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GW Pharmaceuticals plc Reports 2014 Q4 and Full Year Financial Results

LONDON, Dec. 2, 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 fourth quarter and year ended 30 September 2014.

"GW's business has transformed over the last year principally as a result of the rapid advance of our Epidiolex program to treat orphan syndromes in the field of childhood epilepsy. During 2014, we have raised significant capital from U.S. investors, commenced treatment of approximately 200 children, obtained encouraging clinical data, and commenced formal clinical development in the U.S.," stated Justin Gover, GW's Chief Executive Officer. "In 2015, we expect to complete much of the Epidiolex development program as well as start to build a U.S. commercial presence in anticipation of future launch. Beyond Epidiolex, we expect to report Phase 3 data from the Sativex cancer pain trials in early 2015 which, if positive, would enable the filing of NDA in the U.S. during next year. We also look forward to progressing multiple clinical trials for our cannabinoid product pipeline."

2014 HIGHLIGHTS:

  • Epidiolex® (cannabidiol or CBD) childhood epilepsy program
    • Company sponsored development programs in Dravet syndrome and Lennox-Gastaut syndrome (LGS)
      • Phase 2/3 Dravet syndrome trial commenced in October 2014. Part A on track to complete recruitment in December, with Part B expected to commence in Q1 2015
      • Additional Phase 3 Dravet syndrome trial and two LGS Phase 3 trials on track to commence in Q1 2015
      • Orphan Drug Designation granted by the U.S. Food and Drug Administration (FDA) for both Dravet syndrome and LGS, Fast Track Designation for Dravet syndrome
      • Orphan Drug Designation granted by the European Medicines Agency for Dravet syndrome
    • FDA authorized physician-led expanded access program
      • Clinical effect data on 58 treatment-resistant children and young adults released in October 2014 showing promising signals of efficacy and safety
      • Approximately 410 children and young adults now authorized for treatment with Epidiolex by FDA under 20 expanded access Investigational New Drug Applications (INDs)
      • Approximately 200 children now receiving Epidiolex treatment under expanded access INDs at 11 clinical sites in the U.S.
      • 6 patients being treated with Epidiolex under emergency INDs
    • State programs
      • State-based collaborations for Epidiolex clinical trials in epilepsy with the States of Georgia and New York
  • Sativex®:
    • First Phase 3 cancer pain trial recruitment complete and last patient due to exit study in December. Initial top-line data available in early 2015. Second Phase 3 trial recruitment due to complete Q1 2015 with data expected in Q2. Data intended to lead to a New Drug Application (NDA) filing with the FDA in H2 2015
    • Fast Track designation awarded by FDA for treatment of cancer pain
    • Special Protocol Assessment (SPA) ongoing with FDA for proposed Sativex Phase 3 trial in the treatment of spasticity due to Multiple Sclerosis
    • Agreement signed with Ipsen as exclusive distributor for Sativex in Latin America (excluding Mexico)
    • Sativex approved in 27 countries and available for use in 15 countries. In-market sales volumes sold by GW's commercial partners for the 2014 fiscal year increased by 50% over 2013
  • Cannabinoid pipeline product candidates
    • Additional epilepsy pipeline candidate GWP42006 (Cannabidivarin or CBDV), Phase 1 trial completed. Phase 2a trial due to commence H1 2015
    • Phase 1b/2a trial of GWP42002:GWP42003 in the treatment of glioma advancing to second phase. Safety data on initial cohort from first phase assessed by independent safety monitoring board with agreement to proceed into placebo-controlled phase; recent publication by St. Georges University London researchers suggesting a synergistic effect when combining cannabinoids with radiotherapy
    • Top line data from Phase 2a trial of GWP42003 extract for the treatment of ulcerative colitis show promising signals of efficacy in patients who completed course of treatment
    • Phase 2a trial of GWP42003 for the treatment of schizophrenia commenced in March 2014 with expected completion in H2 2015
    • Phase 2b trial of GWP42004 in type-2 diabetes commenced in March 2014 with expected completion in 2016

Financial Highlights

  • Total revenue for the year ended 30 September 2014 of £30.0m ($48.7m) compared to £27.3m ($44.3m) for the year ended 30 September 2013.
  • Net loss after tax for 2014 of £14.7m ($23.8m) compared to £4.5m ($7.4m) in 2013, which primarily reflects the impact of increased investment in R&D in 2014.
  • Two follow-on offerings of American Depositary Shares ("ADSs") on the NASDAQ Global Market raising total net proceeds after expenses of approximately $212 million (£126.3 million)
  • Cash and cash equivalents at 30 September 2014 of £164.5m ($266.8m) compared to £38.1m ($61.7m) as at 30 September 2013.

