MJ Stocks Analysis

[newmedman]

GW receives milestone payments as of now.. They have never turned a profit..

They actually recorded a 7 mil loss last year.
http://files.shareholder.com/downloads/AMDA-1TW341/2604458237x0x709264/D35EA6D1-698A-46A2-9751-1A48E0C03A3B/GW_2013_20-F.pdf
We depend substantially on the commercial expertise of our collaboration partners.
We do not have a sales and marketing operation and rely on the expertise and commercial skills of
our collaboration partners to sell Sativex. We have entered into agreements for the commercialization
of Sativex with Almirall S.A., or Almirall, in Europe (excluding the United Kingdom) and Mexico;
Otsuka in the United States; Novartis Pharma AG, or Novartis, in Australia and New Zealand, Asia
(excluding Japan, China and Hong Kong), the Middle East (excluding Israel) and Africa; Bayer
HealthCare AG in the United Kingdom and Canada; and Neopharm Group in Israel. Our ability to
successfully market and sell Sativex in each of these markets depends entirely on the expertise and
commercial skills of our collaboration partners. Our partners have the right, under certain
circumstances, to terminate their agreements with us, and three of our partners, Almirall, Otsuka and
Novartis, have the right to terminate their agreements with us without cause. A failure by our partners
to successfully market Sativex, or the termination of agreements with our partners, will have a material
adverse effect on our business, results of operations and financial condition.
We rely heavily on Otsuka for funding of our research and development programs and overhead, and Otsuka
is a joint owner of the intellectual property resulting from our pre-clinical research collaboration.
We rely heavily on our relationship with Otsuka for the funding of our research and development
programs and for overhead expenses. Under the terms of our agreement with Otsuka with respect to
Sativex in the United States, Otsuka funds all pre-clinical and clinical trials for the development of
Sativex in the treatment of cancer pain. As provided for under the terms of this agreement, we also
expect Otsuka to fund pre-clinical and clinical trials required for the development of Sativex in the
treatment of MS spasticity in the United States. If Otsuka were to terminate this agreement, we would
be required to find alternative funding for our clinical program for the development of Sativex in the
treatment of cancer pain and MS spasticity or face substantial delays in, or possible termination of, that
program. In addition, under a separate global research collaboration for research of cannabinoids in
central nervous system, or CNS, and oncology, we received funds from Otsuka from 2007 to June 2013.
The term of this research collaboration agreement with Otsuka ended in June 2013 and we expect an
increase in our GW-funded research and development expenditure as a result of this change.
In addition, the research collaboration agreement provided that all intellectual property rights
(including both patents and non-manufacturing related know-how) that was conceived by either Otsuka
or us during the course of the collaboration is to be jointly owned by Otsuka and us. We have
11 patent families with 219 jointly owned patent applications relating to our collaboration with Otsuka,
including those directed to the use of Sativex in the CNS and/or oncology field or that are otherwise
relevant to Sativex. Because Otsuka exercises some control over this jointly owned intellectual property,
we may need to seek Otsuka’s consent to pursue, use, license and/or enforce some of this collaboration
intellectual property in the future. In addition, Otsuka has the right to develop and commercialize a
synthetic cannabinoid molecule product (a molecule not based on a phytocannabinoid but which has an
effect on the endocannabinoid system) subject to payment of a royalty to us. An unexpected
deterioration in our relationship with Otsuka would have a material adverse effect on our business,
reputation, results of operations and financial condition.