Bull Of The Day - GW Pharmaceuticals

GW Pharmaceuticals (GWPH - Free Report) is the $4 billion biotechnology company with the first FDA-approved cannabis-derived drug. Epidiolex was created and tested starting four years ago for the treatment of two rare forms of childhood epilepsy and launched commercially in November.

On August 6, GW Pharma delivered a bigger sales beat for Epidiolex than even the most optimistic analysts were projecting.

GWPH crushed the sales number for the treatment of two rare forms of pediatric epilepsy with $68 million vs. consensus of $45M. 

Analysts have been busy raising estimates and price targets (PT) after this big sales beat. Here's a sample...

Morgan Stanley: Analyst David Lebowitz raised his 2019 Epidiolex sales estimate to $291M from $165M after GW Pharmaceuticals report sales that "easily exceeded consensus" in the drug's second full quarter on the U.S. market. The analyst, who noted that significant adoption from adult patients continues and management continues to anticipate dose to increase as physicians become more comfortable administering, raised his price target on GW Pharmaceuticals shares to $238 and keeps an Overweight rating on the stock.

Oppenheimer: Analyst Esther Rajavelu raised her price target for GW Pharmaceuticals to $239 from $234 after the company reported Epidiolex revenues higher than estimates, representing 104% sequential growth, driven by new patients, favorable reimbursement, and increasing use among adult epilepsy patient in the quarter. The analyst reiterates an Outperform rating on the shares.

Stifel Nicolaus analysts raised their price target in a nominal gesture to $228 from $227. The team led by Paul Matteis was not that surprised by the sales beat given their extensive physician survey work that I shared with you last week. Here is a summary of their call...

They reiterate their Buy rating on impressive 2Q19 Epidiolex sales of $68MM, which were ~50% better than consensus of $44MM. Looking ahead they raise their 3Q/4Q Epidiolex estimates, and remain optimistic that the launch can continue to beat expectations into the latter half of the year as they believe management's guidance is conservative. 

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Disclosure: I own GWPH shares for the Zacks Healthcare Innovators portfolio.

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the more

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