Conference Call and Webcast Information

The Company will host a conference call and webcast to discuss the 2014 fourth quarter and year-end financial results today at 8:00 a.m. ET / 1:00 p.m. GMT. 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 # 13595968.

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 27 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 is intended to support the submission of a New Drug Application for Sativex in cancer pain with the U.S. Food and Drug Administration and in other markets around the world. GW is also advancing an orphan drug program in the field of childhood epilepsy with a focus on Epidiolex®, which is in Phase 2/3 clinical development for the treatment of Dravet syndrome and which is also expected to enter Phase 3 clinical trials in the treatment of Lennox-Gastaut syndrome. GW has a deep pipeline of additional cannabinoid product candidates which 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 GW's 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.

Note Regarding Expanded Access Studies

Expanded access studies are uncontrolled, carried out by individual investigators, and not typically conducted in strict compliance with Good Clinical Practices, all of which can lead to a treatment effect which may differ from that in placebo-controlled trials. Data from these studies provide only anecdotal evidence of efficacy for regulatory review, contain no control or comparator group for reference and are not designed to be aggregated or reported as study results. Moreover, data from such small numbers of patients may be highly variable. Such information may not reliably predict data collected via systematic evaluation of the efficacy in company-sponsored clinical trials. Reliance on such information may lead to Phase 2 and 3 clinical trials that are not adequately designed to demonstrate efficacy and could delay or prevent GW's ability to seek approval of Epidiolex. Expanded access programs may provide supportive safety information for regulatory review. Physicians conducting these studies may use Epidiolex in a manner inconsistent with the protocol, including in children with conditions different from those being studied in GW-sponsored trials. Any adverse events or reactions experienced by subjects in the expanded access program may be attributed to Epidiolex and may limit GW's ability to obtain regulatory approval with labeling that GW considers desirable, or at all.

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
("GW" or "the Company" or "the Group")

Preliminary Results for the Fourth Quarter and Year Ended 30 September 2014

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 16 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®, which is approved for the treatment of spasticity due to multiple sclerosis (MS) in 27 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.

Beyond Sativex, GW is advancing an orphan drug program in the field of childhood epilepsy with a particular focus on Epidiolex®, a liquid formulation of pure plant-derived cannabidiol (CBD). Epidiolex has received Orphan Drug Designation from the FDA for Epidiolex for the treatment of both Dravet syndrome and Lennox-Gastaut syndrome (LGS), each of which are severe infantile-onset, genetic, drug-resistant epilepsy syndromes. GW has commenced a Phase 2/3 placebo-controlled clinical trial in patients with Dravet syndrome and expects to commence an additional Phase 3 trial in Dravet syndrome and two Phase 3 trials in LGS in the first quarter of 2015.

In addition, GW's cannabinoid platform offers a deep pipeline of additional product candidates including distinct clinical-stage candidates targeting epilepsy (CBDV), glioma, ulcerative colitis, schizophrenia and type-2 diabetes.

U.S. Follow-on Offerings

In 2014, GW successfully completed two follow-on offerings on the NASDAQ Global Market. In January, GW issued a total of 2,807,275 American Depositary Shares ("ADSs") at a price of $36.00 per ADS. In June, the Company issued a total of 1,455,000 ADSs at a price of $86.83 per ADS. Total net proceeds for these two offerings after expenses were approximately $212 million (£126.3 million). The funds raised in these offerings are primarily intended to advance the clinical development of Epidiolex, to support pre-launch commercial activities for Epidiolex in the U.S., 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.

Epilepsy Drug Development Programs

GW is currently focused on two epilepsy development programs that represent important product candidates within GW's epilepsy franchise and have the potential to yield a variety of individual orphan indications providing GW with significant new market opportunities. These programs are for Epidiolex, a liquid formulation of pure plant-derived CBD, and GWP42006, which features cannabidivarin (CBDV). These development programs are funded completely by GW and GW retains all rights to commercialize any and all products that evolve from these programs.

