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GW Pharmaceuticals PLC (Nasdaq: GWPH) stock is up more than 50% over the past two days thanks to a bullish and bold call from Morgan Stanley.
The investment firm on Tuesday issued an "Overweight" rating on the U.K.-based company, a leader in cannabis-based drugs, and set an aggressive $103 price target on shares, more than double Monday's close.
Morgan Stanley's optimistic rating and sky-high price target sent shares up a whopping 32.19% to $60.86 on Tuesday. Volume was extremely heavy, with some 6,752,000 shares changing hands – more than thirteen times the stock's three-month average daily volume of 515,831.
Also stoking GWPH stock Tuesday were comments from CNBC's Jim Cramer.
"Shocked" by Morgan Stanley's daring call, Cramer said it was nonetheless a "timely" recommendation given the current marijuana stock craze. Cramer added the stock will quickly reach Morgan Stanley's target price and said GW is the top play in today's current marijuana stock obsession.
GW's strong stock momentum carried through to Wednesday, with shares rising more than 20% to $73.33 intraday. By mid-day more than 3 million shares had traded.
Adding fuel to GW's colossal gains Wednesday were bullish options activity and potential takeover chatter.
But, more on Morgan Stanley's call…
GW's (Nasdaq: GWPH) Promising Drug Pipeline
Morgan Stanley sees potential in GW's unique product pipeline and its "novel platform." The firm is particularly keen on GW's epilepsy drug Epidiolex, which has shown notable promise in a small yet growing set of data.
Epidiolex could generate worldwide sales of $1.35 billion and will make up 90% of GW's peak revenue, according to Morgan Stanley.
Additionally, U.S. sales of GW's Sativex, a treatment for multiple sclerosis (MS) spasticity and cancer pain, should also grow substantially, the firm predicted. "GW has multiple additional drugs in early stage development… that are not currently part of our valuation, but could be upside drivers over time," Morgan Stanley wrote in Tuesday's note to clients.
Other drugs in development include therapies for ulcerative colitis, schizophrenia, type 2 diabetes, and glioma (tumors that start in the brain or spine).
While Morgan Stanley touted GW's pharmaceutical offerings, the firm also highlighted GW's focus on medical marijuana treatments.
They will over charge which will result in non-competitiveness.
THC and CBD in nearly pure form are very cheap because production standards are reduced when the terpenes and contaminants are chemically removed. Nearly any farmer could produce huge quantities of stock material for no greater a cost than corn and fairly average people are capable of producing refined products on small scales at cost effective rates.
Are people going to pay %1000 more for something that is %20 more refined and controlled when the less refined versions are actually more effective in many cases?
What would the morphine market look like if Americans could legally grow opium? The current market is supplying $30-60/month for the moderate user. Morphine is rather easy to produce at >%90 purity, easier than THC which isn't hard.
There will have to be a defined differential between recreational and medicinal markets. "Fairly average people" will need to be able to handle tricky medical litigation.
Bongstar, I don't think you are taking into consideration the fact that medications of any type need to be tightly controlled and regulated because they are bound to be prescribed to immunocompromised patients. The barriers to entry are high in that regard. That's not to say that the feds can't negotiate this down, but no one is paying 1000% more let alone 100% more.
Nope. My statement is that acres of low quality drug plants put through factories for refining the oil is cheaper than top shelf chronic…way cheaper.
It takes much less money to grow crap and refine it than it does to grow chronic…much less. I can produce pharmaceutical grade resin, and I made $15k last year. You do not need chemically pure THC or CBD for anything btw. Concentrates that are cooked and filtered are pharmaceutical in CFU counts. Shit, my flowers are cleaner than most herbs being sold for drug use.