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6242-01 final


THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about
the contents of this document or as to the action you should take, you are recommended immediately to seek your
own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent
financial adviser authorised pursuant to the Financial Services Act 1986, who specialises in advising on the acquisition
of shares and other securities.
A copy of this document, which comprises a prospectus and has been drawn up in accordance with the Public Offersof Securities Regulations 1995 (as amended) (the "POS Regulations"), has been delivered to the Registrar ofCompanies in England and Wales for registration in accordance with regulation 4(2) of the POS Regulations. Copies ofthis document will be available free of charge to the public during normal business hours on any day (Saturdays,Sundays and public holidays excepted) at the offices of Collins Stewart, 9th Floor, 88 Wood Street, London EC2V 7QRfor a period of one month from Admission, which is expected to take place on 28June 2001.
The directors of the Company, whose names appear on page 7 of this document, accept responsibility for theinformation contained in this document including individual and collective responsibility for compliance with the AIMRules. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that suchis the case) the information contained in this document is in accordance with the facts and there is no other materialinformation the omission of which is likely to affect the import of such information.
Application has been made for the Ordinary Shares issued and to be issued pursuant to the Placing to be admitted
to trading on the Alternative Investment Market of the London Stock Exchange ("AIM"). AIM is a market designed
primarily for emerging or smaller companies to which a higher investment risk than that associated with
established companies tends to be attached. AIM securities are not Officially Listed. A prospective investor should
be aware of the potential risks in investing in such companies and should make the decision to invest only after
careful consideration and consultation with his or her own independent financial adviser. Further, the London
Stock Exchange has not itself examined or approved the contents of this document. It is expected that dealings in
the Ordinary Shares will commence on AIM on 28 June 2001.

Your attention is drawn to the section entitled "Risk Factors" on pages 32 to 35 of this document.
GW Pharmaceuticals plc
(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 4160917) Placing of 13,736,264 ordinary shares of 0.1p each at 182p per share
Admission to trading on
the Alternative Investment Market
of the whole of the issued ordinary share capital
Nominated Adviser and Broker
Collins Stewart Limited
All the Ordinary Shares now being placed will rank, on Admission, pari passu in all respects with the existing issuedOrdinary Shares of the Company including the right to receive all dividends or other distributions hereafter declared,paid or made.
Collins Stewart, which is a member of and regulated by The Securities and Futures Authority Limited, is actingexclusively for GW Pharmaceuticals plc and no-one else in connection with the Placing and the proposed Admission.
Collins Stewart will not regard any other person as its customer or be responsible to any other person for providing theprotections afforded to customers of Collins Stewart nor for providing advice in relation to the transactions andarrangements detailed in this document. Collins Stewart is not making any representation or warranty, express orimplied, as to the contents of this document.
This document does not constitute an offer to buy or to subscribe for, or the solicitation of an offer to buy or subscribefor, Ordinary Shares in any jurisdiction in which such offer or solicitation is unlawful. In particular the Ordinary Sharesoffered by this document have not been, and will not be, registered under the United States Securities Act of 1933 asamended (the "Securities Act") or qualified for sale under the laws of any state of the United States or under theapplicable laws of any of Canada, Australia or Japan and, subject to certain exceptions, may not be offered or sold inthe United States or to, or for the account or benefit of, US persons (as such term is defined in Regulation S under theSecurities Act) or to any national, resident or citizen of Canada, Australia or Japan. Neither this document nor any copyof it may be sent to or taken into the United States, Canada, Australia or Japan, nor may it be distributed to any USperson (within the meaning of Regulation S under the Securities Act).


Glossary of terms
Expected Placing and Admission timetable
Directors and advisers
Information on the Group
History and development UK Government policy Cannabis-based medicines Product portfolio Drug delivery technologies Patient reports from clinical trials Market strategy and opportunity Cultivation and production Intellectual property rights Official support Legislative position Directors, senior management and employees Operational structure The Placing and Admission and related matters
Financial information, Current Trading and Prospects,
Reasons for the Placing and use of proceeds

Risk factors
Accountants' report on GW Pharmaceuticals plc
Accountants' report on GW Pharma Limited
PART VIII


The following definitions apply throughout this document unless the context requires otherwise: the Companies Act 1985 the admission of the Ordinary Shares, issued and to be issued pursuantto the Placing, to trading on AIM becoming effective in accordance withthe AIM Rules "All Employee Scheme" the GW Pharmaceuticals All Employee Share Scheme, adopted by GWPharma on 16 August 2000 the Alternative Investment Market of the London Stock Exchange the rules published by the London Stock Exchange governing admissionto and the operation of AIM "Approved Scheme" the GW Pharmaceuticals Approved Share Option Scheme 2001,adopted by the Company on 31 May 2001 the Board of Directors of the Company "Collins Stewart" Collins Stewart Limited, the Company's nominated adviser and broker(as defined in the AIM Rules) the principles of good governance and code of best practice prepared bythe Committee on Corporate Governance, chaired by Sir Ronald Hampeland published in June 1998 GW Pharmaceuticals plc, the ultimate holding company of the Group the relevant system (as defined in the CREST Regulations) in respect ofwhich CRESTCo Limited is the Operator (as defined in the CRESTRegulations) in accordance with which securities may be held andtransferred in uncertificated form "CREST Regulations" The Uncertificated Securities Regulations 1995 (SI 1995 No. 3272) the directors of the Company, whose names are set out on page 7 of thisdocument "Executive Scheme" the GW Pharmaceuticals Unapproved Share Option Scheme 2001,adopted by the Company on 31 May 2001 Food and Drug Administration, a United States government organisation "First House of Lords Report" the report entitled "Cannabis: The Scientific and Medical Evidence",issued in November 1998 by the House of Lords (Select Committee onScience and Technology) "GW" or "the Group" the Company and, where applicable, its subsidiaries G-Pharm Limited, a wholly owned subsidiary of GW Pharma GW Pharma Limited, a wholly owned subsidiary of the Company and themain operating company of the Group "GW Pharma Approved the GW Pharmaceuticals Approved Company Share Option Scheme, adopted by GW Pharma on 16 August 2000 "GW Pharma Executive the GW Pharmaceuticals Executive Share Option Scheme, adopted by GW Pharma on 16 August 2000 "London Stock Exchange" London Stock Exchange plc Medicines Control Agency


"Misuse of Drugs Act" Misuse of Drugs Act 1971 the Official List of the UK Listing Authority "Ordinary Shares" ordinary shares of 0.1p each in the capital of the Company the identification code or membership number used in CREST to identifya particular CREST member or other CREST participant the placing by Collins Stewart of the Placing Shares at the Placing Pricepursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 21 June 2001 between the Company,the Directors and Collins Stewart relating to the Placing, as described inparagraph 8 of Part VIII of this document 182p per Ordinary Share the 13,736,264 new Ordinary Shares to be issued in the Placing "POS Regulations" the Public Offers of Securities Regulations 1995 (as amended) "2000 SCRIP Report" the SCRIP report, entitled "Advances in Pain Management", publishedin February 2000 "SCRIP Yearbook 2001" the SCRIP yearbook 2001, published in January 2001 "1999 SCRIP Report" the SCRIP report, entitled "Innovations in Arthritis treatment: A marketrevolution", published in May 1999 "Second House of Lords the report entitled "Therapeutic Uses of Cannabis", issued in March 2001 by the House of Lords (Select Committee on Science andTechnology) holders of the Ordinary Shares "UK" or "United Kingdom" United Kingdom of Great Britain and Northern Ireland "US" or "United States" United States of America, its territories and possessions, any state ofthe United States and the District of Columbia


GLOSSARY OF TERMS
The following terms apply throughout this document unless the context requires otherwise: A drug used to prevent nausea and vomiting.
A drug which relieves involuntary muscle spasm.
Inflammation of the arachnoid mater (membrane) surrounding the brainand spinal cord which results in severe, incapacitating pain andneurological disability.
Molecules found only in the cannabis plant.
Plants within a given botanical species defined by their unusual chemicalcomposition.
Occurring without an obvious external cause to the body and believed toresult from an internal cause (ie endogenous cannabinoids are producedinternally within the body).
A condition for which a specific medication is recommended for use.
