News Column

GW Pharmaceuticals plc Reports First Quarter 2014 Financial Results and Operational Progress

February 4, 2014

-Recent Successful $101 Million Financing Accelerates Epidiolex ® Development in Childhood Epilepsy- -Conference Call Today at 8:00 a.m. ET , 1:00 p.m. GMT - LONDON , Feb. 5, 2014 (GLOBE NEWSWIRE) -- GW Pharmaceuticals plc (Nasdaq:GWPH) (AIM:GWP) ("GW," "the Company" or "the Group"), a biopharmaceutical company focused on discovering, developing and commercializing novel therapeutics from its proprietary cannabinoid product platform, announces financial results for the first quarter ended 31 December 2013 . RECENT OPERATIONAL HIGHLIGHTS Follow-on offering of American Depositary Shares ("ADSs") on the NASDAQ Global Market closed in January 2014 raising total gross proceeds of $101.1 million (net proceeds after expenses of $94.0 million /£57.1 million), to be used primarily to fund the Epidiolex ® development program for childhood epilepsy Advancement of epilepsy program: Orphan Drug Designation granted by the U.S. FDA for Epidiolex to treat Dravet syndrome Seven Expanded Access Investigational New Drug Applications (INDs) granted by the FDA to U.S. physicians to treat with Epidiolex approximately 125 children suffering from intractable epilepsy syndromes. Additional INDs recently submitted by U.S. physicians to the FDA Patients now commencing treatment with Epidiolex in two expanded access INDs in New York City and San Francisco - initial treatment data expected mid-2014 Orphan Drug Designation submission to the FDA for Epidiolex to treat Lennox-Gastaut syndrome Additional epilepsy pipeline candidate GWP42006 (Cannabidivarin or CBDV), Phase 1 trial dosing completed with data expected in H1 2014 Publication confirming mRNA gene expression suppressed with CBDV treatment and evidence of CBDV anticonvulsant effects Sativex ® program developments and upcoming expected milestones: Phase 3 cancer pain trials in recruitment – top-line data due towards the end of 2014. Data intended to lead to a New Drug Application (NDA) filing with the FDA in the U.S. Phase 3 IND opened with the FDA for Sativex as a treatment for Multiple Sclerosis (MS) spasticity; request for Special Protocol Assessment (SPA) submitted to the FDA Recent regulatory approvals in France and Switzerland as a treatment for MS spasticity; Sativex now approved for use in 25 countries Agreement with Ipsen to promote and distribute Sativex in Latin America Significant additional on-going clinical trial activity for cannabinoid pipeline product candidates Phase 2a trial data of GWP42003 for the treatment of ulcerative colitis ongoing - data expected in mid-2014 Phase 2b dose ranging trial of GWP42004 in type-2 diabetes expected to commence in H1 2014 Phase 2a trial of GWP42003 for the treatment of schizophrenia expected to commence in H1 2014 Phase 1b/2a clinical trial underway of GWP42002:GWP42003 for the treatment of Recurrent Glioblastoma Multiforme (GBM), with safety cohort data expected in 2014. Patent Notice of Allowance issued for the use of cannabinoids in treating GBM FINANCIAL HIGHLIGHTS Total revenue for the three months ended 31 December 2013 of £7.5 million ( $12.4 million ) compared to £5.2 million for the three months ended 31 December 2012 . Net loss after tax for the three months ended 31 December 2013 of £2.8 million ( $4.7 million ) compared to a profit after tax of £2.1 million for the three months ended 31 December 2012 . Cash and cash equivalents as at 31 December 2013 of £35.3 million ( $58.4 million ) compared to £38.1 million as at 30 September 2013 . Since the period end, this cash position has been further enhanced by receipt of the net proceeds after expenses from the follow-on offering of ADSs on the NASDAQ Global Market $94.0 million (£57.1 million) in January 2014 . "Our successful U.S. follow-on offering in early January raised $101 million and reflects excitement regarding GW's childhood epilepsy program. We believe that our lead epilepsy product candidate, Epidiolex, has the potential to meet significant unmet needs in the treatment of orphan childhood epilepsy syndromes such as Dravet syndrome and Lennox-Gastaut syndrome. With the new funds raised, we have the financial