By writer to www.fool.com
GW Prescription drugs (NASDAQ:GWPH) and Cara Therapeutics (NASDAQ:CARA) usually get lumped collectively as cannabinoid-focused biotechs. Nonetheless, that label is basically solely relevant to GW Prescription drugs. Though Cara Therapeutics has achieved some preclinical testing on a cannabinoid receptor agonist and holds some patents on cannabinoid compounds, the corporate would not actually concentrate on cannabinoid growth.
Thus far in 2020, GW has been the larger winner, gaining 16% in comparison with Cara’s single-digit-percentage enhance. However which of those two biotech stocks is the higher choose over the long term?
The case for GW Prescription drugs
Almost every thing goes nicely for GW Prescription drugs today. The corporate hit a home run with its first-quarter results. Its income greater than tripled yr over yr. Though GW is not worthwhile but, it is making vital progress towards that objective.
CBD drug Epidiolex has confirmed to be a much bigger industrial success than many anticipated. That success to date has come primarily within the U.S. in treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), each of that are two uncommon types of epilepsy.
Nonetheless, the drug can also be gaining momentum in Europe (beneath the model identify Epidyolex) for each indications. That momentum ought to speed up because of the UK not too long ago reclassifying Epidyolex as a Schedule 5 drug, which considerably lowers regulatory restrictions.
GW might additionally quickly take pleasure in one other gross sales enhance within the U.S. market. The biotech awaits an FDA approval determination for Epidiolex in treating tuberous sclerosis advanced (TSC) by July 31, 2020. Assuming the FDA provides a thumbs up, GW plans to start advertising and marketing the drug for the brand new indication in August. It additionally hopes to win European regulatory approval for the TSC indication.
One other accredited indication could possibly be on the best way for Epidiolex as nicely. GW is evaluating the CBD drug in a part three examine in treating Rett syndrome, a uncommon genetic neurological dysfunction.
Whereas Epidiolex is definitely GW Prescription drugs’ most vital product, the biotech’s pipeline additionally consists of different cannabinoid drug candidates. Nabiximols is already marketed outdoors the U.S. beneath the model identify Sativex as a therapy for a number of sclerosis spasticity. GW has a late-stage medical trial beneath manner within the U.S. with the hope of acquiring FDA approval. It is also evaluating different cannabinoids in part 1 and part 2 research focusing on ailments together with epilepsy, autism spectrum problems, and schizophrenia.
The case for Cara Therapeutics
Not like GW Prescription drugs, Cara Therapeutics would not have an accredited drug in the marketplace but. That would quickly change, although.
The corporate reported positive results in April from a late-stage examine of Korsuva injection in treating moderate-to-severe continual kidney disease-associated pruritis (CKD-aP) in sufferers on hemodialysis. No less than 40% of sufferers on dialysis expertise the itching situation.
Cara already has an enormous accomplice lined up for commercialization of Korsuva injection, Vifor Fresenius Medical Care Renal Pharma (VFMCRP). The biotech expects to file for U.S. and European approvals within the second half of 2020.
There are extra alternatives for Korsuva as nicely. Cara hopes to start a late-stage medical examine of oral Korsuva later this yr in treating sufferers with CKD-aP who aren’t on dialysis. It is conducting part 2 research of oral Korsuva in treating pruritis related to atopic dermatitis and in treating pruritis related to major biliary cholangitis (PBC). Outcomes from each research are anticipated later this yr.
Wall Avenue analysts assume that Korsuva injection might probably obtain peak annual gross sales of greater than $500 million if accredited. However that is only for the inhabitants of CKD sufferers on hemodialysis. The market potential for the oral model of the drug can be a lot bigger in treating CKD sufferers who aren’t on dialysis and within the different focused indications.
GW Prescription drugs is the safer choose. Epidiolex is performing nicely. I think there is a good likelihood that the drug will win regulatory approvals in treating TSC, which might increase the potential market considerably. GW must also have respectable prospects of profitable U.S. approval of nabiximols.
However extra aggressive buyers would possibly choose Cara Therapeutics. The corporate’s market cap is just round $800 million. If Korsuva injection wins FDA approval later this yr (which I feel will occur), the inventory ought to soar. My hunch is that the drug shall be successful, particularly with the backing of VFMCRP.
I feel each of those shares are enticing. Which one is the higher choose is determined by your danger tolerance.
— to www.fool.com