The capability of a substance to cause damage to genetic material.
Used to describe symptoms caused by "neuropathy" ie damage to theperipheral or central nervous system which may result through injury orsurgery, disease (eg diabetes, cancer) or dysfunction of the nervoussystem itself.
Drug derived from opium or a chemically related derivative. Also knownas "opiates".
The study of how substances are absorbed into, distributed, brokendown and excreted by the body.
Phase I, II and III trials Clinical trials carried out in humans to establish the safety and efficacy ofa drug.
Phase I clinical trials are carried out in very limited numbers of healthyvolunteers to establish how the human body handles the test medicineand what, if any, toxic effects are experienced.
Phase II trials are the first trials of a medicine in patients (as opposed tohealthy volunteers) and are intended to give an idea of efficacy, whichdose is optimal and some preliminary information on safety.
Phase III trials are the major efficacy and safety trials and involve muchlarger numbers of patients.
Adjusting the dosage of a drug oneself in order to achieve a given effect.
Meaning "under the tongue" (ie a sub-lingual spray is applied byspraying under the tongue).


Number of Ordinary Shares in issue prior to the Placing Number of Placing Shares being issued Number of Ordinary Shares in issue following the Placing Estimated expenses of the Placing Estimated net proceeds of the Placing receivable by the Company Percentage of the enlarged ordinary issued share capital available in the Placing 14.3 per cent.
Market capitalisation at the Placing Price EXPECTED PLACING AND ADMISSION TIMETABLE
Trading to commence in the enlarged issued ordinary share capital on AIM CREST accounts credited Where applicable, definitive share certificates despatched


DIRECTORS AND ADVISERS
Dr Geoffrey William Guy (Executive Chairman)Justin David Gover (Managing Director)Dr Brian Anthony Whittle (Scientific Director)Jonathan Michael Eastfield Laughton (Finance Director)David Champion Mace (Non-Executive Director)Peter Mountford (Non-Executive Director) all of: Porton Down Science Park, Salisbury, Wiltshire SP4 0JQ Company Secretary and
Jonathan Michael Eastfield Laughton, ACA Porton Down Science ParkSalisburyWiltshire SP4 0JQ Collins Stewart Limited and Broker
9th Floor88 Wood StreetLondon EC2V 7QR and Auditors
Abbots HouseAbbey StreetReadingBerkshire RG1 3BD Solicitors to the Company Rowe & Maw
Solicitors to the
Hammond Suddards Edge 20 Black Friars Lane Nominated Adviser 7 Devonshire Square
and Broker
Cutlers GardensLondon EC2M 4YH 34 Beckenham Road Birmingham B2 4JU BeckenhamKent BR3 4TU Public Relations Advisers
Bridgehead Technologies Ltd Communications Ltd Pera Innovation Park Melton MowbrayLeicestershire LE13 0PB


The following information is derived from, and should be read in conjunction with, the full text of thisdocument.
GW is a pharmaceutical group developing a portfolio of prescription medicines derived from cannabis tomeet patient needs in a wide range of therapeutic conditions. GW maintains control over all aspects of theproduct development process – botanical research, cultivation, extraction, formulation into drug deliverytechnologies, clinical trials and regulatory affairs.
The Group has a broad product portfolio and the Directors have identified certain key markets for itsproducts including Multiple Sclerosis, Cancer Pain and Rheumatoid Arthritis.
The Group's product for Multiple Sclerosis has recently entered into pivotal Phase III clinical trials andother products are in Phase II clinical trials. GW's products are to be administered by means ofpharmaceutical delivery technologies including a sub-lingual (under the tongue) spray, sub-lingual tabletsand an inhaler.
The Directors believe that GW has a strong competitive position worldwide in relation to cannabis-basedmedicines and that there are considerable barriers to entry to deter potential competitors. The Directorsbelieve that, in particular, GW has the following key strengths: a broad product portfolio under development; its product for Multiple Sclerosis has already entered into final Phase III trials programme, and itsproducts for several other markets are in Phase II clinical trials; the long history of medicinal use of cannabis allows for rapid development timelines of GW'smedicines; there is a recognised need for prescribed cannabis-based medicines; a management team with a proven track record and relevant experience; its programme has the support of the UK Government and governments in North America andEurope; and it is currently, so far as the Directors are aware, the sole producer of pharmaceutical grade cannabisplant materials under licence in the world.
The Directors believe that these key strengths will enable the Company to capitalise upon the substantialmarket opportunity for GW's medicines.
The beneficial therapeutic effects reported by patients who use cannabis appear to result from theinteraction of certain cannabinoid molecules in the plant. These cannabinoids provide GW with a richsource of new medicines. Given the long history of medicinal use of cannabis, the Directors believe thatthe development of its cannabis-based medicines holds a greater certainty of success than many otherbiopharmaceutical or biotechnology programmes.
GW is developing a broad product portfolio of cannabis-based medicines. These are derived fromstandardised whole extracts of proprietary cannabis plant varieties which have been bred to provide apre-determined content of selected cannabinoids. Extracts from plant varieties are then incorporated intoa range of drug delivery technologies including a sub-lingual spray, sub-lingual tablets and an inhaler. Theseproducts undergo a full pharmaceutical development programme, including pre-clinical and clinicaltesting, with a view to obtaining approvals from regulatory authorities around the world.
Market strategy and opportunity
GW's strategy is to produce cannabis-based medicines for the worldwide market. Whilst GW will continueto regard its activities in the UK and Europe as its primary focus, it intends to develop further its activities inthe United States. In addition, the Group will seek to roll out its products across the rest of the world.
The Directors have selected a number of medical conditions as its initial target markets. These are asfollows: Nerve damage pain and dysfunction, principally Multiple Sclerosis; and Cancer Pain.
Results from GW's early clinical trials in the initial target markets have provided the Company with theconfidence to accelerate the product timetables for the medium and longer term opportunities in thepipeline.
Further potential markets for the Group's products include Rheumatoid Arthritis, Stroke/Head Injury,Migraine, Inflammatory Bowel Disease (IBD), Schizophrenia, Epilepsy and Movement Disorders (such asParkinson's disease). All of these markets have been selected on the basis of evidence supporting thepotential effectiveness of cannabis-based medicines.
The Directors believe that the market opportunity for GW's medicines is substantial.
GW's programme has the support of the UK Government and has been welcomed by other governmentsand organisations around the world. The UK Government has stated repeatedly that it will permitprescription of cannabis-based medicines, subject to regulatory approval from the Medicines ControlAgency (MCA).
Current Trading and Prospects
The Group has started its Phase III trials programme relating to Multiple Sclerosis, and the Directorsbelieve that the prospects for revenue generation in this market are good. There are approximately 2.5million people worldwide suffering from Multiple Sclerosis. The Directors believe that GW's product couldtake a significant share of this market.
In addition, the Directors expect to commence Phase III trials in Cancer Pain during the second half of 2001and to expand Phase II trials for other target markets. The Directors believe the size of Cancer Pain andother target markets to be substantial and to offer significant opportunities for the Group.
The Directors expect that products for Multiple Sclerosis and Cancer Pain will be submitted for regulatoryapproval to the MCA in 2003 and, subject to such regulatory approval being granted, being made availablefor sale in early 2004.
Reasons for the Placing and use of proceeds
The Placing will raise approximately £23.5 million, net of expenses, for the Company. These proceeds willbe used to: fund the expansion of its late stage clinical trials; expand the cultivation and production facilities in anticipation of the initial commercial launch of itsproducts; and accelerate the Group's international research activities in Europe and North America.
The Directors believe that the increased financial resources and enhanced profile of the Company withinthe market place will greatly assist GW in its product commercialisation strategy.
Admission to AIM will also provide opportunities for the Company's employees to participate in the futuresuccess of the Company and should help attract and retain high calibre staff.
Information on the Group
GW is a pharmaceutical group developing a portfolio of prescription medicines derived from cannabis tomeet patient needs in a wide range of therapeutic conditions. GW maintains control over all aspects of theproduct development process – botanical research, cultivation, extraction, formulation into drug deliverytechnologies, clinical trials and regulatory affairs.
The Group has a broad product portfolio and the Directors have identified certain key markets for itsproducts including Multiple Sclerosis, Cancer Pain and Rheumatoid Arthritis.