strength to accelerate this development program whilst retaining global commercial rights," stated Justin Gover , GW's Chief Executive Officer. "In addition to our orphan epilepsy program, as we move through 2014, we expect a significant amount of milestones, including Phase 3 cancer pain data for Sativex as well as important clinical progress across our robust pipeline of cannabinoid product candidates." Conference Call and Webcast Information GW Pharmaceuticals will host a conference call and webcast to discuss the 2014 first quarter financial results today at 8:00 a.m. ET / 1:00 p.m. GMT . To participate in the conference call, please dial 877-407-8133 (toll free from the U.S. and Canada ), or 0800-756-3429 (toll free from the UK ) or 201-689-8040 (international). Investors may also access a live audio webcast of the call via the investor relations section of the Company's website at http://www.gwpharm.com . A replay of the call will also be available through the GW website shortly after the call and will remain available for 30 days. Replay Numbers: (toll free):1-877-660-6853, (international):1-201-612-7415. For both dial-in numbers please use conference ID #13575391. About GW Pharmaceuticals plc Founded in 1998, GW is a biopharmaceutical company focused on discovering, developing and commercializing novel therapeutics from its proprietary cannabinoid product platform in a broad range of disease areas. GW commercialized the world's first plant-derived cannabinoid prescription drug, Sativex®, which is approved for the treatment of spasticity due to multiple sclerosis in 25 countries. Sativex is also in Phase 3 clinical development as a potential treatment of pain in people with advanced cancer. This Phase 3 program is intended to support the submission of a New Drug Application for Sativex in cancer pain with the U.S. Food and Drug Administration and in other markets around the world. GW has a deep pipeline of additional cannabinoid product candidates, including Epidiolex which has received Orphan Drug Designation from the FDA for the treatment of Dravet syndrome, a severe infantile-onset, genetic, drug-resistant epilepsy syndrome. Our product pipeline also includes compounds in Phase 1 and 2 clinical development for glioma, ulcerative colitis, type-2 diabetes, and schizophrenia. For further information, please visit www.gwpharm.com . Forward-looking statements This news release contains forward-looking statements that reflect GWs current expectations regarding future events, including statements regarding financial performance, the timing of clinical trials, the relevance of GW products commercially available and in development, the clinical benefits of Sativex® and Epidiolex and the commercial potential of Sativex and Epidiolex. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including (inter alia), the success of the GW's research strategies, the applicability of the discoveries made therein, the successful and timely completion of uncertainties related to the regulatory process, and the acceptance of Sativex®, Epidiolex and other products by consumer and medical professionals. A further list and description of risks, uncertainties and other risks associated with an investment in GW can be found in GW's filings with the U.S. Securities and Exchange Commission . Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. GW undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. Enquiries: GW Pharmaceuticals plc (Today) + 44 20 7831 3113 Justin Gover , Chief Executive Officer (Thereafter) + 44 1980 557000 Stephen Schultz , VP Investor Relations (U.S.) 917 280 2424 / 401 500 6570 FTI Consulting (Media Enquiries) Ben Atwell / Simon Conway / John Dineen ( UK ) + 44 20 7831 3113 Robert Stanislaro (U.S.) 212 850 5657 Trout Group, LLC (U.S. investor relations) Todd James / Chad Rubin 646 378 2900 GW Pharmaceuticals plc Condensed consolidated income statements Condensed consolidated income statement for the three months ended 31 December 2013 Three months Three months Three months ended ended ended 31 December 31 December 31 December 2013 2013 2012 $000 's £000's £000's Revenue 12,409 7,487 5,176 Cost of sales (593) (358) (413) Research and development expenditure (15,169) (9,153) (6,399) Management and administrative expenses (2,506) (1,511) (800) Operating loss (5,859) (3,535) (2,436) Interest income 51 31 46 Interest payable (33) (20) -- Loss before tax (5,841) (3,524) (2,390) Tax 1,172 707 4,441 (Loss)/profit for the period (4,669) (2,817) 2,051 (Loss)/earnings per share – basic (2.6c) (1.6p) 1.5p – diluted (2.6c) (1.6p) 1.5p All activities relate to continuing operations. The Group has no recognised gains or losses other than the losses above and therefore no separate consolidated statement of comprehensive income has been presented. GW Pharmaceuticals plc Condensed consolidated statements of changes in equity Three months ended 31 December 2013 Called-up Share share premium Other Retained capital account reserves earnings Total £000's £000's £000's £000's £000's Balance at 1 October 2012 133 65,947 20,184 (65,032) 21,232 Share-based payment transactions -- -- -- 143 143 Profit for the period -- -- -- 2,051 2,051 Balance at 31 December 2012 133 65,947 20,184 (62,838) 23,426 Balance at 1 October 2013 178 84,005 20,184 -68,965 35,402 Exercise of share options -- 299 -- -- 299 Share-based payment transactions -- -- -- 241 241 Loss for the period -- -- -- (2,817) (2,817) Balance at 31 December 2013 178 84,304 20,184 (71,541) 33,125 GW Pharmaceuticals plc Condensed consolidated balance sheets As at 31 December 2013 As at As at As at 31 December 31 December 30 September 2013 2013 2013 Non-current assets $000 's £000's £000's Intangible assets – goodwill 8,634 5,210 5,210 Property, plant and equipment 10,002 6,035 5,476 18,636 11,245 10,686 Current assets Inventories 8,915 5,379 4,661 Deferred tax asset 1,163 702 895 Taxation recoverable 6,298 3,800 2,900 Trade receivables and other current assets 7,514 4,534 1,733 Cash and cash equivalents 58,447 35,266 38,069 82,337 49,681 48,258 Total assets 100,973 60,926 58,944 Current liabilities Trade and other payables (17,664) (10,658) (9,440) Obligations under finance leases (174) (105) (100) Deferred revenue (6,740) (4,067) (3,181) (24,578) (14,830) (12,721) Non-current liabilities Trade and other payables (4,143) (2,500) -- Obligations under finance leases (3,113) (1,878) (1,905) Deferred revenue (14,241) (8,593) (8,916) Total liabilities (46,075) (28,331) (23,542) Net assets 54,898 33,125 35,402 Equity Share capital 295 178 178 Share premium account 139,717 84,304 84,005 Other reserves 33,451 20,184 20,184 Accumulated deficit (118,565) (71,541) (68,965) Total equity 54,898 33,125 35,402 GW Pharmaceuticals plc Condensed consolidated cash flow statements For the three months ended 31 December 2013 Three months Three months Three months ended ended ended 31 December 31 December 31 December 2013 2013 2012 $000 's £000's £000's (Loss)/profit for the period (4,669) (2,817) 2,051 Adjustments for: Interest income (51) (31) (46) Interest payable 33 20 -- Tax (1,172) (707) (4,441) Depreciation of property, plant and equipment 503 303 209 Net foreign exchange gains (332) (201) (36) Decrease in allowance for doubtful debts -- -- (26) Decrease in provision for inventories (570) (344) -- Share-based payment charge 399 241 143 (5,859) (3,536) (2,146) Decrease/(increase) in inventories (618) (373) (213) Increase in trade receivables and other assets (4,666) (2,815) (631) Increase in trade and other payables and deferred revenue 7,092 4,279 1,461 Cash used by operations (4,051) (2,445) (1,529) Research and development tax credits received -- -- -- Net cash outflow from operating activities (4,051) (2,445) (1,529) Investing activities Interest received 74 45 46 Purchases of property, plant and equipment (1,428) (862) (297) Net cash outflow from investing activities (1,354) (817) (251) Financing activities Proceeds on exercise of shares options 496 299 -- Interest paid (33) (20) -- Capital element of finance leases (35) (21) -- Net cash inflow from financing activities 428 258 -- Effect of foreign exchange rate changes 332 201 36 Net decrease in cash and cash equivalents (4,645) (2,803) (1,744) Cash and cash equivalents at beginning of the period 63,092 38,069 29,335 Cash and cash equivalents at end of the period 58,447 35,266 27,591 Source: GW Pharmaceuticals plc


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