Page 82 - Bloomberg Businessweek July 2018

◼ BUSINESS Bloomberg Businessweek July 2, 2018

starting at $5,000, the companies are targeting medical marijuana makers Canopy Growth Corp.
sales of more than 100,000 by 2021. Says Hideyuki and Aurora Cannabis Inc.
Sakamoto, a Nissan executive vice president, about GW is eager to distance itself from the craze
the company’s wide- ranging retired battery efforts: around pot stocks. At the company’s headquarters
“We are prepared to develop a business model and in London’s Mayfair district, a preferred locale for
make a profit.” �David Stringer and Ma Jie, with hedge funds, the dress code leans toward suits and
Niclas Rolander and Jeremy Hodges ties rather than tie-dyes. Shelves are lined with
glass statuettes of cannabis leaves, but they com-
THE BOTTOM LINE By 2030 there’ll be a 25-fold increase in memorate stock market listings led by blue-chip
demand for batteries for electric vehicles. Companies are trying to
build businesses around the used power cells. underwriters such as Morgan Stanley and Bank of
America Corp.’s Merrill Lynch. “We’re an unusual
company, and I get that we probably wouldn’t have
quite the level of media interest if we were develop-
Why the FDA Is High ing something from a source no one had ever heard
of,” says Chief Executive Officer Justin Gover. “But
what is more important is what our medicines do,
On a Marijuana Drug
SIMON DAWSON/BLOOMBERG. ILLUSTRATION BY NICHOLE SHINN ● GW Pharmaceuticals’ epilepsy rare form of epilepsy, who took Epidiolex in an
rather than where they come from.”
Patients with Lennox-Gastaut syndrome, a
advanced clinical test in 2018 were far less likely
to experience seizures than those who were given
treatment is the first pot-derived
a placebo. The intractable disease puts children at
medicine approved in the U.S.
risk of developmental delays and even death.
While the drug can reduce the frequency
GW Pharmaceuticals Plc grows about 20 tons of
cannabis annually at greenhouses the size of foot-
halt in them, says Shlomo Shinnar, who runs the
Comprehensive Epilepsy Management Center
ball fields in an undisclosed corner of the English of seizures, only a few patients saw a complete 19
countryside. But you can forget about getting at Montefiore Medical Center in New York. “It’s
blazed to Family Guy reruns with this crop. The effective, but that’s not the same thing as making ● Forecast of Epidiolex’s
revenue by 2022
plants, genetically modified to remove the psycho- you seizure-free,” says Shinnar, whose center has
active properties, are used to produce Epidiolex, a used the drug in clinical trials and through GW’s $1.3b
prescription drug for children with severe epilepsy. compassionate-use program for patients with
The U.S. Food and Drug Administration approved few alternatives. “People want to be seizure-free,
the treatment on June 25, making it the first pre- and if they aren’t, they’ll try another drug if it
scription medicine derived from cannabis permit- comes along.”
ted to be sold in the U.S. Epidiolex’s active compound, cannabidiol,
The decision is a boost for the U.K.’s biotech produces an anticonvulsant effect through its
industry and bolsters the nation’s position, accord- interaction with various ion channels, which are
ing to the United Nations, as the biggest producer prominent components of the nervous system.
of cannabis for medical and scientific purposes. GW scientists manipulate four areas of the mari-
That’s despite the U.K. government’s steadfast juana plant’s DNA to achieve the desired levels of
opposition to legalization of medical marijuana. chemicals, breeding it to be high in cannabidiol and
“It’s a watershed event to get FDA approval,” says low in tetrahydrocannabinol, or THC, the chem-
Sasha Kaplun, vice president for corporate devel- ical associated with getting high. THC is further
opment at Auxly Cannabis Group Inc., an invest- reduced to trace amounts during manufacturing.
ment partnership in Toronto. Approval should help GW hasn’t disclosed what it intends to charge
alleviate skepticism among some physicians about for Epidiolex, but winning approval in the world’s
the plant’s medical uses, Kaplun says. largest drug market could ease a stigma that’s
Epidiolex sales could reach $1.3 billion by 2022, restricted research into the medical benefits of the
ILLUSTRATION BY BRIAN BLOMERTH enue of $17 million last year. In anticipation of than people just getting high.” �Thomas Buckley,
pot plant. Says Gover: “There’s more to cannabis
say analysts at Cowen & Co., dwarfing GW’s rev-
approval, investors sent the company’s market
with John Lauerman
value soaring to more than $4 billion, making it
one of the world’s most valuable publicly traded
THE BOTTOM LINE While medical marijuana has been used for
years as a pain treatment in many states in the U.S., the FDA just
weed farmers, alongside Canadian conventional
approved the first cannabis-derived prescription drug.