The Group's product for Multiple Sclerosis has recently entered into pivotal Phase III clinical trials andother products are in Phase II clinical trials. GW's products are to be administered by means ofpharmaceutical delivery technologies including a sub-lingual spray, sub-lingual tablets and an inhaler.
The Directors believe that GW has a strong competitive position worldwide in relation to cannabis-basedmedicines and that there are considerable barriers to entry to deter potential competitors. The Directorsbelieve that, in particular, GW has the following key strengths: it has a broad product portfolio under development; its product for Multiple Sclerosis has already entered into final Phase III trials programme, and itsproducts for several other markets are in Phase II clinical trials; the long history of medicinal use of cannabis allows for rapid development timelines of GW'smedicines; there is a recognised need for prescribed cannabis-based medicines; a management team with a proven track record and relevant experience; its programme has the support of the UK Government and governments in North America andEurope; and it is currently, so far as the Directors are aware, the sole producer of pharmaceutical grade cannabisplant materials under licence in the world.
The Directors believe that these key strengths will enable the Company to capitalise upon the substantialmarket opportunity for GW's medicines.
History and development
The Group was founded in early 1998 by Dr Geoffrey Guy. Shortly thereafter, Dr Guy was joined byDr Brian Whittle, thereby reuniting the team that previously co-founded the company which becamePhytopharm plc, the plant medicines company, which floated on the Official List of the London StockExchange in April 1996. GW was first granted licences by the Home Office in June 1998 to cultivate,produce, possess and supply cannabis for medical research purposes. Since its inception, GW has workedclosely with officials from the Home Office.
GW commenced the cultivation of cannabis plant varieties in August 1998. In November 1998 the FirstHouse of Lords Report was issued, recommending that clinical trials of cannabis medicines be carried outas a matter of urgency and warmly welcoming GW's research programme. In March 1999 in the UnitedStates, the National Academy of Sciences, Institute of Medicine published a White House commissionedreport recommending that further research be conducted into the therapeutic properties of cannabis andcannabinoids. In September 1999, GW commenced its first Phase I human clinical trials in the UK. InMarch 2000, GW received authorisation from the MCA to commence Phase II clinical trials in patients. InMarch 2001, the Second House of Lords Report confirmed the UK Government's intention to permit theprescription of cannabis-based medicines subject to the approval of the MCA. In May 2001, GW enteredinto its pivotal Phase III clinical trials programme for its Multiple Sclerosis product.
UK Government policy
Cannabis is currently designated under Section 7 of the Misuse of Drugs Act 1971 which provides that thedrug can only be produced, possessed and supplied for research purposes under licence from the HomeOffice.
The UK Government has stated repeatedly that it will permit, subject to regulatory approval from the MCA,cannabis-based medicines to be re-scheduled under these regulations so as to enable their generalprescription.
In February 2001 Charles Clarke MP, Minister of State at the Home Office, submitted oral and writtenevidence on UK Government policy to the House of Lords Science & Technology Select Committee. Hestated the Government's policy to be as follows: "If the clinical trials into cannabis are successful and they do lead to a medical preparation which isapproved by the Medicines Control Agency, the Government is absolutely clear that we are willing toamend the Misuse of Drugs Regulations to allow the prescribing of such medicine." The amendments referred to above would not relax existing controls on illicit use of herbal cannabismaterial, rather they would permit only the prescription of specific cannabis-based medicines approved bythe regulatory authorities.
Further information relating to the legislative position surrounding the possible prescription of GW's futureproducts is set out on pages 21 and 22 of this document.
The beneficial therapeutic effects reported by patients who use cannabis appear to result from theinteraction of certain cannabinoid molecules in the plant. These cannabinoids provide GW with a richsource of new medicines. As far as the Directors are aware, GW is currently the sole producer ofpharmaceutical grade cannabis plant materials under licence in the world, ie plants specifically grown toform the basis of prescription medicines which meet the strict standards required by pharmaceuticalregulatory authorities.
GW is developing a broad product portfolio of cannabis-based medicines. These are derived fromstandardised whole extracts of proprietary cannabis plant varieties that have been bred to provide apre-determined content of selected cannabinoids. Extracts from these plant varieties are thenincorporated into a range of drug delivery technologies, including a sub-lingual spray, sub-lingual tabletsand an inhalation device. These products undergo a full pharmaceutical development programme,including pre-clinical and clinical testing, with a view to obtaining approvals from regulatory authoritiesaround the world.
Given that cannabis has a long history of medicinal use, relative to many pharmaceuticals, cannabis-basedmedicines benefit from short development timelines. The Directors believe that this significantly reducesthe cost of development and, subject to MCA approval, should mean that revenues from product sales willbe relatively quick to materialise. The Directors believe that the development of GW's cannabis-basedmedicines holds a greater certainty of success than many other biopharmaceutical or biotechnologyprogrammes.
Cannabinoids are molecules unique to the cannabis plant. There are over 60 such cannabinoids in the plantand GW's programme focuses on a selected number of these, including ∆9–Tetrahydrocannabinol (THC), ∆9–THC Propyl Analogue (THC–V), Cannabidiol (CBD), Cannabidiol Propyl Analogue (CBD–V), Cannabinol(CBN), Cannabichromene (CBC), Cannabichromene Propyl Analogue (CBC–V) and Cannabigerol (CBG).
THC is the cannabinoid that has to date received most attention from the scientific and lay community.
However, THC and other cannabinoids have been shown to have analgesic, anti-spasmodic,anti-convulsant, anti-tremor, anti-psychotic, anti-inflammatory, anti-emetic and appetite-stimulantproperties. Research is ongoing into the neuroprotective and immunomodulatory effects of cannabinoids.
To date, GW has primarily focused on the two principal cannabinoids THC and CBD.
The different beneficial therapeutic effects of cannabis result from interaction of the differentcannabinoids and not simply from one specific cannabinoid. Consequently, GW's portfolio ofpharmaceutical products consists of cannabinoids in different ratios.
Standardised whole plant extracts
GW's medicines are derived from whole extracts of selected cannabis plant varieties. The Directorsbelieve this approach has a number of advantages: hundreds of years of cannabis use provide compelling evidence of safety. The First House of LordsReport stated that there have been no reported deaths "as a direct result and immediateconsequence of recreational or medical use". The therapeutic index for cannabis (the ratio betweenan effective and a lethal dose) is estimated to be 40,000 to 1 (source: Journal of American MedicalAssociation). By contrast, the equivalent ratio for Aspirin is approximately 23 to 1 and for Morphine is50 to 1 (source: Merck Index); medical literature contains significant amounts of evidence pertaining to the potential therapeuticbenefit of cannabis; the development of a number of medicines from a single plant species means that much of the earlypharmaceutical development work carried out by GW can be applied to a range of productopportunities, thereby avoiding the need to repeat significant amounts of work for each additionalproduct in the portfolio; human clinical trials can commence at a relatively early stage in the development process – the firstPhase II trials of GW's medicines commenced only 20 months after its first crop was planted. Justover one year later, GW proceeded into its first Phase III trials programme; and faster development timescales mean the overall costs of development are significantly reduced.
Cannabinoid mechanism of action
Recent discoveries have demonstrated the mechanisms through which cannabis has medical effects inthe human body. The discovery of two cannabinoid receptors in humans demonstrates how cannabis andits constituents may exert some of their pharmacological effects and the discovery of endogenouscannabinoids has further improved the scientific understanding of the therapeutic potential of cannabis.
Medical effects of cannabis not related to psychoactive effects
Evidence from GW's clinical trials shows that patients can obtain the medical benefits of cannabis beforeany feeling of a "high". Patients emphasise that they seek to obtain the medical benefits withoutintoxication. This is similar to the experience of patients who use self-administered morphine for paincontrol. They control the dose to relieve their pain while trying to minimise any side effects.
Pre-clinical studies are carried out in order to satisfy regulatory authorities as to the safety of testmedicines for use by humans. GW has to date examined the safety of the two cannabinoids which formthe basis of its first products – THC and CBD. The MCA has stated that GW has provided satisfactorypre-clinical safety information on THC and that no further pre-clinical studies on this molecule are required.
