Marijuana Stocks

By Juliette Fairley

Biotech was one of the top performing sectors of marijuana stocks in 2014, according to Viridian Capital & Research, returning 339% compared to 665% for the cannabis consulting sector and 135% for infused products.

Among the biotech stocks to watch in 2015 is GW Pharmaceuticals (GWPH), which manufactures Sativex, a drug containing THC and CBD that treats spasticity associated with multiple sclerosis. “Successful completion of phase 3 trials will likely lead the way to FDA approval,” said Matt Karnes, managing partner with GreenWave Advisors in New York.

Trading on the NASDAQ exchange, the stock was priced at $40 a share a year ago and reached a high of $103 in July 2014 and closed today at $77.

“What makes GW Pharmaceuticals special is its valuation and liquidity as well as the fact that it appears to be the farthest along in the development of drugs based on cannabis,” said Leslie Bocskor, investment banker and entrepreneur with Electrum Partners.

The overall concern in the medical marijuana industry about biotech companies is the creation of medicinal formations of different strains that will not be of pharmaceutical grade.

“The biggest hot button issue in pot biotech is when and if these pharmaceutical like pot products will emerge and what standards and guidelines we might see the FDA require,” said Scott Greiper, founder with Viridian Capital & Research in New York.

Unlike GW Pharmaceuticals, Insys Therapeutics (INSY) is creating pharmaceuticals from synthetic CBD and THC. The growth of Insys Therapeutics has been 70% year over year and analysts are projecting a price of $57 share, according to Electrum Partners.

“Many pharmaceuticals are synthetically manufactured,” said Joseph Friedman, a pharmacist and chief operations officer with PDI Medical.  “Based on FDA studies and approvals, it is reasonable to assume synthetically made drugs can be beneficial however due to the lack of clinical studies and experience with cannabis, the jury is out on how well or not synthetic versions of the compound will work.”

Used to treat nausea and vomiting caused by chemotherapy, Marinol by AbbVie is a synthetic based THC pharmaceutical already on the market.

“Synthetic compounds are faster from a testing standpoint but there’s lots of things that can go wrong in biotechnology,” said Douglas Sorocco, a biochemist and cannabis intellectual property lawyer in Oklahoma.

Insys Therapeutics obtained five Orphan Drug Designations (ODD) for cannabinoid products. Under the Orphan Drug Act (ODA) of January 1983, an orphan drug is one that is developed to specifically treat rare medical conditions.

Headed by CEO Anthony J. Cataldo, Oxis International is a penny stock that performed well in the past year. OXIS increased from $0.004 in January 2014 to a recent high of $0.035.

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