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GW Pharmaceuticals plc Reports 2014 Third Quarter Financial Results

LONDON, Aug. 6, 2014 (GLOBE NEWSWIRE) -- 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 (£69.5 million)
  • Advancement of Epidiolex® (Cannabidiol or CBD) childhood epilepsy program:
    • 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
    • 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
    • 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
    • State Programs
      • Initiatives announced with States of Georgia and New York to collaborate with GW on state-based Epidiolex clinical trials in epilepsy
  • Sativex® program developments:
    • 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
    • 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.
    • Special Protocol Assessment (SPA) ongoing with the FDA for proposed Sativex Phase 3 trial in the treatment of Multiple Sclerosis (MS) spastici
  • Significant additional on-going clinical trial activity for cannabinoid pipeline product candidates:
    • Advancement of Cannabidivarin (CBDV) epilepsy program with a Phase 2 trial expected to commence at end of 2014/early 2015
    • Phase 2a trial of GWP42003 for the treatment of ulcerative colitis recruitment complete - data expected H2 2014
    • 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
    • Phase 2a trial of GWP42003 for the treatment of schizophrenia commenced in March 2014 with expected completion in H2 2015
    • 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 £7.6 million ($13.0 million) compared to £7.3 million for the three months ended 30 June 2013
  • Loss for the three months ended 30 June 2014 of £6.9 million ($11.9 million) compared to a loss of £2.0 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 £168.3 million ($287.8 million) compared to £38.1 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.

Quarterly Management's Discussion and Analysis (MD&A)

A complete MD&A of GW's business and financial operations for the third quarter 2014 has been filed with the London Stock Exchange as a Regulatory News Item and will be filed with the U.S. Securities and Exchange Commission today on Form 6-K.

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®, 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® 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® and Epidiolex® 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.

Enquiries:

GW Pharmaceuticals plc (Today) +44 20 3727 1000
Justin Gover, Chief Executive Officer (Thereafter) + 44 1980 557000
Stephen Schultz, VP Investor Relations (U.S.) 917 280 2424 / 401 500 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
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 Jun 30 Jun 30 Jun
2014 2014 2013
$000's £000's £000's
Revenue 13,019 7,611 7,258
Cost of sales (1,098) (642) (267)
Research and development expenditure (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 (5.5c) (3.2p) (1.3p)
– diluted (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 Jun 30 Jun 30 Jun
2014 2014 2013
$000's £000's £000's
Revenue 38,702 22,626 20,173
Cost of sales (2,805) (1,640) (925)
Research and development expenditure (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 (12.7c) (7.4p) (1.3p)
– diluted (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
£000's £000's £000's £000's £000'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 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 Jun 30 Jun 30 Sep
2014 2014 2013
Non-current assets $000's £000's £000'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 Jun 30 Jun 30 Jun
2014 2014 2013
$000's £000's £000'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

Source:GW Pharmaceuticals plc