GW has to date conducted limited pre-clinical safety studies on CBD. To date these studies havedemonstrated no relevant safety concerns. However, a longer term carcinogenicity study is required aspart of the MCA's standard requirements for products which are likely to be taken by patients for extendedperiods of time. GW has been advised that such a carcinogenicity study will be required and this iscurrently being planned. The MCA has advised that a CBD-containing product may in fact be approvedprior to completion of the carcinogenicity study so long as there were to be strict label guidance on usageof the product.
Product portfolio
GW has a broad product portfolio under development, addressing several key markets. Certain products
are already in late stage clinical trials and are progressing towards regulatory submission. The product
portfolio is classified so as to group products by their cannabinoid content. GW seeks to expand its product
portfolio through the development of new cannabinoid products as well as new drug delivery systems. A
table, as extracted from the Expert's Report in Part V, setting out GW's product portfolio under
development in terms of indication and stage of development in the UK is set out below.
Multiple Sclerosis (narrow ratio) Spinal Cord Injury Peripheral Neuropathy (Diabetes/AIDS) Other Neurogenic Pain (Arachnoiditis/Phantom Limb Pain etc) Rheumatoid Arthritis Inflammatory Bowel Diseases Psychotic Disorders (Schizophrenia) Stroke/Head Injury Pivotal regulatory programme underway Product evaluated in Phase II trials Early stage plans being formulated The Group is developing distinct products which address many of the conditions for which cannabis iscommonly understood to be beneficial. A number of patients already use cannabis for many of the aboveconditions and many more are aware of the benefits of cannabis but are unwilling to smoke or break thelaw. Consequently the Directors believe GW is in the favourable position of having an existing base marketfor its products before such products have been fully developed.
Having performed the necessary primary research for the first set of products to enter Phase II clinicaltrials, it should not be necessary to repeat the early pre-clinical and clinical work for each new target marketfor which each product can be developed. Therefore, additional medical conditions may require onlylimited further research and development before proceeding to regulatory submission.
Although the development of plant-based medicines is not new, most medicines currently developed bypharmaceutical companies are generally new chemical entities ("NCEs"). Plant-based products includeDigoxin (originating from the foxglove) used in the treatment of heart disease and Taxol (a compoundfound in Pacific Yew) which is used in the treatment of breast cancer. The experience of GW'smanagement in liaising with the regulatory authorities in respect of plant-based medicines, previouslygained at Phytopharm plc as well as in the last few years with GW, has been a key factor in the rapidprogress of GW's research programme to date.
Drug delivery technologies
GW is using three drug delivery technologies in the development of its products, specifically: Sub-lingual spray This spray technology is being utilised for the Group's lead product which is now in Phase III trials and isbeing supplied by a leading spray technology provider. The spray pump is already approved by the MCA inthe UK and similar agencies elsewhere for use with specific medicines.
Sub-lingual tablet These tablets, which are intended to dissolve under the tongue rather than be swallowed by patients, havebeen developed in-house by the GW team. They have been used in one of the Group's Phase II trials.
GW is developing an innovative inhalation device for the delivery of its medicines. The Directors expectthat this device will enable patients to benefit from the rapid relief associated with inhaled delivery butwithout exposure to the carcinogens produced when cannabis is smoked. GW has entered into apartnership with a major UK electronics company to support this project. Intellectual proprietary rightsrelating to this technology will be owned exclusively by the Group.
First trials using this device are expected to be underway by the end of this year. This device has potentialfor use in the administration of non-cannabis products and GW will also be exploring its wider commercialapplications during the course of its development. The development of this device is being partly fundedby a grant of approximately £150,000 awarded under the UK Government's SMART award scheme. GW is developing specialist security technology which can be applied to all of its drug delivery systems.
The aim of this anti-diversionary technology is to prevent any potential abuse of cannabis-basedmedicines. In addition, this technology is being designed to enable the recording and remote monitoring ofpatient usage. The technology should recognise and prevent any abnormal use that differs from expectedprescribed usage. Such data would itself have intrinsic value and would also allow for efficient monitoringin clinical trials. The first set of prototypes for the technology as applied to the sub-lingual spray pump hasbeen developed and two patent applications have been filed.
This technology has potential applications for the delivery of other drugs, in particular controlled drugssuch as opiates and benzodiazapenes. GW will in due course be evaluating options for the licensing of thistechnology to other pharmaceutical companies.
Patient reports from clinical trials
GW has to date received approval from the MCA to commence clinical trials in patients for relief of pain ofneurological origin and defects of neurological function in Multiple Sclerosis, Spinal Cord Injury, PeripheralNerve Injury, Neuro-Invasive Cancer and Dystonias as well as for relief of pain and inflammation inRheumatoid Arthritis.
Clinicians co-ordinating GW's initial clinical trials have reported that the experiences of patientsparticipating in such trials have generally been positive. Approximately 70 patients suffering from eitherMultiple Sclerosis, Spinal Cord Injury, Rheumatoid Arthritis or Arachnoiditis have entered the trials so far.
One of the criteria for selecting such patients was the clinicians' belief that available standard medicationsfor such conditions have been of limited benefit. To date, the clinicians have reported that a substantialproportion of patients have experienced significant alleviation of at least one key symptom and in somecases patients have reported that the improvement in their condition has been sufficient to transform theirlives.
Among the positive effects recorded by the clinicians are relief of neuropathic pain, spasms, spasticity,bladder-related symptoms, partial relief of tremor, improvements in quality and length of sleep andimprovements in mood and measures of overall well-being.
Invariably, in common with other clinical trials of new medicines, certain adverse effects have also beenreported, including unwanted psychoactive effects. The clinicians have reported that a significantproportion of these effects have been transient, of only mild or moderate intensity, and generally welltolerated by the patients. Evidence suggests that the psychoactive adverse effects are more likely to occur early in the treatment periods and usually diminish as a suitable dose is arrived at by self-titration(self-adjustment). The trials have indicated that the medical benefits of cannabis-based medicines aregenerally obtained by patients at doses below those at which these psychoactive effects have beenexperienced. In GW's trials, most patients have been able to self-titrate to a dose which achieves usefulsymptom relief without the handicap of unwanted psychoactive effects which would interfere withordinary daily activities.
In addition to the evidence from GW's clinical trials, GW has received communications from over 3,000patients, many of whom describe the benefits they receive from using herbal cannabis. Approximately2,000 of these 3,000 patients have completed a detailed questionnaire and, together with reports from thetrials, this information provides useful insight into the most responsive medical conditions. The Directorsanticipate that recruitment for trials, often a cause of much delay, will not be a limiting factor for GW.
GW has recently entered into Phase III clinical trials for its Multiple Sclerosis product which will initiallyinvolve approximately 200 patients.
Market strategy and opportunity
GW's strategy is to produce cannabis-based medicines for the worldwide market. Whilst GW will continueto regard its activities in the UK and Europe as its primary focus, it intends to further develop its activities inthe United States. In addition, the Group will seek to roll out its products across the rest of the world.
The Directors have selected a number of medical conditions as its initial target markets. These are asfollows: Nerve Damage Pain and Dysfunction, principally Multiple Sclerosis; and Cancer Pain.
Results from GW's early clinical trials in the initial target markets have provided the Group with theconfidence to accelerate the product timetables for the medium and longer term opportunities in thepipeline.
Further potential markets for the Group's products include Rheumatoid Arthritis, Stroke/Head Injury,Migraine, Inflammatory Bowel Disease (IBD), Schizophrenia, Epilepsy and Movement Disorders (such asParkinson's disease). All of these markets have been selected on the basis of evidence supporting thepotential effectiveness of cannabis-based medicines.
The Directors believe that the market opportunity for GW's medicines is substantial.
Nerve damage pain and dysfunction
The worldwide pain market in 1999 was over $11 billion and is forecast to grow to over $15 billion in 2002(source: 2000 SCRIP Report). With no optimum treatment, neuropathic pain is extremely difficult tomanage resulting in a huge unmet need. It is estimated that 3 million people in the US are affected byneuropathic pain and that most effective oral compounds produce relief in only 50-60 per cent. of researchparticipants (source: SCRIP Report 2000). It is also estimated that at least 1 per cent. of the world'spopulation suffers from neuropathic pain (source: SCRIP Report 2000). Overall, complete pain relief from amonotherapy is only achieved in 10-20 per cent. of chronic pain patients (source: 2000 SCRIP Report andthe SCRIP Yearbook 2001).
