U.S. Markets closed

GW Pharma's Epidiolex Becomes First Cannabis-Based FDA-Approved Drug

Elizabeth Balboa

As expected, the U.S. Food and Drug Administration on Monday approved GW Pharmaceuticals PLC-ADR (NASDAQ: GWPH)'s Epidiolex for the treatment of epilepsy, specifically for people who suffer with Lennox-Gastaut and Dravet syndromes.

Why It’s Important

The drug is derived from the cannabidiol of cannabis, and, as the plant is yet to be decriminalized by federal regulators, its approval gives GW Pharma a lead among cannabis-exposed companies in the U.S. financial markets.

The FDA seal is nonetheless seen to be a boon for the broader industry.

“It makes it harder for Congress to continue to list cannabis as a Schedule I controlled substance,” Debra Borchardt, CEO at cannabis-focused financial media outlet Green Market Report, told Benzinga in April. “If the FDA makes it clear that a cannabis-based pharmaceutical drug has medicinal value, then Congress can no longer claim there is no medicinal quality for cannabis.”

What’s Next

The Drug Enforcement Administration must reclassify cannabidiol before GW Pharma can market Epidiolex. The current status as a Schedule I drug presents unresolved regulatory risk for Epidiolex.

"The FDA will continue to support rigorous scientific research on potential medical treatments using marijuana and its components that seek to be developed through the appropriate scientific channels," FDA Commissioner Scott Gottlieb said in a Monday press release. "However, we remain concerned about the proliferation and illegal marketing of unapproved CBD-containing products with unproven medical claims."

$GWPH says it will take @DEAHQ "within 90 days" to schedule Epidiolex, so drug could go on sale this fall

— Jonathan Rockoff (@jonathanrockoff) June 25, 2018

The European Medicines Agency is expected to rule on the therapy in early 2019.

At time of publication, GW Pharma shares had receded to trade down 1.7 percent on the day — a potential case of "buying the rumor, selling the news" considering GW's pre-approval run.

Competitor Zynerba Pharmaceuticals Inc (NASDAQ: ZYNE) didn't move on the news but traded down nearly 10 percent in anticipation.

Related Links:

Why GW Pharma's Epidiolex Results Could Shape The Future Of Cannabis-Based Therapeutics

Pot Stocks, ETFs, Top News And Data From The Cannabis Industry Last Week

See more from Benzinga

© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.