GW Pharmaceuticals Jumps on Report It May Be Acquisition Target
This article by Caroline Chen for Bloomberg may be of interest to subscribers. Here it is in full:
GW Pharmaceuticals Plc jumped after Reuters reported that the company had hired Morgan Stanley as an adviser after being approached by several drugmakers interested in an acquisition.
GW gained 20 percent to $101.47 at 3:31 p.m. in New York trading, its biggest intraday gain since March. Reuters cited people familiar with the matter in its report.
The U.K. company, with a market value of $2.56 billion, develops drugs derived from cannabis. Its leading asset is an experimental treatment for epilepsy, and it’s also working on candidates for cancer, type 2 diabetes and schizophrenia. GW has one approved drug, Sativex, which is used to control involuntary muscle spasms from multiple sclerosis.
Insys Therapeutics Inc., which develops drugs based on synthetic cannabis, rose 5 percent to $15.67.
GW, based in Cambridge, England, isn’t currently interested in a sale, Reuters reported, citing people familiar with the matter. A representative for GW declined to comment.
Cannabis is increasingly being recognised for its uses as a pain reliever and mood stabiliser; confirming what millions of users in the illicit market have testified to for decades. With the tide of public opinion turning there is a race on to secure interests in the sector as companies bet on the potential for further legalisation to be approved in the USA, not least during the November ballot.
GW Pharmaceuticals spiked higher in March and has held a progression of higher reaction lows since, where it has found support in the region of the trend mean on successive occasions. A sustained move below 500p would be required to question potential for continued higher to lateral ranging.
Insys Therapeutics lost downward momentum from early this year and exhibits a rounding characteristic consistent with accumulation. A sustained move above $20 would confirm a return to demand dominance beyond short-term steadying.
Perusing the cannabis section of the Chart Library it is hard not to conclude that a medium-term bull market is clearly evident in related shares.