Don’t call GW Pharmaceuticals (NASDAQ:GWPH) and Corbus Pharmaceuticals (NASDAQ:CRBP) “pot stocks.” These legitimate drug developers seek to harness the body’s endocannibinoid pathways to treat serious diseases…
GW made headlines in 2018 when the Food and Drug Administration (FDA) approved Epidiolex, the first cannabis-derived drug. European regulators gave their stamp of approval for the drug, a treatment for rare pediatric seizures, last September. The market confirmed the patient need for Epidiolex, and GW sold nearly $300 million worth of the drug.
The future of Corbus, meanwhile, hangs on the success of lenabasum, a synthetic cannabinoid drug in phase 3 clinical testing as a treatment for systemic sclerosis. This summer, the medical community — and biotech investors — should learn the outcome. Synthetically derived lenabsum (not extracted from a marijuana plant) has successfully advanced through early clinical testing.
Corbus’s high hopes for lenabasum span beyond systemic sclerosis. The drug is in a parallel phase 3 trial for the autoimmune disease dermatomyositis, as well as phase 2 trials for systemic lupus erythematosus and cystic fibrosis. Collectively, lenabasum could achieve blockbuster potential.
Will COVID-19 affect GW and Corbus?
Drug developers, including GW and Corbus, will inevitably face delays in ongoing clinical trials because of the coronavirus and COVID-19, the disease it causes. This can be attributed to slowdowns in enrollment, missed or disrupted treatment and monitoring visits, and delays in collecting data from hospitals and clinics in order to run the final analyses.
Delays will likely have a greater negative effect for Corbus, given that lenabasum’s phase 3 data this summer is such a critical milestone. Biotech investors will be looking to see how this binary event pans out. The company also needs additional capital, so positive results would be tremendously helpful for negotiating better terms.
GW should be able to weather trial delays more readily because investors can focus on revenue numbers; 2020 represents the second full year for Epidiolex on the market, including its recent introduction to certain countries in Europe.
GW may see a silver lining in an FDA slowdown, because that could delay a potential competitor from reaching the market. Zogenix (NASDAQ:ZGNX) filed a New Drug Application with the FDA in November for Fintepla, a drug to treat seizures associated with Dravet syndrome, one of the two indications currently approved for GW’s Epidiolex. In positive news for Zogenix, the FDA told the company that it had been granted priority review status, meaning the agency did not intend to convene an advisory panel to review, discuss, and make recommendations regarding Fintepla’s risk-benefit profile.
At the end of February, the FDA pushed back its decision deadline from…
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