Epidiolex®

GW has conducted extensive pre-clinical research with 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 now undertaking a formal development program for Epidiolex in the field of severe, drug-resistant childhood epilepsy. The Company has received Orphan Drug Designation from the FDA for Epidiolex for the treatment of both Dravet syndrome and LGS. Additionally, GW has received Fast Track Designation from the FDA and Orphan Designation from the European Medicines Agency (EMA) for Epidiolex for the treatment of Dravet syndrome.

In October 2014, GW commenced a placebo-controlled Phase 2/3 clinical trial in Dravet syndrome. This Phase 2/3 trial is a two-part, randomized double-blind, placebo-controlled parallel group, 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. Part two is the Phase 3 element of the trial which will compare the effect of Epidiolex with that of placebo. In addition to this Phase 2/3 trial, GW expects to commence an additional Phase 3 trial in Dravet syndrome and two Phase 3 trials in LGS in the first quarter of 2015.

In parallel with the Company's formal clinical trial program, the FDA has granted 20 expanded access INDs and 7 individual emergency INDs to independent investigators in the U.S. to treat a total of approximately 410 children and young adults suffering from intractable epilepsy with Epidiolex. To date, approximately 200 children and young adults are now receiving treatment with Epidiolex in the U.S. at 11 clinical sites. Enrolment in this program has accelerated in recent months and GW expects this rate of enrolment to continue into the first half of 2015. Patients being treated in the expanded access program suffer from a range of treatment-resistant epilepsies. In the emergency cases, GW has responded to, and the FDA has approved, emergency treatment requests from physicians for children hospitalized as a result of severe and potentially life-threatening seizures. So far as GW is aware, 6 of the 7 children treated under emergency INDs remain on Epidiolex treatment.

Trials conducted under 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. Moreover, data from such small numbers of patients may be highly variable. Information obtained from these INDs may not reliably predict data collected via systematic evaluation of efficacy in our sponsored clinical trials. Such studies are carried out by individual investigators and not conducted in strict compliance with Good Clinical Practice.

In October 2014, GW reported clinical effect data on 58 patients who had reached 12 weeks of treatment as well as safety data on 151 patients (58 patients with 12 weeks treatment plus an additional 93 patients who had yet to reach 12 weeks treatment). These data were made available to GW from the independent physicians conducting these studies.

Highlights from these data include:

  • Data on 58 patients with a wide range of drug-resistant epilepsies treated with Epidiolex show a median overall reduction in total seizure frequency of 40% after 12 weeks treatment. 43% of patients obtained a greater than 50% reduction in total seizure frequency.
  • 12 patients with Dravet syndrome reported a median overall reduction in convulsive seizure frequency of 51% after 12 weeks treatment. 58% of patients with Dravet syndrome obtained a greater than 50% reduction in convulsive seizure frequency.
  • Approximately 95% of patients who have commenced treatment with Epidiolex remain on therapy.
  • The most common adverse events were somnolence and fatigue – 19% and 11% respectively

Commenting on the data, Dr. Elizabeth Thiele, Director of the Pediatric Epilepsy Program at Massachusetts General Hospital and Harvard Professor of Neurology, said, "I am very encouraged with the preliminary results from our open-label study of Epidiolex. I think they show very promising signals of safety and efficacy in patients, which include some of the most difficult epilepsy cases we follow in our program. Based on my experience thus far, I believe that Epidiolex has the potential to be an important advance in treatment for these treatment-resistant children and will likely have a significant role as a future therapy. I believe these data fully support advancing into formal clinical development, and we are very excited to participate with GW in the upcoming placebo-controlled trials in Dravet and Lennox-Gastaut syndromes."

GWP42006 - CBDV (cannabidivarin)

Separately, GW is developing GWP42006, which features the non-psychoactive cannabinoid CBDV extracted from the cannabis plant. CBDV is similar in chemical structure to CBD and has also shown anti-epileptic properties across a range of in vitro and in vivo models of epilepsy. GW has completed a Phase 1 clinical trial of GWP42006. In this Phase 1 trial of 66 healthy subjects, GWP42006 demonstrated no safety or toxicity signals. CBDV was well tolerated even at the highest tested dose and no significant side effects were observed. There were no serious or severe adverse events, nor any withdrawals due to adverse events. GW expects to commence a Phase 2 study of GWP42006 in patients with epilepsy in the first half of 2015.

