Tag Archives: GWPH

Despite Losing $88 Million in Q2, This Pot Stock Still Has More Cash Than Any of Its Peers

The marijuana industry may be growing at an exceptionally fast pace, but that doesn’t mean it’s exempt from challenges. Chief among those challenges for marijuana stocks is securing the capital needed to build their businesses.

You see, most pot companiesdon’t have access to basic banking servicessuch as lines of credit, loans, or even something as simple as a checking account. The reason for this (at least in the U.S.) is simple: Cannabis is an illegal drug. Because of that, financial institutions fear the monetary and/or legal repercussions of providing banking services to businesses involved in the cannabis industry. This can leave marijuana stocks in a bit of a bind, especially since many of them still are losing money.

A cannabis bud lying atop a messy pile of hundred dollar bills.

Image source: Getty Images.

This pot stock has a fat wallet

However, one pot business has built itself quite the mountain of cash. In fact, even after losing $88 million in its recently reported second-quarter results, this company still has far more in cash and cash equivalents than the next-closest cannabis company. Ladies and gentlemen, this cash kingpin is none other than cannabinoid-based drugmaker GW Pharmaceuticals (NASDAQ:GWPH).

Last Tuesday, May 8, GW Pharmaceuticals announced $3.35 million in sales, predominantly tied to Sativex, a cannabinoid-based drug approved in more than a dozen European countries to treat spasticity associated with multiple sclerosis (MS). However, considerably higher research and development expenditures, sales, general, and administrative expenses, and net foreign exchange losses relative to Q2 2017 pushed the company’s net loss to $88 million for the quarter.

Yet in spite of its massive quarterly loss, U.K.-based GW Pharmaceuticals ended Q2 with $487.2 million in cash and cash equivalents. That’s up by almost 44% from the prior-year quarter, inclusive of its $88 million loss.

By comparison, the next-closest pot stocks in terms of cash and cash equivalents are Canadian cannabis growers, including Aurora Cannabisand Canopy Growth Corp. Aurora Cannabis and Canopy Growth have approximate cash balances of $332.8 million and $311.2 million, respectively, at their disposal as of the latest quarter, inclusive of any reported capital raises via bought-deal offerings. That’s how far ahead of the field GW Pharmaceuticals is in terms of total cash balance.

A researcher examining liquid in a lab setting.

Image source: GW Pharmaceuticals.

Why GW Pharmaceuticals needs so much cash

You might be wondering why a company like GW Pharmaceuticals needs so much cash. It essentially boils down to two reasons.

1. The expected launch and marketing of Epidiolex

To begin with, GW Pharmaceuticals is preparing for the commercial launch of Epidiolex, a cannabidiol (CBD)-based treatment for two rare types of childhood-onset epilepsy — Dravet syndrome and Lennox Gastaut syndrome. CBD is the non-psychoactive component of the cannabis plant, best known for its medical benefits.

In a handful of phase 3 studies, Epidiolex handily met its primary endpoint, which was to produce a statistically significant reduction in seizure frequency from baseline relative to the placebo. In one pivotal study for Dravet syndrome, the reduction in seizure frequency from baseline was 39%, which was three-times greater than the 13% reduction produced by the placebo.

What’s more, the Food and Drug Administration’s (FDA) advisory panel recently reviewed the clinical data for Epidiolex as presented in its new drug application and voted unanimously that it should be approved. Understand the FDA isn’t required to follow the advice of its panel, but it tends to do so more often than not.

With a PDUFA decision date set for June 27 and a better than 50-50 shot at approval, GW Pharmaceuticals needs its cash, in my opinion, to launch and market Epidiolex in the hope of one day growing it into a blockbuster drug.

A biotech lab researcher using a dropper with test tubes.

Image source: Getty Images.

2. The expansion of GW Pharmaceuticals’ portfolio and pipeline

The other reason GW Pharmaceuticals needs so much cash is to run additional clinical studies to expand its pipeline and product portfolio. That’s the thing about drug developers — the spending on research never stops.

For example, part of the thesis for turning Epidiolex into a blockbuster drug is label-expansion opportunities. Midstage trials are underway that are examining its use as a treatment for infantile spasms. Also, phase 3 studies for tuberous sclerosis involving Epidiolex are ongoing, with a data readout expected in the first half of 2019.

Beyond Epidiolex, GW Pharmaceuticals has an array of early-stage, midstage, and late-stage studies to run with. Sativex for spasticity in MS is being examined in a late-stage U.S. study, while GWP42006, a promising cannabidivarin-based compound, is being looked at as a possible treatment for epilepsy and autism spectrum disorders.

