GW Pharmaceuticals (NASDAQ:GWPH) Stock Consolidates: Time To Buy?

GW Pharmaceuticals (NASDAQ:GWPH) is one of those rare entities which is both a pharmaceutical company and a cannabis company at the same time. The company is best known for its medical cannabis product Epidiolex, and the bulk of its revenues are generated by that product. It is a medical cannabis drug meant to tackle two forms of epilepsy, and in 2019, it generated as much as $296.4 million in revenues.

Epidiolex Holds Key

The sale from Epidiolex could rise further this year, and it could be worthwhile for investors to take a closer look at the GW Pharmaceuticals stock.

One of the most important developments for GW has been the fact that Epidiolex has been descheduled by the FDA, and hence, it can be sold in the United States like regular medicine. It opens up a whole new market for GW, and on top of that, trials are being conducted to figure out if Epidiolex can be used to treat other conditions like Rett Syndrome or tuberous sclerosis complex. On the other hand, GW Pharma has also created cannabis-based mouth spray, which is sold outside the United States as Sativex. Lastly, GW is also working on GWP42003, which is meant for treating schizophrenia.

The company has reduced its losses from $305.3 million back in 2018 to $17.7 million in 2019, and although it is not yet profitable, the company boasts of a cash balance of $536.9 million. In order to ramp up sales further, GW will also have to hire more sales professionals. At this point, the company only has 900 employees. Hence, it is possible that a larger organization might offer to acquire GW, and that could only be a positive for the stock. Those who are looking to invest in the stock might hold off for a certain period since it is not yet clear how GW’s business is going to be affected by the coronavirus pandemic. That being said, it could be an attractive long term investment.

About Travis Garlick 1821 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.