GW has rights to a portfolio of intellectual property covering CBD and CBDV in epilepsy. This portfolio, as at 1 November 2014, includes fourteen patent families containing one or more pending and/or issued patents with claims related to the use of CBD and/or CBDV in the treatment of epilepsy as well as compositions, extraction techniques, CBD and CBDV extracts and pure plant-derived CBD.

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 ("THC"), and CBD. GW is currently evaluating Sativex in a Phase 3 clinical 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.

Sativex trials in the U.S. are 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 (380 patients per trial) and are intended to support the submission of an NDA with the FDA for Sativex and in other markets around the world. Patient recruitment in the first Phase 3 trial has completed and recruitment in the second Phase 3 trial is expected to complete in the first quarter of 2015. GW anticipates top-line results from the first pivotal Phase 3 trial will be available in early 2015. Top-line results from the second pivotal Phase 3 trial are expected in the second quarter of 2015.

The results of the third phase 3 trial are not intended to be included in the initial regulatory filings if the results of the first two pivotal Phase 3 trials provide a sufficient basis to demonstrate the safety and efficacy of Sativex in the target indication. In the event that either of the initial two Phase 3 trials do not provide sufficient evidence of efficacy, it is GW's intention that this third Phase 3 trial be included in the Sativex NDA filing assuming the data is supportive. The third Phase 3 trial differs in design from the first two trials, employing a two-part "enriched trial design" akin to that which was successfully employed in the European MS spasticity trials program. The trial involves exposing 540 patients to Sativex in a two-week single-blind phase, or Phase A, following which responders will be randomized either to stay on Sativex or switch to placebo in a double- blind phase for a five-week treatment period, or Phase B. The primary efficacy analysis will be the mean change from baseline in Phase B as measured using a 0 to 10 numeric rating scale (NRS). The trial is designed to enrol 216 patients in Phase B.

Sativex has 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. The costs of the Phase 3 cancer pain program are fully funded by Otsuka Pharmaceutical Co. Ltd, who hold exclusive rights to commercialize Sativex in the U.S.

Sativex in MS Spasticity

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 spasticity and it is widely recognized that pre-Sativex available oral treatments afford only partial relief and have unpleasant side effects. Sativex offers the prospect of treating patients who have failed existing oral therapies and who might otherwise require invasive and costly alternative treatment options.

Sativex is currently approved as a treatment for MS spasticity in 27 countries outside of the U.S. and is currently available on prescription in 15 countries. In 2014, GW expanded its Sativex commercial partnerships with an exclusive agreement for Ipsen to promote and distribute Sativex in Latin America (excluding Mexico and the Islands of the Caribbean).

GW believes that MS spasticity represents an attractive indication for Sativex in the U.S. and has submitted to the FDA a request for Special Protocol Assessment, or SPA, of a single Phase 3 study protocol, for which the Company has not yet reached agreement. Subject to reaching agreement with the FDA, GW expects to commence the trial in 2015. If the trial is conducted and is successful, GW intends to submit the results, along with the ex-U.S. clinical data collected in our clinical development program for MS spasticity to date, in an NDA for MS spasticity.

As with the U.S. Phase 3 cancer pain development program, GW expects the costs of the Phase 3 MS program to be fully funded by Otsuka.

Other Cannabinoid Platform Pipeline Programs

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. Glioblastoma is particularly difficult to treat and claims the lives of about 5,200 people each year. It also has a particularly poor prognosis as the rate of survival after five years of patients' diagnosis is around 10%.

In pre-clinical models, GW has shown these two cannabinoids when administered together to be orally active in the treatment of gliomas and have shown tumor response to be positively associated with tissue levels of cannabinoids.

In 2014, GW commenced a Phase 1b/2a clinical trial in 20 patients with recurrent GBM. The first phase of this trial was an open-label safety evaluation of GWP42002:GWP42003 in combination with temozolomide. This phase, comprising two cohorts of three patients each completing two cycles (months) of treatment is now complete. Safety data from these initial patient cohorts has been assessed by the independent safety monitoring board and their approval has been given to proceed into a placebo-controlled phase which has recently commenced randomization.

A recent study carried out in collaboration with GW by specialists at St George's, University of London, was the first to show a dramatic effect on brain tumours when combining cannabinoids with irradiation. This research, published in Molecular Cancer Therapeutics, showed that tumour growth in mouse brain was significantly slowed when a combination of THC and CBD was used with irradiation and tumour inhibition was higher than observed with irradiation alone.