Having plenty of cash on hand ensures that these studies will be run without shareholders worrying about a cash crunch.

A businessman holding up a card that reads, FDA approved.

Image source: Getty Images.

Epidiolex is what matters (for now)

For the time being, though, all eyes are on Epidiolex and its expected approval and launch. Some Wall Street firms believe Epidiolex has the potential to cross $1 billion in peak annual sales. After all, it’s on track to be the first approved treatment for Dravet syndrome and a clearly beneficial treatment for Lennox-Gastaut patients.

The big question is: Will this first-to-market advantage hold up against the competition? To that end, I’m not entirely certain.

Back in September, drug developer Zogenix (NASDAQ:ZGNX) announced data from ZX008 in late-stage trials that absolutely wowed Wall Street. ZX008, which is a low-dose fenfluramine, led to a 72.4% reduction in seizure frequency from baseline over a 14-week testing period. This compared very favorably with a 17.4% reduction in seizure frequency from baseline observed with the placebo.

Though Zogenix’s drug and Epidiolex haven’t gone head-to-head, it might be difficult for physicians and patients to overlook the strength of these results. Plus, Zogenix has plans to expand ZX008 into Lennox-Gastaut, as well.

In short, even with all of its cash and a likely FDA approval for Epidiolex, GW Pharmaceuticals isn’t guaranteed success. That’s something shareholders should keep in mind.

Hot Services Companies To Buy For 2016

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Toward the end of trading Monday, the Dow traded up 0.30 percent to 17,265.33 while the NASDAQ gained 0.21 percent to 4,758.56. The S&P also rose, gaining 0.05 percent to 2,023.11.

Leading and Lagging Sectors

On Monday, cyclical consumer goods & services shares gained by 0.41 percent. Top gainers in the sector included Kandi Technologies Group Inc (NASDAQ: KNDI), Starwood Hotels & Resorts Worldwide Inc (NYSE: HOT), and Lifetime Brands Inc (NASDAQ: LCUT).

Hot Services Companies To Buy For 2016: The Hain Celestial Group, Inc.(HAIN)

 

The Hain Celestial Group, Inc. manufactures, markets, distributes, and sells organic and natural products in the United States, the United Kingdom, Canada, and Europe. Its grocery products include infant formula; infant, toddler, and kids foods; diapers and wipes; rice and grain-based products; flour and baking mixes; breads, hot and cold cereals, pasta, condiments, cooking and culinary oils, granolas, granola bars, and cereal bars; canned, chilled fresh, aseptic, and instant soups; Greek-style yogurt; chilies and packaged grains; and chocolates and nut butters, as well as plant-based beverages and frozen desserts, such as soy, rice, almond, and coconut. The companys grocery products also comprise juices, hot-eating, chilled and frozen desserts, cookies, crackers, gluten-free frozen entrees and bars, frozen pastas and ethnic meals, frozen fruits and vegetables, cut fresh fruits, refrigerated and frozen soy protein meat-alter native products, tofu, seitan and tempeh products, jams, fruit spreads and jelly, honey, marmalade, and other food products. In addition, it provides snack products, such as potato, root vegetable, and other vegetable chips, as well as straws, tortilla chips, whole grain chips, pita chips, puffs, and popcorn; specialty teas, including herbal, green, black, wellness, rooibos, and chai tea lattes; ready-to-drink beverages comprising organic kombucha and chai tea lattes; personal care products consisting of skin, hair and oral care, deodorants, baby care items, acne treatment, body washes, and sunscreens; and poultry and protein products, such as turkey and chicken products. The company sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, and drug and convenience stores in approximately 70 countries worldwide. The Hain Celestial Group, Inc. was founded in 1993 and is headquartered in Lake Success, New York.

Advisors’ Opinion:

  • [By Motif Investing]

    The motif also has received some help from component Hain Celestial Group Inc (NASDAQ: HAIN), which has seen its stock rise 3.2 percent in the past month following the company’s earnings report last month, which underperformed profit expectations but no doubt helped prompt the company to announce a renewed focus on the bottom line.

