GW Pharma (GWPH): Most Likely Outcome of AES Meeting is $10 Upside, But Smaller Chance for Downside Pressure - Morgan Stanley
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Morgan Stanley analyst Andrew Berens weighed in on GW Pharma (NASDAQ: GWPH) ahead of data releases this weekend at the AES annual meeting. The firm's most-likely scenario emerging from the meeting is $10 upside, although they estimate a 30% chance GWPH experiences pressure.
"While we think the stock is fairly priced into this meeting based on our assessment of 4 possible scenarios, we see a wide range of potential outcomes including $30 upside with a best-case scenario to $50 downside with an unlikely worst-case scenario," Berens said.
He added, "The key factors we will be focusing on at the meeting are the expanded efficacy and safety databases. In terms of efficacy, the responder analyses from the Phase 3 trials will be presented for the first time, which will aggregate the percentage of patients having a pre-specified reduction in seizures on GW's Epidiolex. In terms of safety, we anticipate that the company will present key safety details including color on the rate of status epilepticus in the two trials. Also important will be the impact of the company's decision not to present the drug-drug interaction data (DDI) at AES, with the uncertainty potentially being tempered by clinician perspective and anecdotal commentary. In the following note, we consider the impact on GWPH from these main levers. While we think the stock is currently fairly priced into the event, we see a wide range of potential movements ranging from up $30 to down $50, with the most-likely scenario being a $10 upside move."
The firm maintained an Overweight rating and price target of $160, with a bull case of $195 and a bear case of $39.
Shares of GW Pharma closed at $116.30 yesterday.
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