GW attracts US investment in cannabis-based drugs

Investment

Cannabis-based drug developer GW Pharmaceuticals plc has attracted the attention of  US specialist healthcare investor Great Point Partners, which is buying 7,553,920 new GW ordinary shares at 78 pence per share. The agreement follows a recent unsolicited request by Great Point to take a significant equity position in GW.

At the same time UK-based M&G Investment Management Ltd, the largest institutional shareholder in GW, took up 917,000 new shares at the same price, thus maintaining M&G’s shareholding percentage. In total, this raised £6.6 million.

In addition, GW has issued warrants to Great Point to subscribe for 3,776,960 GW shares, 1,888,480 of which have an exercise price of £1.05 per share, and the remaining 1,888,480 have an exercise price of £1.75 per share. The warrants can be exercised at any time before the fifth anniversary of their issue.

Justin Gover, Managing Director of GW, said, “We are pleased that such a prominent US healthcare fund has sought to take this significant equity stake in GW. Great Point’s investment widens and internationalises GW’s institutional shareholder base and reflects GW’s emerging presence in the US market. The investment also serves to further enhance GW’s strong cash position.”

David Kroin, a founder and Co-Portfolio Manager at Great Point, said he had been following GW for some time and has identified it as a compelling investment opportunity, particularly following recent strong clinical data on Sativex, a treatment for spasticity caused by multiple sclerosis. “Our in-market research confirms the excitement in the clinical community for a product with a new mechanism to treat both multiple sclerosis spasticity, as well as cancer pain,” said Kroin. “We look forward to being part of the next phase of the company’s development and helping GW to build a presence in the US investor community.”