Whilst existing medicines are often ineffective in relieving nerve related pain and dysfunction, there issubstantial patient evidence, as well as animal studies that support the fact that cannabis provideseffective treatment (source: First House of Lords Report). It is estimated that about 10,000 people in theUnited Kingdom are using cannabis to relieve pain, muscle spasms and to regulate bladder control (source:Alliance for Cannabis Therapeutics). Patients have stated that cannabis is the only medicine whichprovides effective relief without inducing unwelcome side effects. Some patients also report thatcannabis enables them to reduce or stop altogether use of concomitant medication as well as providingthe ability to precisely control the dose they take by titration (dose adjustment). After reviewing a series oftrials in 1997, the US Society for Neuroscience concluded that "substances similar to or derived frommarijuana − could benefit the more than 97 million Americans who experience some form of pain eachyear".
The Directors believe that there is a substantial potential market for a product addressing nerve damagepain and dysfunction. This market includes medical conditions such as Multiple Sclerosis, Spinal CordInjury, Peripheral Neuropathy and Phantom Limb Pain. Of these, Multiple Sclerosis is expected to be thelargest market and this market is analysed in more detail below.
Multiple Sclerosis affects more than 2.5 million people worldwide (source: World of Multiple SclerosisWebsite), including an estimated 480,000 people in Europe alone (source: Laetoli Man's Pages). It is themost common neurological disease among young adults (source: World of Multiple Sclerosis Website).
Multiple Sclerosis affects twice as many women as men and typically develops between the ages of 20 to40 years old (source: World of Multiple Sclerosis Website). The risk of developing Multiple Sclerosisamong the general population is approximately 1 in 1000 (source: The Ares-Serono Group). MultipleSclerosis sufferers have virtually a normal life expectancy (source: MS One to One Website).
There is considerable evidence of the benefits of cannabis for Multiple Sclerosis patients, not least theexperience of those in GW's clinical trials. These trials are demonstrating benefit in all the principalsymptoms of Multiple Sclerosis – urinary bladder control, pain, spasm, spasticity and quality of sleep. Inaddition, GW has received communications from over 1000 Multiple Sclerosis sufferers alone, many ofwhom describe the benefits they receive from using cannabis. It is estimated that as many as 3-4 per cent.
of Multiple Sclerosis patients in the UK are illegally using cannabis for medicinal purposes.
The First House of Lords Report endorsed cannabis' ability to mitigate symptoms of Multiple Sclerosis. Inaddition to human clinical and anecdotal evidence, a recent study in an animal model of Multiple Sclerosisscientifically demonstrated for the first time the link between cannabis and the suppression of MultipleSclerosis symptoms.
There is a very clear need for new treatments for Multiple Sclerosis sufferers. In giving evidence to theHouse of Lords Science and Technology Select Committee, the UK Multiple Sclerosis Societycommented as follows on the options currently available: "There are very limited treatment options which people with Multiple Sclerosis can use forsymptom management. This is especially true of pain control, where few treatments are effective. . Available treatments for spasticity are Baclofen, Dantrolene, Diazapam and recently Tizanidine.
These afford partial relief and can have unpleasant side effects. Nevertheless the Multiple SclerosisSociety Symptom Survey showed that 37 per cent. of people with Multiple Sclerosis in a MultipleSclerosis Society survey were receiving Baclofen. Incontinence is one of the most commonsymptoms of Multiple Sclerosis (66 per cent. of people with Multiple Sclerosis have bladder andbowel problems) and incontinence was rated as the second most common symptom causingdistress for those living with Multiple Sclerosis. Drug treatment with Oxybutinin and Desmospressinis available, but in the Multiple Sclerosis Society Symptom Survey, only 15 per cent. had beentreated with Oxybutinin." The Multiple Sclerosis Society also reported that in relation to severe tremor, which is extremely disabling,Baclofen and Diazepam may be used with limited effectiveness.
The Directors believe that there are significant opportunities in the Multiple Sclerosis symptom-relievingmarket as there is relatively little competitive activity in this market and there are enormous current clinicalneeds. Further, the Directors believe that, should results from the Company's Phase III clinical trialssupport the efficacy achieved in its earlier trials, GW's product could take a significant share of this market.
There are approximately 26 million people throughout the world suffering from Cancer at any one time. Ithas been reported that approximately 40 per cent. of cancer sufferers have unmet Cancer Pain needswhilst approximately 55 per cent. of cancer patients with unmet pain needs are suffering from neurogenicpain.
Nerve damage pain in cancer patients is caused by injury to the nervous system sometimes as a result of atumour compressing either nerves or the spinal cord, or cancer actually infiltrating into the nerves or spinalcord. It may also result from damage to the nervous system caused by cancer treatment (chemotherapy,radiation or surgery). Tumours that lie close to neural structures are believed to cause the most severe painexperienced by cancer patients.
The US National Academy of Sciences, Institute of Medicine reported that some of the most encouragingclinical data on the effects of cannabis and cannabinoids on chronic pain are from studies of cancer pain. Ofadditional interest to the cancer market is the fact that cannabis has also been shown to provide benefit tocancer patients suffering nausea and vomiting from chemotherapy as well as stimulating appetite. Hence,the Directors believe that cannabis has the potential to provide considerable advantages over currentmedications to cancer patients.
Although opioid treatment, notably morphine, may be considered the strongest pharmacological methodfor controlling cancer pain, opioids are often ineffective in treating nerve damage cancer pain. In addition,orally delivered high-dose opioids, such as those used by cancer patients, can cause undesirable sideeffects and are unsuitable for patients suffering from nausea and vomiting as well as those withswallowing difficulties. The opiate-sparing effects of cannabis have been widely reported and it isestimated that cannabis can significantly reduce opiate requirements.
Alternatives to oral morphine are constantly being developed to provide improved treatment and havesignificant market potential. For example, a fentanyl transdermal patch is forecast to have annual sales of$800 million in 2002 (source: 2000 SCRIP Report).
The Directors believe that a cannabis-based medicine would be superior to oral morphine as well as neweropioid alternatives used to treat cancer pain of nerve damage origin.
It is estimated that there are 16.5 million Rheumatoid Arthritis patients worldwide (source: 2000 SCRIPReport) of which approximately 2.5 million are in Europe (source: SCRIP Yearbook 2001). The worldwidemarket for pain treatments for rheumatoid arthritis and osteoarthritis was estimated to be worthapproximately $4 billion in 1999 and is expected to be worth $13 billion in 2005 (source: 2000 SCRIPReport).
The Directors believe that there is significant unmet need for this condition. Physicians have commonlyprescribed analgesics and nonsteroidal anti-inflammatory drugs (NSAIDs) to relieve the symptoms of painand inflammation associated with arthritis. However, NSAIDs cause serious gastro-intestinal toxicity andthe dramatic growth in the market reflects the impact of the recent introduction of Cox-2 inhibitors,Celebrex and Vioxx, and follow-up compounds. Total combined peak sales of these two products isestimated to reach $6.25 billion (source: 1999 SCRIP Report). Although the interpretation of trial resultshas been varied to some extent, it has emerged that Cox-2 inhibitors do not prevent gastro-intestinaladverse effects, but reduce the risk to a modest extent.
In addition to the market for symptom relievers referred to above, new disease-modifying antirheumaticdrugs ("DMARDs") are also being introduced. These include two "anti-TNF" drugs, Enbrel and Remicade,which have been launched on the market and which reduce inflammatory activity. In general, medicalevidence suggests that both symptom relievers and DMARDs can produce serious adverse effects.
There is considerable anecdotal evidence from arthritis patients, including those on GW's patientdatabase, that cannabis provides effective relief of symptoms of both osteoarthritis and rheumatoidarthritis. In addition to cannabis' well documented pain-reducing properties, animal and laboratory studiesindicate that it holds anti-inflammatory qualities. For example, a 1988 study by an English research teamfound the cannabinoid CBD (cannabidiol) ameliorated inflammation in mice. They concluded that "Ourresults would suggest that cultivation of cannabis plants rich in CBD and other phenolic substances wouldbe useful − for medicinal purposes in the treatment of certain inflammatory disorders," (source:Formukong).
