Well, we covered about 1/3 of our GWPH short a month ago to lock in a 50% gain, as the stock had been more than cut in half since we shorted it. This morning, GW Pharma announced the positive results of the first pivotal Phase 3 study of its investigational medicine Epidiolex (cannabidiol or CBD) for the treatment of Dravet syndrome.
I don’t think that GW Pharma can make a sustainable, patent-protected product cycle for any of their cannabis-derived products, but the headlines alone today are enough to wipe out our remaining gains in this stock as it pops back to where it was when we first shorted it. I can tell you that we’ve been researching the potential for cannabidoil to help our own little daughter with some seizures she had early on but that seem to have subsided on their own lately. I don’t think these products will have the type of margins that we see at Gilead or other big biotech drug companies that are fleecing the US taxpayer to the tune of 90% gross margins and which GW Pharma investors expect to see.
None of that will matter this morning as the stock goes crazy. I’m in no rush to make any new moves in this name and will likely let it trade itself out today and tomorrow.
I’ll be back with additional markets, economic and stock analysis later.