GW Pharmaceuticals (GWPH) soared in the last hour of trading Wednesday after Reuters reported that the company hired Morgan Stanley (MS) after it received unsolicited interest from other drug makers.
The news served as a catalyst to a number of cannabis stocks as share prices jumped 5% to 10% across the board. Does Not Come as a Surprise GW is in a league of their own when it comes to the cannabis industry and this news does not come as a surprise to us.
In an article published in July, we said, “We would recommend targeting companies like GWPH, INSY and ZYNE, as long-term investments. These companies would be very attractive takeout candidates for big pharma businesses that want to enter the legal cannabis industry.”
In March, GW changed the landscape of the cannabis industry when it reported positive data from its Stage 3 Clinical study on its Epidiolex product for the treatment of Dravet syndrome. GW reported similar results in May but this time it was for the treatment of Lennox-Gastaut syndrome (LGS) with its Epidolex product.
And we weren’t the only ones on the scent of Biotech Buyouts within the Cannabis Space as Jason Spatafora (@WolfofWeedSt) contributed to a piece in Forbes about Biotech Acquisitions with GWPH, CARA, ZYNE, & INSY all potential targets from ABBV. In the July 26th piece he stated:
“INSY would be the obvious first choice for ABBV because if they acquired INSY they get Syndros, which AbbV’s patients could switch over to due to the efficiency of the drug. My feeling is Abbv could acquire a few companies in this space such as Cara Therapeutics (CARA), Zynerba (ZYNE), and GW Pharmaceuticals (GWPH). Their purchase of Pharmacyclics for $21 Billion last year shows they aren’t scared to spend money and a move like this (if approved) would have them dominating the space.”
That article can be read here
Only Pure-Play Biotech Cannabis Stock Unlike Insys Therapeutics (INSY) and Zynerba Pharmaceuticals (ZYNE), GW actually utilizes the cannabis plant to derive its medicines.
Insys and Zynerba are focused on developing treatments with synthetic cannabis, which differs from GW’s approach.
Although ZYNE and INSY take a different approach, both shares rallied off of GW’s news. The shares rallied 8.5% and 5.7%, respectively and we were surprised by some of ripple effects created by this news.
What Stocks Benefited?
Terra Tech Corp (TRTC): After trading mildly higher for most of the day, TRTC jumped 10% following the GW news and the shares ended the day up 12.3%.
India Globalization Capital (IGC): The shares were trading at $0.45 for most of the day and then IGC jumped more than 12% after the GW news was reported. IGC ended the day up more than 20% and volume was 5x times higher than its monthly average. IGC is trading at $0.52 and the shares are now trading above its 20, 50, and 150 day moving average.
Cara Therapeutics (CARA): The shares were trading in the $5.70-$5.80 range for most of the day and then shares jumped above the $6 level after the news was reported. CARA rallied more than 6.1% yesterday and the shares are trading at $6.02 after this move.
By Michael Berger of Technical420.com
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
1 comment
Very interesting article- Too late but I didn’t jump in then.