Thursday August 6, 11:19 AM
REFILE-UPDATE 2-GW says others likely to follow Great Point
LONDON, Aug 6 (Reuters) - GW Pharmaceuticals Plc, which makes cannabis-based medicine for treating the symptoms of multiple sclerosis, said on Thursday that other institutional investors were likely to follow Great Point in taking a stake in the company.
Earlier it said it had raised $11.2 million by selling new shares to two institutions, U.S.-based Great Point Partners and M&G Investment Management, which is already its largest institutional shareholder.
Chief Executive Justin Gover said he thought it is 'likely' that other U.S. institutional investors would follow, because of the high profile of Great Point.
'I think it's quite likely (to increase U.S. investors), it would hopefully send a strong signal to other U.S. investors,' he told Reuters.
Gover added that the company's strategy was to increase the number of institutional investors, although he is not planning to issue more shares.
'We think that there is an evolution of this business that we can see over the next few years and we want our shareholder base to reflect that,' he said.
Great Point, which made an unsolicited request to take a significant stake in the company, is to subscribe for 7.6 million new shares at 78 pence per share.
In addition, GW has signed an agreement with M&G Investment Management to buy another 0.9 million shares at the same price to maintain its shareholding percentage.
By 0927 GMT shares had risen by almost 12 percent on the news, with analysts pointing out that the profile of Great Point was an endorsement for the company.
'Apparently Great Point are ... often seen as a fundraising leader so people look at what these guys are doing and end up following,' analyst Paul Cuddon at KBC Peel Hunt told Reuters.
David Kroin, a founder of Great Point, said in a statement: 'Great Point has been following GW for some time and has identified it as a compelling investment opportunity, particularly following the recent strong clinical data on Sativex.'
Clinical trials have shown GW's drug Sativex, which is sprayed under the tongue, reduces spasticity in multiple sclerosis patients who do not respond adequately to existing therapies. The medicine is also being developed for cancer pain.
If it is approved, Sativex will be marketed in Britain by Germany's Bayer AG (Xetra: 575200 - news) and in the rest of Europe by Spain's Almirall (Madrid: ALM.MC - news) .
Further clinical trials need to be completed before the medicine is ready for submission for approval in the United States, where GW's partner is Otsuka (OSUKF.PK - news) .
Sativex -- extracted from marijuana plants grown at secret locations in the English countryside -- became the world's first cannabis medicine to win regulatory approval when it was approved in Canada in 2005.
(Reporting by Ben Hirschler and Ben Deighton; Editing by Simon Jessop) Keywords: GWPHARMA/
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