Recent evidence has also shown that the cannabinoid CBD has significant DMARD activity. Researchersat the Kennedy Institute of Rheumatology in London have shown that CBD has disease-modifying activityand can block progression of arthritis in a mouse model. Histological examination of joints showed thatCBD protected them against severe disruption.
There are clear needs for safe, well tolerated drugs which act rapidly to stop disease progression and fordrugs which stop joint pain and tenderness and increase mobility. The Directors believe thatcannabis-based medicines have the potential to satisfy these needs. In the first instance, GW is targetingsymptom relief in this market. Longer term, it will be examining the effectiveness of its medicines inhalting disease progression.
Further potential markets for the Group's products include Stroke/Head Injury, Migraine, InflammatoryBowel Disease (IBD), Schizophrenia, Epilepsy, Movement Disorders (Parkinson's disease, Huntington'sdisease, Dystonia). All of these markets have been selected on the basis of evidence supporting thepotential effectiveness of cannabis-based medicines.
With GW's European research and development programme already well advanced, its North Americanactivities are now starting to increase. Importantly for GW, the FDA has released specific draft guidelinesfor the development of botanical drugs which are proving to be of significant value in determining theGroup's regulatory strategy in the US.
The US is the world's largest pharmaceutical market (source: USADATA). However, development ofproducts in the US is subject to significant additional financial and scientific challenges.
The Directors believe that, the only clinical studies that have to date been conducted in the US aresmall-scale smoking and oral studies using research grade cannabis supplied by the National Institute ofDrug Abuse (NIDA), a US Government agency. The Directors consequently believe that GW is in a strongposition to establish a US research programme similar to that now being conducted in the UK.
US federal government agencies
Following introductions from the Home Office on behalf of GW, GW has held meetings with the Food andDrug Administration (FDA), the Drug Enforcement Agency (DEA) and the Office for National Drug ControlPolicy (ONDCP). In addition, GW has met with NIDA and senior State officials in California and Maine.
Although the licensing process in the US is often protracted, GW has recently received its first US importlicence from the DEA. In August 2000, ONDCP commented publicly on medicinal cannabis as follows: "Tohave medicine determined by science and not by popular will is exactly what we support.'' GW has entered into a development collaboration with a US company with considerable expertise in thedevelopment of plant-based medicines. This company has itself already obtained Investigational NewDrug (IND) authorisation (permission to proceed into Phase II clinical trials) for three botanical products.
This partnership is providing GW with important input into the specific requirements associated withGW's US development programme.
Clinical trials in Canada
GW has received permission from Health Canada, the Canadian regulatory authority, to commence its firstPhase II clinical trial in Canada. Health Canada is the first overseas regulatory authority to evaluate GW'sdata and grant such permission. This represents an important development in terms of the internationalroll-out of GW's product portfolio.
The permission received from Health Canada relates to a specific clinical trial which will study the effectsof cannabis-based medicines on Chronic Refractory Spasticity and Neurogenic Pain in patients withChronic Pain, Multiple Sclerosis and Spinal Cord Injury.
Cultivation and production
The key consideration when developing plant-based medicines is control of starting materials so as tomeet the standards of quality required by the regulatory authorities. All of the cannabis plant materialsused by GW in its pharmaceutical development process are cloned plants grown undercomputer-controlled conditions in the UK. This affords the Group complete control over the breeding,cultivation, harvesting and processing of plant material to ensure the product meets regulatoryspecifications.
The Group is preparing to establish in-house production capability in order to be able to manufacture itsfirst marketed products. Its strategy is to develop and refine production methods in-house so as to caterfor the final stages of product development and sales in its initial target markets. Longer term, GW expectsto contract-out large scale production.
Hortapharm BV licence
GW has entered into an exclusive worldwide collaboration with the Dutch medicinal cannabis breedingspecialists Hortapharm BV. Further details of the agreement with Hortapharm are set out in paragraph 11of Part VIII. Hortapharm has been researching the cannabis plant for a decade. Its staff include individualswho have published several works on cannabis botany. Hortapharm has also developed techniques forbreeding varieties of cannabis of a pre-determined cannabinoid composition. By obtaining access to all ofHortapharm's relevant know-how and relevant plant varieties (present and future), the Directors believethat GW's cultivation programme has been accelerated by several years.
GW has set up a high security cannabis cultivation facility at a secret location in the UK under strict UKHome Office supervision. This approximately 30,000 square foot facility caters for all projected cannabisrequirements for research purposes and produces approximately 40,000 cannabis plants a year. Basedupon evidence from GW's clinical trials, the Directors estimate that this facility produces sufficient rawmaterial to fulfil the annual requirements of approximately 3,000 patients. Plans are now being drawn up tosignificantly expand the cultivation programme to cater for the much greater quantities expected to berequired when products reach the market.
The existing facility is guarded by electric fences, 24 hour security guards, security cameras andsophisticated alarms. All aspects of the growing climate within the facility – photoperiod, temperature,humidity and air changes – are controlled by computer. The measures taken to control the growingenvironment have the following consequences in respect of the quality of the plants: there is no contamination from birds and vermin; bioburden is therefore low; the compost in which the plants are grown is rigorously defined and tested; adventitious plant diseases and insect pests are detected early and are eradicated by organic orbiological procedures. No pesticides are used; removal of male flowers ensures that resin production from female flowers is maximised; and it is possible to grow plants throughout the year and to induce flowering and resin production bymanipulation of the photoperiod.
Cultivation of GW's special chemovars of cannabis began in August 1998. Following the initial crop grownfrom seed, chemovars have been selected and all subsequent growing has been from cloned plants.
Growing from cloned plants ensures that the ratio of plant constituents is fixed within narrow limits.
Laboratory analysis of selected chemovar lines demonstrates that the cannabinoid ratios are veryconsistent. The mean THC content of the principal THC chemovar (THC as a percentage of totalcannabinoids) is 94.5 per cent. with a coefficient of variation of just 1.5 per cent. The principal CBDchemovar has a mean CBD content of 90 per cent. and coefficient of variation of under 2 per cent. Suchhigh levels of consistency are unusual in plants and are likely to be a key advantage when applications aremade to the medical regulatory authorities.
GW's strategic options for the sale and marketing of its products fall into two categories – third partylicences and in-house/distributor sales.
It is standard practice for young research and development companies to enter into licensing agreementswith major pharmaceutical companies for the sale and marketing of their products. Such agreements areusually structured so as to provide the development company with a signature fee, payments on theachievement of development and regulatory milestones, a royalty on sales and margin on product supply.
Licensing agreements are typically entered into on a product-by-product and country-by-country basis. It istherefore possible to follow many different licensing strategies with respect to different countries anddifferent products. The terms of a licence agreement can differ markedly depending on the stage ofproduct development at which the product is licensed. Generally, the earlier in the process that licensingtakes place, the greater the risk for the licensee and hence the less favourable the terms for thedevelopment company.
The Directors expect that GW's products will allow it to command favourable licensing terms. Theybelieve that availability of new cannabis-based medicines will generate a great deal of publicity and therewill be significant immediate patient demand.
Although GW is not likely to develop an in-house sales force, it is possible that GW would appoint adistributor in certain markets. A significant advantage of pursuing this approach and not licensing productsduring the development phase is that GW maintains control over the whole of its product rights.
Commercialisation strategy to date
Although GW has held preliminary discussions with some major pharmaceutical companies, GW has notto date actively sought licensees for its products. By avoiding the need to enter into licensing agreementsat an early stage of product development, GW has been able to retain the full value of the Group's productrights at this time. As a result, the Directors expect that they will be able to agree favourable licensingarrangements in the future.
Intellectual property rights
An integral part of the research and development programme is to establish proprietary intellectualproperty rights to protect techniques and technologies involved in the development programme.
Examples of the areas in which the Group is and will be seeking protection in the future are as follows: plant variety rights methods of extraction patents drug delivery device patents patents on compositions of matter for the delivery of cannabis methods of use patents design copyright on devices The Group's aim is to develop a matrix of interlocking intellectual property rights which is difficult forcompetitors to penetrate. The Group has considerable know-how which is backed by a growing number ofpatent applications and it is in this intellectual property where much of the value of the Group lies. Themaintenance, strengthening and expansion of its portfolio of intellectual property is a priority for theGroup.
