forces the de-scheduling and removal of cannabis from the list of Control Substances.

There are several more new drugs in the pipeline for GWP in the U.S., below are some of the studies in progress.

• Phase 2a CBD schizophrenia study data shows positive proof-of-concept with a reassuring safety profile.
• Phase 2 CBDV epilepsy study in adults under way with data expected H2 2016.
• Neonatal Hypoxic-Ischemic Encephalopathy (“NHIE”) IV CBD Phase 1 clinical program expectedto commence in H1 2016.
• Clinical trials within the field of autism spectrum disorders expected to commence in H2 2016.
• Phase 1b/2a study for the treatment of Recurrent Glioblastoma Multiforme (“GBM”) fully enrolled with data expected in mid-2016.
• Phase 2 study in type-2 diabetes fully enrolled with data expected mid-2016.
• Phase 2 study of Sativex® in spasticity due to cerebral palsy ongoing with data expected mid 2016.

With so much at stake, CBE would be remiss in not following GWP and CEO Justin Gover, who recently relocated to the West Coast. One thing is for sure: GWP is in the middle of the bulls-eye for cannabis investors.