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.

In October 2014, GW reported preliminary top line results from 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 UC in patients who had not been able to gain remission from the condition despite first line treatment with salicylates, and in some cases immunosuppressive therapy. 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 was the percentage of participants achieving remission quantified by the MAYO score and the study also included a range of secondary endpoints in particular focusing on benefits for subjects on symptom control, as well as other related secondary measures. While the study did not meet the primary endpoint, data from this 60 patient study showed promising signals of efficacy across a range of secondary endpoints in patients who completed the course of treatment. Thirteen patients withdrew from the study due to adverse events on drug (most of these withdrawals were due to minor THC-related adverse events such as dizziness), compared with seven on placebo.

GW believes that, in patients who were able to take GWP42003 for a prolonged treatment period, these results provide good evidence for a therapeutic effect in the treatment of UC in patients who had previously failed to respond to first line therapy. In addition, GW believes that the results support further investigation of GWP42003 albeit with a modified dosage form.

Schizophrenia

Schizophrenia is a chronic disease that manifests through disturbances of perception, thought, cognition, emotion, motivation and motor activity. Over a lifetime, about 1% of the population will develop schizophrenia. 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 dopamine D2 receptor augmentation of standard antipsychotics and therefore has the potential to offer a novel treatment option in this therapeutic area.

In March 2014, GW commenced a Phase 2a trial of GWP42003 in the treatment for schizophrenia. This study is expected to enrol approximately 80 patients with an estimated completion date of the second half of 2015.

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 enrol approximately 200 patients with an estimated completion date in 2016.

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.

