Pot-Growing GW Starts Final U.S. Testing of Pain Drug (Update4)

By Trista Kelley

Source: http://www.bloomberg.com/apps/news?pid=20601101&sid=aTIBTT0uLsV8&refer=japan

Nov. 26 (Bloomberg) -- GW Pharmaceuticals Plc and Japanese partner Otsuka Pharmaceutical Co. began the final phase of U.S. testing of the cannabis-based Sativex pain-relief medicine for some cancer patients.

The five-week trial of 336 patients will test whether the drug helps advanced cancer sufferers who no longer respond to opium-based pain relievers, the companies said in a statement today. Salisbury, England-based GW Pharma plans to report findings from the study next year and expects to receive U.S. regulatory approval in 2011.

Closely held Otsuka has exclusive rights to develop and market Sativex in the U.S. There are more than 6 million cancer patients and GW Pharma estimates as much as 40 percent of them have severe enough pain to warrant an opium-based treatment. Sativex, a mist sprayed in the mouth, is already approved in Canada for pain relief from advanced cancer and multiple sclerosis.

``Sativex has the potential to be a lucrative niche drug,'' Clear Capital analyst Stefan Hamill said in London. ``Data in the beginning of 2008 will convince the market that this is actually a real drug.''

Hamill, who has a ``buy'' rating on GW Pharma, estimates peak sales for U.S. cancer pain at $200 million a year and worldwide annual revenue of $350 million.

GW Pharma Shares

GW Pharma shares plunged 29 percent, the most ever, on July 20 after the drugmaker withdrew an application to European regulators for Sativex as treatment for MS muscle spasms. GW Pharma said it plans to resubmit the application after conducting a new trial that regulators requested. The shares rose 2 pence, or 4 percent, to 51.5 pence in London. The stock is down about 41 percent this year.

``We think the pessimism has peaked and the positive clinical data is going to turn things around,'' Hamill said. He has a target price of 102 pence.

Under the February agreement, Tokyo-based Otsuka agreed to pay GW Pharma as much as $273 million plus a royalty, as well as bear all the costs for the U.S. development of the drug. Otsuka is the discoverer of the antipsychotic medicine Abilify, which is sold in the U.S. by Bristol-Myers Squibb Co.

The Japanese company and GW Pharma in July also agreed to collaborate on researching and developing cannabis-based treatments related to the central nervous system and cancer.

Otsuka Focus

``We are still planning the structure of how we will market the product'' when Sativex reaches the market, Otsuka Pharma spokeswoman Yuko Kikuchi said in a telephone interview today. ``Sativex will strengthen our pipeline because one of Otsuka's focuses in research and development is in cancer.''

GW Pharma is already screening molecules from marijuana plants for Otsuka, and the first potential products may enter very early clinical testing next year, said Justin David Gover, managing director at the U.K. drugmaker.

The agreement gives GW Pharma ``a pipeline that is fully funded,'' he said in a Nov. 15 interview in London. ``We were wondering how we were going to fund the U.S. bit'' before the deal.

The drugmaker also has Sativex licensing agreements with Bayer AG for the U.K. and Canada and Spain's Laboratorios Almirall SA for the rest of Europe. Gover said GW Pharma will seek partners next year to develop cannabis-based treatments for obesity, inflammatory conditions, diabetes, Alzheimer's, and osteoporosis.

Sanofi's Acomplia

Sativex is derived from two principal compounds found in marijuana that affect the human brain's cannabinoid system. French drugmaker Sanofi-Aventis SA's weight-control drug Acomplia works by blocking the receptor in the brain called CB-1 -- the same one activated by marijuana that makes pot smokers feel hungry. Pfizer Inc. and Merck & Co. are working on medicines in the same class.

In Europe, GW Pharma is trying to gain approval of Sativex as a treatment for MS pain before seeking clearance to sell it as therapy for cancer patients. The drug is available under limited programs in the U.K. and Spain.

Karen Silman, a 49-year-old Yorkshire woman who has multiple sclerosis, is among 1,300 patients in the U.K. using Sativex under a government program for unlicensed medicines. Under the program, doctors can prescribe a drug that has yet to receive European regulatory approval as long as it has been cleared by regulators in certain countries.

Sativex ``does stop the spasms which cause me great pain,'' Silman said. ``There are other medications available but they make me fall asleep all the time and I don't know what I'm thinking. I wasn't prepared to exist like that.''

Not Covered

Silman says her prescription isn't covered by the National Health Service so she must pay as much as 400 pounds ($830) for a six-week supply of Sativex, and uses about four sprays every four hours.

Local health officials decide whether the drug will be covered by the taxpayer-funded NHS, and more than 90 percent of Sativex users do get the discounted prescriptions, Gover said. Sativex costs between 3 pounds to 5 pounds a day depending on how often the user needs pain relief, he said.

The MS Trust, a Hertfordshire, England-based charity, estimates that almost half of the people suffering from the disease in the U.K. smoke marijuana illegally to relieve spasms and pain.

Julia Brown, 58, is one of them. Confined to a wheelchair for seven years, Brown travels to the Netherlands to buy pot. Three puffs per day enable her muscles to relax enough to stretch and exercise her stiff legs.

Netherlands Trips

``Fifteen years I've been waiting for Sativex to come on general prescription,'' Brown said. She hasn't tried to get a prescription on the named-patient basis because she fears the cost of the drug would exceed her budget. A 12-euro ($18) bag of marijuana, about 20 pounds if bought in the U.K., is enough to last her for three months, she said.

``Approval in the U.S. would be a major influence,'' on subsequent approval in European markets, said Mick Serpell, a U.K. neuropathic pain physician who heads studies of Sativex and has prescribed the medicine. ``We're all watching the U.S. and it will be very interesting to see how it develops.''

To contact the reporter on this story: Trista Kelley in London at tkelley2@bloomberg.net .