It is anticipated that the complex botanical nature of the Group's products will also provide an importantline of defence from competitors. The Directors believe that a third party will have difficulty in showing"essential similarity" of its products to GW's plant derived medicines and, therefore, that GW's productsmay be less likely to face generic competition. As well as being difficult to genericise, the Directorsanticipate that the majority of the patent term will be available to protect the final products when theycome to the market.
A summary of the proprietary intellectual property rights which GW has acquired/applied for to date is setout in paragraph 17 of Part VIII.
GW's programme has received support from the UK Government and governments in North America andEurope. The UK Government has stated repeatedly that it will permit prescription of cannabis-basedmedicines, subject to regulatory approval from the MCA.
Within the past three years, there have been two major official investigations into the science surroundingthe medical benefits of cannabis – by the House of Lords Science & Technology Select Committee in theUnited Kingdom and the National Academy of Sciences, Institute of Medicine in the United States. Both ofthese investigations concluded that there is strong evidence that cannabis has significant medical valueand recommended that clinical trials on appropriate formulations derived from cannabis be performed assoon as possible.
The Home Office has worked closely with both the Company and the MCA on establishing controlprocedures so as to facilitate the progress of GW's research programme. GW also works with the HomeOffice and the police to ensure the strictest security surrounds any work involving the Company'scannabis material.
The prescribing of GW's medicines will require an amendment to the Misuse of Drugs Regulations.
In written evidence to the House of Lords Science & Technology Select Committee, the Home Officeoutlined the process as follows: "Following the issuing of a marketing authorisation (product licence) by the MCA the Governmentwould set in hand the necessary changes to the misuse of drugs legislation. The Advisory Council onthe Misuse of Drugs would have to be consulted before any changes could be made, in accordancewith sections 7 and 31 of the 1971 Act. The changes could be made swiftly, by way of secondarylegislation subject to negative resolution and would not be constrained by our obligations under theUN Convention." Commenting in his oral evidence to the House of Lords Science & Technology Select Committee, CharlesClarke MP, Minister of State at the Home Office, described the process of consulting the Advisory Councilon the Misuse of Drugs as follows: "I think that would be relatively rapid and the actual legislative changeis a straightforward and, I think, quick process." In outlining the process once approval is obtained from the MCA, Mr Clarke affirmed that the Home Office"will act very expeditiously to ensure that any approved treatment can be brought into generalcirculation".
The changes referred to above relate to two statutory instruments: the removal of cannabis from Part 1 of the Schedule to the Misuse of Drugs (Designation) Order1986 (which specifies the controlled drugs which are designated as drugs to which Section 7(4) ofthe Misuse of Drugs Act applies); and the transfer of cannabis from Schedule 1 to Schedule 2 (or 3) of the Misuse of Drugs Regulations1985.
It is important to stress that these changes would not relax the existing controls on illicit use of herbalcannabis material, rather they would permit only the prescription of specific cannabis-based medicinesapproved by the regulatory authorities.
Cannabis-based medicines separate from "legalisation debate"
GW is focused solely on developing medicines to the satisfaction of the medical regulatory authorities.
GW is not involved in the debate to legalise the use of smoked herbal cannabis for medical or recreationaluse.
Home Office licences
GW operates under licences granted under Section 7 of the Misuse of Drugs Act 1971. These licencesallow the Company to cultivate, possess and supply cannabis for the purpose of medical research.
Licences under the Misuse of Drugs Act are issued on an annual basis. The Home Office has renewedGW's licences each year and has stated to the Company that they expect future renewals to be processedin the same way.
Directors, senior management and employees
Dr Geoffrey Guy (aged 46) – Executive Chairman Dr Guy has over nineteen years experience in pharmaceutical development covering new chemicalentities, biotechnology products, plant-based medicines, controlled drugs and drug delivery systems. DrGuy has been the physician in charge of over 200 clinical studies including first dose in man,pharmacokinetics, pharmacodynamics, dose-ranging, controlled clinical trials and large scalemulti-centred studies and clinical surveys.
Dr Guy founded Ethical Holdings plc, in 1985 and led that company as Chairman and Chief Executive to itsNasdaq flotation in 1993 before leaving in 1997. He received 3i's "Venturer of the Year" award in thescience and technology category. In 1990, Dr Guy co-founded the plant-medicines company that becamePhytopharm plc, of which he was Chairman until 1997. Dr Guy served as Director of Clinical Developmentat Napp Laboratories from 1983 to 1985 and as International Clinical Research Co-ordinator at LaboratoriesPierre Fabre from 1981 to 1983.
Dr Guy gained a BSc in pharmacology from the University of London in 1976, an MB BS atSt Bartholomew's Hospital in 1979, an MRCS Eng. and LRCP London in 1979, an LMSSA Society ofApothecaries in 1979 and a Diploma of Pharmaceutical Medicine from the Royal Colleges of Physicians in1984. Dr Guy is a member of the editorial board of the Journal of Cannabis Therapeutics.
Justin Gover (aged 30) – Managing Director Mr Gover has been Managing Director of GW since January 1999. In this time, he has successfully guidedthe Group through this period of rapid growth and managed the Group's equity financing activities. He waspreviously Head of Corporate Affairs at Ethical Holdings plc, the Nasdaq-quoted drug delivery company. Inthis role, he was responsible for the company's strategic corporate activities, including mergers andacquisitions, strategic investments, equity financing and investor relations. Transactions includedacquisitions and disposals in North and South America, public listings of group companies in London andthe US, and strategic investment in Asia. He previously worked as a consultant with BDO ManagementConsultants in Hong Kong and also in China establishing a pharmaceutical joint venture. Mr Gover holds anMBA from INSEAD in Fontainebleau, France. He received a BSc (Hons) from Bristol University in 1992.
Dr Brian Whittle (aged 68) – Scientific Director Dr Whittle has over forty years experience in the pharmaceutical industry and is a specialist in thedevelopment of plant-based medicines. He was co-founder and Chief Executive of a company which laterbecame Phytopharm plc from 1990 to 1994 and Chief Scientific Officer from 1994 to 1998. He waspreviously Managing Director of Research Consultants (International) Limited, a subsidiary of EthicalHoldings plc. From 1981 to 1989, he founded and managed Brian Whittle Associates Limited, apharmaceutical development consultancy. From 1979 to 1981 Dr Whittle was Director of Regulatory Affairs and Health Registration for Wyeth Europa Limited and from 1969 to 1979 was Head ofPharmacology at Reckitt and Colman plc. From 1960 to 1969 he was Head of the Central Nervous SystemsUnit at ICI Pharmaceuticals Limited. Prior to that Dr Whittle was a lecturer in Pharmacology at SunderlandUniversity and a pharmacist at the Royal Marsden Hospital, London.
Dr Whittle is a Fellow of the Royal Pharmaceutical Society, The Linnean Society and of the British Instituteof Regulatory Affairs. He was awarded a B Pharm degree from the University of Nottingham in 1954, aPhC Diploma by the Pharmaceutical Society in 1954, an MSc by the University of London in 1957 and aPhD also by the University of London in 1964.
Jonathan Laughton (aged 29) – Finance Director Mr Laughton has been Finance Director of GW since May 1999 and was appointed Company Secretary inJuly 1999. He joined the Company from KPMG in Guernsey where he audited the Guernsey-basedsubsidiaries of clients including NM Rothschild and Sons, ING Barings, the Woolwich and Rabobank. Priorto this, Mr Laughton worked in the Owner Managed Business Unit of KPMG in Birmingham, auditing abroad range of companies. Mr Laughton qualified as a member of the Institute of Chartered Accountantsin England and Wales in 1998 and is also a member of the Institute's Faculty of Information Technology.
Mr Laughton holds an MA in Human Sciences from St. John's College, Oxford University.
David Mace (aged 46) – Non-Executive Director Mr Mace has a track record of growing and developing successful businesses internationally over the last22 years. In December 1987, Mr Mace led a Management buy-out of Sea Life Centre (Holdings) Limited,from Norsk Hydro, through to subsequent merger and flotation in 1992 as Vardon plc, the leisure group.
