GW Pharmaceuticals (GWPH: NASDAQ) was given notice today that their drug, Sativex, which is used for treating spasticity in multiple sclerosis was rejected by The National Institute for Health and Care Excellence (NICE) because apparently it is not cost-effective.
NICE said that the modest benefits did not justify the high cost of Sativex. During the review, the agency concluded that the drug was not worth using. The average patient usually takes four sprays of Sativex a day, which costs around $8.95. For some patients the cost could be higher, since the maximum daily limit is 12 sprays.
Sativex won a UK regulatory license around five years ago and is currently approved in over 20 countries. However, as with other drugs in the UK a key determinant in how widely the drug will be used is the view of NICE.
“There are better ways to improve care for people with MS,” said Paul Cooper, a consultant neurologist at the Greater Manchester Neuroscience Centre, who chaired the guideline group.
The market has seen a surge in the interest for cannabis as a therapeutic treatment since the passing of recreational marijuana in Colorado and Canada’s move to legalize medical marijuana at the federal level.
Shares of GWPH have not reacted favorably to this news and are down over 1.5% in pre-market trading. GWPH hit a record high earlier this year when another one of their drugs, Epidiolex, produced promising results in children with hard-to-treat epilepsy. Since then, shares have sold off over 25% and are looking for a bottom. Technical420 has a favorable view on the long term outlook of GWPH and think this just a hiccup. GWPH trades on the NASDAQ exchange, has Wall Street coverage (Bank of America and Morgan Stanley both have Buy ratings on GWPH), and they have high institutional ownership 43% (for a cannabis stock at least).