Pubdate: Fri, 28 Nov 2003 Source: Financial Times (UK) Copyright: The Financial Times Limited 2003 Contact: http://www.ft.com/ Details: http://www.mapinc.org/media/154 Cited: GW Pharmaceuticals http://www.gwpharm.com/ Bookmark: http://www.mapinc.org/find?323 (GW Pharmaceuticals) Bookmark: http://www.mapinc.org/mmj.htm (Cannabis - Medicinal) Approval Is Key for Cannabis Drugmaker Cannabis has been a controlled substance in the UK since 1971, despite anecdotal evidence of its benefits for those suffering from conditions such as multiple sclerosis. One in 700 people in the UK suffer from MS and the market potential for a drug treating the disease's symptoms seems obvious. However, on Monday, Cannacord Capital initiated coverage of GW Pharmaceuticals, whose Sativex treatment is the cannabinoid-based MS drug closest to market, with a "sell" recommendation. A spate of selling duly resulted, which yesterday sent the stock down 2.6 per cent to 189 1/2p, its lowest level since April. Regulatory approval is the key risk. In July's interims, GW suggested Sativex 's UK approval was likely by December 2003. However, Cannacord analyst Karl Keegan said approval was not the only factor. "Even if the drug is approved, the share price also reflects estimated peak sales of Pounds 250m," he said, suggesting that the "label", or terms of use, may only extend use to a specific group of MS sufferers, limiting potential profits. Julie Simmonds at Evolution Beeson Gregory added that political pressure may be necessary to force approval through. Although giving GW a fair value of 152p, Cannacord said UK approval would raise its target price to 160p, while failure to secure approval could send the stock plunging to just 36p. "Investors would do better to lock in any profits now, and await the final approval and label before reassessing," was Cannacord's conclusion. - --- MAP posted-by: Larry Stevens