WASHINGTON. From time to time, we’ve run articles that explore medical and recreational marijuana stocks as a potential new addition to some investment portfolios. (Notably here and here.) Recently, we were tipped off on an article running in Yahoo Finance that explored the new, marijuana-derived GW Pharmaceuticals (stock symbol: GWPH) drug Epidiolex. If approved, Epidiolex could potentially transform the marijuana patch by actually making cannabis-based stock investments respectable.
More on Epidiolex
Still under FDA review, the GW Pharmaceuticals drug Epidiolex is a potential treatment for two rare versions of childhood epilepsy. The following Yahoo Finance article explains this further.
“GW Pharmaceuticals‘ (NASDAQ: GWPH) lead drug Epidiolex is currently under review by the U.S. Food and Drug Administration (FDA) as a treatment for two rare types of childhood-onset epilepsy — Dravet syndrome and Lennox-Gastaut syndrome. Epidiolex utilizes the popular cannabinoid known as cannabidiol (CBD), which is often revered for its medical benefits. Unlike tetrahydrocannabinol (THC), which is the component of the cannabis plant that gets you “high,” CBD does no such thing, making it a potentially attractive option for drug developers and regulators to consider.
“To date, the FDA never has approved a cannabinoid-based drug. Though the drug regulatory agency has given the green light to synthetic forms of THC, no cannabinoid-based medications have ever been granted access to pharmacy shelves with the approval of the FDA.
“In one pivotal-stage study for Dravet syndrome patients, GW Pharmaceuticals’ lead drug demonstrated a 39% reduction in seizure frequency relative to baseline, which was three times better than the 13% reduction achieved from the placebo. There are no FDA-approved treatments for Dravet syndrome, which could allow Epidiolex to become something really special for the 1 person in every 40,000 people who suffer from it in the United States.”
GW Pharmaceuticals Epidiolex could transform a “shady” industry
Epidiolex sounds interesting. Investors wanting to take a chance on this expensive, high-risk Canadian stock can purchase shares through most brokerage firms. On the other hand, we have no interest in GW Pharmacruticals, at least at the moment, simply because the company has never made a profit.
True, a lot of biopharma companies attract quite a profitable following, and they don’t make any money either. That’s because it’s always the promise of a pot of gold at the end of the R&D rainbow that beckons speculative investors. Given our ongoing beating in the shares of a huge, well-known and respectable major pharma company, Allergan (AGN), we don’t need to risk more investment dollars on an unknown quantity from an essentially unknown company. Our current goofy, headline-driven market environment just adds to the market and headline risks.
But we’ll have a bit more to say on the marijuana patch in our followup article. In this next installment, we move from GW Pharmaceuticals to a popular marijuana sector ETF that seems well hedged against risk. Maybe. We’ll drop a link here when we get that article posted.
Today’s stock market action
As we predicted in our Thursday article, trading is slow and generally negative on this pre-holiday Friday. The bears are at it again today, dumping this and that. Meanwhile the bulls seem already to have dashed off to the beaches for Memorial Day. At least on the East Coast. (On the West Coast, for all appearances, they’re ALWAYS at the beach.)
In any event, both the Dow and the broader-based S&P 500 are down about half a percent as we approach the final hour of trading on Wall Street. The tech-heavy NASDAQ has been up most of the day. It currently stands just above zero, nearly flatlining on the day.
We’ve done a little bit of housekeeping on our positions this week. We’ve dumped, with some regret, our position in Equinor (EQNR). The company was formerly known until mid-May as Norwegian oil and gas giant Statoil (STO). Its recent performance has been highly disappointing. The name change seems to have left the stock adrift for at least the past week. So with oil prices suffering a current decline after their huge run up, this was the one to cut.
Otherwise, not much else to do except get ready for the long weekend ourselves. We’re taking time off from stocks, for sure. You have to get away from this stuff once in a while to stay sane.
Ergo, so long for now. We’ll see you after the holiday.
— Headline image source: GW Pharmaceuticals web site.