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UK delay for cannabis MS drug

The launch of GW Pharmaceutical's cannabis-based treatment for multiple sclerosis, Sativex, has been delayed

The launch of GW Pharmaceutical's cannabis-based treatment for multiple sclerosis, Sativex, has been delayed after the company lost an appeal against a regulatory decision requiring it to conduct further clinical trials.

Shares in GW have fallen more than 40 per cent to 60.5p (June 14), their lowest level for four years, since it was first reported that the firm had failed to overturn the negative ruling by UK regulator, the Medicines and Healthcare products Regulatory Agency (MHRA).

MHRA said although it was happy with the quality and safety of Sativex, more evidence was needed to prove the efficacy of the nasal spray to relieve spasticity in MS sufferers.

“We acknowledge that this decision may cause disappointment to MS patients,” said MHRA chief executive, Kent Woods. “However there was insufficient evidence to show the risk-benefit relationship was favourable.”

GW chairman, Geoffrey Guy, said he was “very disappointed” at the decision.

“Today's setback will only serve to reinforce our determination to bring this important and innovative new medicine to the UK market,” he said.

Guy added that although his company had fought and won to have patients' reports of their improvements after taking Sativex considered, the MHRA had insisted that another trial must be run to obtain data from larger numbers of patients.

GW's appeal failure means that Sativex may not be launched in the UK until 2007 and delays a milestone payment of £17m from its marketing partner, Bayer. Analysts said GW, which had £16.2m in cash at the end of May 2005, was now in danger of running out of money during 2006 unless it could find ways of raising funds to continue its operations.

One such way, touted by the company, is to sell the marketing rights to Sativex in other European countries.

“Even if such a deal can be signed in time, we consider it unlikely [that] it would provide enough cash to supply adequate balance-sheet strength in the near term,” said analyst Mike Booth at Canaccord Capital.

“Although the company has other options than the equity markets for financing, such as licensing Sativex in Europe or renegotiation of the Bayer agreement, until this situation becomes clearer we would not expect much support for the stock,” said analyst Julie Simmonds at Nomura.

Sativex is approved and set for an imminent launch in Canada for the relief of neuropathic pain in MS. There are around 500,000 MS sufferers in Europe on top of the four million experiencing neuropathic pain.

30th September 2008

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