Hot Services Companies To Buy For 2016: Rockwell Medical Technologies Inc.(RMTI)

Rockwell Medical Technologies, Inc. manufactures, sells, and distributes hemodialysis concentrate solutions and dialysis kits primarily in the United States, Latin America, Asia, and Europe. The company?s hemodialysis product duplicates kidney function in patients with failing kidneys, known as end stage renal disease, an advanced stage of chronic kidney disease; and dialysis solutions are used to maintain life, remove toxins, and replace nutrients in the dialysis patient?s bloodstream. Its products include Renal Pure and CitraPure liquid acid concentrate, Dri-Sate dry acid concentrate and mixing systems, RenalPure powder bicarbonate concentrate, and SteriLyte liquid bicarbonate concentrates; and various ancillary products comprising blood tubing, fistula needles, specialized custom kits, dressings, cleaning agents, filtration salts, and other supplies. The company also has a license to manufacture and sell soluble ferric pyrophosphate (SFP), a Phase III clinical trial p r oduct to improve the treatment of dialysis patients with iron deficiency. Rockwell Medical Technologies sells its products to domestic hemodialysis providers through direct sales people and independent sales representation companies, as well as through independent sales agents and distributors internationally. The company was founded in 1995 and is based in Wixom, Michigan.

Advisors’ Opinion:

  • [By Lisa Levin]

    Thursday morning, the healthcare sector proved to be a source of strength for the market. Leading the sector was strength from Keryx Biopharmaceuticals (NASDAQ: KERX) and Rockwell Medical Inc (NASDAQ: RMTI).

10 Best Cheapest Stocks To Invest In 2016: Fossil Inc.(FOSL)

Fossil, Inc. designs, develops, markets, and distributes fashion accessories worldwide. It offers a line of fashion watches under its proprietary brands, such as FOSSIL, MICHELE, RELIC, and ZODIAC; and through licensed brands, including ADIDAS, BURBERRY, DIESEL, DKNY, EMPORIO ARMANI, MARC BY MARC JACOBS, and MICHAEL KORS. The company designs, markets, and arranges for the manufacture of watches and accessories on behalf of certain mass market retailers, companies, and organizations as private label products or as premium and incentive items for use in various corporate events. It also provides various fashion accessories for men and women, including handbags, belts, small leather goods, jewelry, and sunglasses through company owned retail stores, department stores, and specialty retail stores, as well as over the Internet and through catalogs. In addition, the company sells a line of soft accessories, such as hats, gloves, and scarves, as well as a handbag collection. Furt her, it offers apparel comprising jeans, outerwear, fashion tops and bottoms, and tee shirts for men and women through company-owned stores, as well as over the Internet and through catalogs. Additionally, the company provides footwear products, including sport court sneakers, authentic casuals, dress classics, and boots for men, as well as fashionable flats, heels, wedges, and boots for women. Fossil, Inc., through a license agreement with the Safilo Group, manufactures, markets, and sells optical frames under the FOSSIL and RELIC brand names in the United States and Canada. As of August 9, 2011, it had approximately 360 company-owned and operated retail stores. The company was founded in 1984 and is headquartered in Richardson, Texas.

Advisors’ Opinion:

  • [By Monica Gerson]

    Fossil Group Inc (NASDAQ: FOSL) is estimated to post its quarterly earnings at $0.15 per share on revenue of $666.60 million.

    Nokia Corp (ADR) (NYSE: NOK) is expected to report its quarterly earnings at $0.04 per share on revenue of $6.24 billion.

  • [By Monica Gerson]

    Fossil Group Inc (NASDAQ: FOSL) reported downbeat results for its first quarter and issued a weak earnings forecast for the current quarter. Fossil shares tumbled 30.92 percent to $27.70 in pre-market trading.

  • [By Johanna Bennett]

    It could be painful watching Fossil Group (FOSL) tomorrow. The share price plunged almost 30% during after hour market action after the fashion watch maker posted disappointing 1Q financial results, warned of a weak 2Q and slashed its full-year forecasts.

    Fossil now expects sales in 2016 to drop between 1.5% and 5% compared to its former range of an 1% increase to a 3.5% decline. Full-year EPS estimates also dropped, with Fossil expecting to earn between $1.80 and $2.80, down from the old guidance of $2.80 to $3.60.

    Currency headwinds seem to have played havoc with 1Q results, impacting net sales by $16.4 billion and reducing EPS by 8 cents. Fossil earned 12 cents a share on revenue of $659.8 million, which missed the Streets forecast of 15 cents a share on revenue of $667 million. The strength of the U.S. dollar was to blame,.

    During the current quarter, Fossil expects per share earnings to range from break even to 15 cents a share, as net sales drop between 8% and 10%.