Why This Biotech Stock And Its CBD Oil Are Immune To Coronavirus

3 years ago    By Admin


GW Pharmaceuticals (GWPH) and its CBD oil are immune to coronavirus, according to an analyst, prodding GWPH stock to pop Monday.

The biotech company makes Epidiolex, a purified CBD oil that treats two forms of epilepsy, Dravet syndrome and Lennox-Gastaut syndrome. Both occur in children and young adults. It\'s important to note Epidiolex is a Food and Drug Administration-approved medicine. The CBD oil isn\'t sold by marijuana dispensaries.

Amid the coronavirus outbreak, biotech stocks have tumbled more than 21% this month, as of Friday\'s close. But SVB Leerink analyst Marc Goodman expects GWPH stock to be less impacted by the spread of Covid-19, the new form of coronavirus sweeping the globe.

\"It has become clear to us that GW is especially well positioned for the current unusual operating environment, and hence is should be less impacted than many of our other companies,\" he said in a report to clients.

GWPH Stock Rises

On the stock market today, GWPH stock jumped 7.4%, to 80.42. Earlier, shares popped as much as 8.1%.

Goodman notes CBD oil Epidiolex is a chronic therapy and required for some epilepsy patients. In this environment, parents/caregivers will still seek out the lifesaving CBD oil for their children, he said. Further, statistics suggest children are less susceptible to Covid-19.

Already, patients and physicians are engaging via telemedicine, Goodman said. Telemedicine is a method of speaking with a doctor via video chat. Importantly, specialty pharmacies distribute the CBD oil, he said.

\"This business model should execute well in the current environment, as there is no need for face-to-face interactions and most of the drugs are mailed to patients\' homes directly,\" Goodman said.

CBD Oil Distributions Continue

Notably, the biotech company began focusing on improving insurance reimbursement prior to this year, Goodman said. That\'s now paying off with more flexible reimbursement decisions, he said.


Goodman acknowledges sales representatives for the CBD oil aren\'t traveling at the moment.

But \"they already had established physician relationships that they can leverage, which should help them keep up the launch momentum in year two, even as reps convert to virtual calls,\" he said.

Goodman kept his outperform rating on GWPH stock.

Expanding Epidiolex Uses

The biotech company is still trying to expand its uses for Epidiolex. To that point, Goodman doesn\'t expect the FDA to delay approval of the CBD oil in patients with tuberous sclerosis complex, or TSC.

Further, the supply chain for Epidiolex still appears strong. There have been no major issues with importing the finished product to the U.S. from the UK, he said.

Goodman notes a pivotal test of GW\'s drug nabiximols, in patients with spasticity due to multiple sclerosis, might be delayed. But he emphasizes that the thesis surrounding GWPH stock is still \"an Epidiolex story this year.\"

Still, on a month-to-date basis, GWPH stock has slipped nearly 27%.

Representatives of GW didn\'t immediately return a request for comment.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.