What Makes GW Pharmaceuticals Stock a Buy?
Forget the GameStop craze – the cannabis industry is emerging as one of the fastest-growing industries in the world. New Frontier Data says cannabis sales in America may likely reach $41.5 billion by 2025 – making hemp stock investments a lucrative option for investors. Since its IPO in 2013, GW Pharmaceuticals (NASDAQ: GWPH) has witnessed skyrocketing growth. Known for its drug Epidiolex, the pharmaceutical company develops cannabinoid-based medicated drugs that have a high rate of success during clinical trials. GWPH is currently the sixth-largest hemp stock and its underlying business proves it’s on the brink of flying even higher – but what makes GW Pharmaceuticals stock a Buy?
If you had taken Cannin.com’s recommendation to buy GWPH stock back in November of 2020, you would have made a healthy 26% gain in just a couple of months
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Epidiolex: A Major Innovation in Cannabis
GW Pharmaceuticals is very popular for its cannabinoid-based drug called Epidiolex which is said to be 50% efficacious in treating and preventing seizures caused by two rare forms of epilepsy. As per claims, Epidiolex can treat tuberous sclerosis and treatment-resistant epilepsy. Where is it sold? Epidiolex is currently approved in the US, European Union, and Australia.
Due to its high affordability despite the pandemic in 2020, this product earned revenue of $378.6 million for the company in the first quarter itself that is nearly three times its previous year’s sales. As per estimates about 40,000-50,000 patients in the US and about two million patients around the globe can be treated using this innovative drug. Epidiolex’s patent isn’t expiring until 2035 which means the company still has more than a decade to encash this innovation. But does this alone make GW Pharmaceuticals stock a buy?
GW Pharmaceuticals: Solid Research Models
In business, it is often said that innovation is the key to success. This means that hemp stock investors need to take a serious look at cannabis companies that can successfully deliver innovative products to its customers. Now, apart from Epidiolex, the company also plans in using THC/CBD mixture, Nabiximols, in treating patients having multiple sclerosis.
Nabiximols has yet to obtain approval from the US Food and Drug Administration (FDA). However, more than 25 countries outside the US have approved it for its accuracy in treating patients. By the fourth quarter of 2020 and the first quarter of 2021, phase 3 trials will be carried out in the US – meaning an additional one million patients will be addressed if its phase 3 trials are successful.
The company has plenty of lofty goals for 2021. First, it anticipates conducting placebo-controlled trials using both CBDV and CBD in treating autism. Second, it wants to utilize an intravenous formulation of cannabidiol for advancing in the NHIE clinical program. In addtion, GW Pharma also aims to complete phase 1 trials for its novel botanical drug candidate GW541. Finally, it also wants to advance Phase 1 of the first novel NCE cannabinoid candidate. While this is all great news – does it mean I should buy GWPH stock?
GWPH: High Growth Trend in Revenues
GW Pharma has been achieving a huge surge in revenues due to the popularity of Epidiolex and its sales had almost tripled by the first quarter of 2020. In addition, in its fiscal third-quarter GWPH reported a solid $480 million in revenue. The company released its preliminary unaudited financial statement for its Q4 a few days ago and it anticipates a net sale of $526 million while the Epidiolex sales will reach around $510 million compared to 2019’s figure $296 million.
Epidiolex is an essential medicine and being essential means there are about 1100 independent pharmacies that had been instructed about the use of this drug. Now, looking at the current popularity of Epidiolex and other launches recently made by GW Pharma, it seems the innovative products have huge expansion opportunities ahead. In addition to this, the company’s cash balance of $486 million at the end of the year would be sufficient for venturing into future expansions.
Therefore, we believe 2021 is going to be really exciting for GW Pharma, and the company may experience more surges in revenues while entering a phase of sustained profitability soon. But does this make GW Pharmaceuticals hemp stock a buy?
Bottom Line: What Makes GW Pharmaceuticals Stock a Buy?
What makes GW Pharmacueticals stock a buy? Well, GW Pharma is expanding along with the high growth potential of cannabis industry as a whole. Although the company is not yet profitable, its staggering revenue growth puts it on a solid path to profitability. GWPH stock was trading at $90 on October 30, 2020, and is now at $152.47, up almost 70%.
Analysts have given GWPH a price target of $186.5, an upside of over 22%. Sure, you could bet on highly speculative stocks like GameStop or you can make more consistent gains with hemp stocks like GW Pharmaceuticals.
What Makes GW Pharmaceuticals Stock a Buy?
Cannin Investment Group: Your Hemp Stocks Experts
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