GW Pharmaceuticals plc
Consolidated income statement
For the three months and year ended 30 September 2014
Year ended Year ended Year ended
30 September 30 September 30 September
Notes 2014 2014 2013
$000's £000's £000's
Revenue 3 48,730 30,045 27,295
Cost of sales (3,341) (2,060) (1,276)
Research and development expenditure 4 (70,512) (43,475) (32,697)
Management and administrative expenses (11,899) (7,337) (3,555)
Net foreign exchange gain/(loss) 5,170 3,188 (237)
Operating loss (31,852) (19,639) (10,470)
Interest expense (99) (61) (64)
Interest income 210 130 178
Loss before tax (31,741) (19,570) (10,356)
Tax benefit 6 7,965 4,911 5,807
Loss for the year (23,776) (14,659) (4,549)
Loss per share
- basic 7 (11.3)c (7.0)p (3.0)p
- diluted 7 (11.3)c (7.0)p (3.0)p
Three months Three months Three months
ended ended ended
30 September 30 September 30 September
2014 2014 2013
$000's £000's £000's
Revenue 12,032 7,419 7,121
Cost of sales (680) (419) (351)
Research and development expenditure (19,898) (12,269) (9,165)
Management and administrative expenses (2,991) (1,844) (763)
Net foreign exchange gain/(loss) 8,777 5,411 (278)
Operating loss (2,760) (1,702) (3,436)
Interest payable (4) (2) (19)
Interest income 81 50 67
Loss on ordinary activities before taxation (2,683) (1,654) (3,388)
Tax benefit 3,140 1,936 736
Profit/(loss) on ordinary activities after taxation 457 282 (2,652)
Earnings/(loss) per share
- basic 0.2c 0.1p (1.5)p
- diluted 0.2c 0.1p (1.5)p
GW Pharmaceuticals plc
Consolidated balance sheet
As at 30 September 2014
30 September 30 September 30 September
Notes 2014 2014 2013
$000's £000's £000's
Non-current assets
Intangible assets - goodwill 8,450 5,210 5,210
Property, plant & equipment 18,877 11,639 5,476
Deferred tax asset1 449 277 895
27,776 17,126 11,581
Current assets
Inventories 8 7,748 4,777 4,661
Taxation recoverable 8,517 5,251 2,900
Trade and other receivables 9 3,012 1,857 1,733
Cash and cash equivalents 266,788 164,491 38,069
286,065 176,376 47,363
Total assets 313,841 193,502 58,944
Current liabilities
Trade and other payables 10 (20,073) (12,376) (9,440)
Obligations under finance leases 12 (204) (126) (100)
Deferred revenue 11 (7,829) (4,827) (3,181)
(28,106) (17,329) (12,721)
Non-current liabilities
Trade and other payables 10 (12,857) (7,927)
Obligations under finance leases 12 (2,889) (1,781) (1,905)
Deferred revenue 11 (12,782) (7,881) (8,916)
Total liabilities (56,634) (34,918) (23,542)
Net assets 257,207 158,584 35,402
Equity
Share capital 13 384 237 178
Share premium account 357,712 220,551 84,005
Other reserves 31,238 19,260 20,184
Retained earnings (132,127) (81,464) (68,965)
Shareholders' funds 257,207 158,584 35,402
1Deferred tax asset as at 30 September 2013 has been reclassified from current assets to non-current assets.
This announcement was approved by the Board of Directors on 2 December 2014.
GW Pharmaceuticals plc
Consolidated statement of changes in equity
For the year ended 30 September 2014
Share
Share Premium Other Accumulated
Capital Account Reserves Deficit Total
£000's £000's £000's £000's £000's
At 1 October 2012 133 65,947 20,184 (65,032) 21,232
Issue of share capital 45 19,725 19,770
Expenses associated with new equity issue (1,670) (1,670)
Exercise of share options 3 3
Share-based payment transactions 616 616
Loss for the year (4,549) (4,549)
Balance at 30 September 2013 178 84,005 20,184 (68,965) 35,402
Issue of share capital 51 127,315 127,366
Expenses associated with new equity issue (1,067) (1,067)
Exercise of share options 4 5,014 5,018
Exercise of warrants 4 5,284 (922) 922 5,288
Share-based payment transactions 1,238 1,238
Loss for the year (14,659) (14,659)
Other comprehensive expense (2) (2)
Balance at 30 September 2014 237 220,551 19,260 (81,464) 158,584
Consolidated statement of comprehensive income
For the year ended 30 September 2014
Year ended Year ended
30 September 30 September
2014 2013
£000's £000's
Loss for the year (14,659) (4,549)
Items that may be reclassified subsequently to profit or loss
Exchange differences on retranslation of foreign operations (2)
Other comprehensive expense for the year (2)
Total comprehensive expense for the year (14,661) (4,549)
GW Pharmaceuticals plc
Consolidated cash flow statement
For the year ended 30 September 2014
Year ended Year ended Year ended
30 September 30 September 30 September
2014 2014 2013
$000's £000's £000's
(Loss)/profit for the year (23,775) (14,659) (4,549)
Adjustments for:
Interest payable 99 61 64
Interest income (211) (130) (178)
Tax (7,965) (4,911) (5,807)
Depreciation of property, plant and equipment 2,267 1,398 989
Net foreign exchange gains (3,043) (1,876) (25)
(Decrease)/increase in allowance for doubtful debts (26)
Decrease in provision for inventories (662) (408) (530)
Share-based payment charge 2,008 1,238 616
Losses on disposal of property, plant and equipment 3 2
(31,279) (19,285) (9,446)
Decrease/(increase) in inventories 473 292 (594)
(Increase) / decrease in trade receivables and other assets (230) (142) (108)
Increase / (decrease) in trade and other payables and deferred revenue 5,398 3,328 (152)
Cash (used in)/generated by operations (25,638) (15,807) (10,300)
Research and development tax credits received 5,159 3,181 2,832
Net cash (outflow)/inflow from operating activities (20,479) (12,626) (7,468)
Investment activities
Interest received 235 145 167
Purchases of property, plant and equipment (11,765) (7,254) (2,243)
Proceeds from sale or property, plant and equipment 23 14
Net cash outflow from investing activities (11,507) (7,095) (2,076)
Financing activities
Proceeds on exercise of share options 8,139 5,018 3
Proceeds of new equity issue 206,577 127,367 19,770
Expenses of new equity issue (1,731) (1,067) (1,670)
Proceeds of warrant exercise 8,577 5,288
Interest paid (99) (61) (64)
Proceeds from fit out funding 12,687 7,822
Proceeds from finance leases 225
Capital element of finance leases (162) (100) (11)
Net cash from financing activities 233,988 144,267 18,253
Effect of foreign exchange rate changes 3,043 1,876 25
Net increase in cash and cash equivalents 205,045 126,422 8,734
Cash and cash equivalents at beginning of year 61,743 38,069 29,335
Cash and cash equivalents at end of year 266,788 164,491 38,069

Source:GW Pharmaceuticals plc