GW Pharmaceuticals: A Pre-Earnings Preview

GW Pharmaceuticals (NASDAQ:GWPH) is a British bio-pharmaceutical company best known for its cannabis-based multiple sclerosis treatment, Sativex.

GW Pharmaceuticals in the News

GW Pharmaceuticals is scheduled to announce its Fiscal third quarter earnings report on Tuesday, November 18th. Analysts are expecting the company to post a loss of $-0.46 per share for the quarter. During the same quarter last year, the company posted a loss of $-0.29 per share, representing a 58.6% decrease on a year-over-year basis.

The stock currently has decent short-term momentum and is seeing solid activity on the earnings estimate revision front as well. Estimates of the stock narrowed from a loss of 58 cents a share 30 days ago, to a loss of 46 cents today, a move of 20.7%. Analysts are becoming more optimistic on GW Pharmaceuticals earnings for the coming quarter and the full fiscal year as conveyed in the positive change in earnings estimate.

The company’s main growth driver is expected to be Sativex, an FDA approved treatment spasticity associated with multiple sclerosis. GW Pharmaceuticals has forecast strong double digit revenues from the drug compelled by higher in-market sales for the full-year 2014. On the other hand, having continued investments in its pipeline development may also inadvertently result in an increase in operating expenses year-over-year.

GW Pharmaceuticals has a lot of R&D updates in its pipeline for the end of 2014 and early 2015, including its initial top-line data from a phase III study on Sativex for cancer pain and preparing to initiate a phase III study on Sativex according to the FDA’s Special Protocol Assessment requirement.

In other GW Pharmaceutical news, analysts are also expecting the company to give an update on its study on Epidiolex for the treatment of Dravet syndrome in children who are undergoing treatment with other anti-epileptic drugs.

Conclusion

Will Sativex continue to drive GW Pharmaceuticals on the road to success, or will its increasing operating expenses stand in the way?

4 top analysts have rated GWPH with a Buy within the past 5 months, making the average top analyst consensus a Strong Buy.