From 1992 to 1996, Mr Mace was a main board director of Vardon plc and was Chief Executive andsubsequently Executive Chairman of Vardon Attractions Limited. Mr Mace has served as a non-executivedirector of private and venture capital backed companies in France and the UK and has also acted asmanagement consultant to businesses in Europe, the Far East and New Zealand.
Peter Mountford (aged 43) – Non-Executive Director Mr Mountford is a director of a number of private and public companies, including a non-executive directorof Comprehensive Business Services plc, Honeycombe Leisure plc and Internet Direct PLC. He is theco-founder of Bradmount Investments Limited which was formed in 1995 as a private investmentcompany, and through which he has completed many successful investments and acquisitions since thatdate. He qualified as a Chartered Accountant in 1982, and in 1986 was one of the founding directors ofArthur Andersen Corporate Finance. Between 1989 and 1991 he was seconded to the Takeover Panelwhere he advised on many high profile takeovers and public company transactions. Through BradmountInvestments Limited he has developed a substantial portfolio of investments in a variety of companies,ranging from aggregates businesses to pub companies. He is also a member of the Securities Institute.
Dr Philip Robson (aged 54) – Medical Director Prior to joining the Group, Dr Robson was for the previous ten years, a Consultant Psychiatrist in Oxfordand Senior Clinical Lecturer in the Oxford University Department of Psychiatry. In addition to his duties asMedical Director of the Company, Dr Robson retains the position of Senior Research Fellow in the OxfordUniversity Department of Psychiatry. Dr Robson is an expert in the therapeutic potential of cannabis andcannabinoids. In 1996 he was commissioned by the Department of Health to carry out a critical review ofthe relevant scientific literature and in 1998 was called on to submit both written and verbal evidence tothe House of Lords Science & Technology Committee investigation into cannabis. Prior to taking up hispsychiatry posts at Oxford, Dr Robson worked for eight years within the pharmaceutical industry, initiallyas a clinical pharmacologist and then as Director of Clinical Research at Wyeth Laboratories. Dr Peter Gibson (aged 48) – Technical Director Dr Gibson has 18 years experience in pharmaceutical development, working with new chemical entitiesand generic products, in both contract research and established pharmaceutical companies. Prior to joining GW, Dr Gibson was Director of Scientific Services for Elan Transdermal Technologies (UK) Limited(previously Ethical Pharmaceuticals Ltd) and was responsible for a wide range of technical and scientificactivities for the company, including formulation development, analytical services, bioanalysis andinformation technology services. Dr Gibson was co-founder of Bioanalytical Research Ltd in 1985, acontract research company specialising in bioanalysis for the pharmaceutical industry, which was sold in1990 to Ethical Pharmaceuticals Ltd.
Stefan Antosik (aged 54) – Production Director Mr Antosik has 28 years management experience in the pharmaceutical industry. Previous positionsinclude Deputy Managing Director of Syntex Ireland and Managing Director of Angus Fine Chemicals. Inthese roles, he was responsible for all site functions including manufacturing, engineering, quality andproject management. Prior to joining GW, Mr Antosik was Production Director with ScotiaPharmaceuticals Limited and was responsible for the successful regulatory manufacturing submission inboth the USA and Europe for Scotia's most important oncology drug. Also at Scotia, he managed the drugsubstance technology transfer, plant build, commissioning and process scale-up. The plant passed apre-approval inspection by the FDA last year.
Colin Stott (aged 35) – Director of Research & Development Operations Mr Stott has fourteen years experience in the pharmaceutical industry covering a wide range of newchemical entities, biotechnology products, and plant-based medicines, with 11 years experience of clinicaldevelopment and project management. Prior to joining GW, Mr Stott was Clinical Programme Manager &International Project Leader at Napp Pharmaceuticals Limited, leading an international joint developmentprogramme of a plant-based medicine. Prior to this, he was Clinical Projects Manager at the plantmedicines company Phytopharm plc between 1996 and 1999, managing clinical and pre-clinicaldevelopment programmes. Mr Stott also has experience gained at Astra Zeneca, Schering-PloughLimited, Genzyme (UK) Limited and Alpha Therapeutics Limited (now Grupo Grifols).
David Potter (aged 47) – Director of Botanical Research and Cultivation Mr Potter has twenty-three years research and development experience as a horticulturalist andagronomist. After brief contracts with the Ministry of Agriculture, he joined a multinational petrochemicalscompany in 1976 testing novel pesticides and plant growth regulants in glasshouse and field grown crops.
Mr Potter was a Senior Assistant Scientist before becoming Head of Security and Estate Services in 1993.
Prior to joining GW in 1998 as its first employee, Mr Potter worked as an independent consultant in theregistration of novel pesticides. Mr Potter is a Member of the Institute of Occupational Safety and Healthand also a Justice of the Peace.
Alice Mead (aged 51) – Special Counsel, Medical Affairs (North America) Ms Mead is an attorney specialising in health care law. For eleven years prior to joining GW, she served asLegal Counsel to the California Medical Association, the largest state medical association in the UnitedStates. During that time, she developed special expertise in the legal and regulatory issues surroundingmedicinal cannabis. Most recently, on behalf of the California Attorney General's Task Force on MedicalMarijuana, Ms Mead drafted extensive legislation that has gained the support of a broad range of bothgovernmental and private interest groups across California. She has also prepared detailed guidelines onthe subject for the medical profession, which have been widely adopted throughout that State and the USgenerally. Prior to joining the California Medical Association, Ms Mead served as a litigator for Morrison &Foerster and was previously a law professor at Arizona State University College of Law. Scientific advisers to the Group include: James Callaway, PhD Senior Researcher, Department of Pharmaceutical Chemistry at the University of Kuopio, Finland. Directorof Finola Inc., a hemp seed, food and consulting company, and co-originator of "Finola", theearly-blooming dwarf variety of hemp which is licensed internationally for the production of food oil andprotein.
An expert in the botany of the cannabis plant and author of three books on this subject, "MarijuanaBotany", "Hashish!" and "Hemp Diseases and Pests: Management and Biological Control".
Mira V. Doig, PhD, BSc, F Chrom Soc Technical Director of ABS Laboratories Limited, a company which provides bioanalytical and analyticalservices to GW. Former Principal Scientist/Deputy Head of Department at Drug Metabolism Departmentof GlaxoWellcome.
Ian Flockhart, PhD, BSc, Cchem, FRSC Director of Applied Analysis Limited, a company which provides analytical and formulation services to GW.
Former Manager of Drug Metabolism at Reckitt & Colman which included bioanalysis andpharmacokinetic services.
Former health policy adviser to the New Zealand Ministry of Health and the British Columbia Ministry ofHealth. Former adviser to the California Attorney General's Task Force on Medical Marijuana.
John McPartland, DO, MSc, ABFP Head of Graduate Programme, Faculty of Health & Environmental Science, UNITEC, New Zealand. ClinicalAssistant Professor of Family Medicine, University of Vermont. Adjunct Assistant Professor ofBiomechanics, Michigan State University. Author or co-author of over 20 articles concerning cannabis andcannabinoids.
Neil Montgomery, MSc, FRSA, FRAI Doctoral researcher at Edinburgh University's Department of Social Anthropology. An expert inbehavioural and cultural aspects of cannabis use.
Richard Musty, PhD Professor of Psychology at the University of Vermont. Founder member, Treasurer and ExecutiveCommittee Member of the International Cannabinoid Research Society. Author of over 30 articles oncannabis and cannabinoids.
William Notcutt, MB, ChB, FRCA Consultant in Anaesthesia and Pain Management, James Paget Hospital, Great Yarmouth. HonorarySenior Lecturer, School of Health Policy and Practice, University of East Anglia.
Clinical Assistant Professor in the Department of Internal Medicine at the University of Washington, andAdjunct Associate Professor in the Department of Pharmaceutical Sciences of the University of Montana.
Editor of the Journal of Cannabis Therapeutics.
The average number of employees of the Group, analysed by activity, during the two years and ninemonths ended 31 March 2001 was as follows: Research and development Management, administration and finance The Directors believe that GW's ability to attract, motivate and retain highly qualified employees will beenhanced following the flotation.
The Group currently has offices in Wiltshire and Cambridgeshire as well as dedicated hospital units inOxford and Guernsey. The location of the Group's botanical research and cultivation operations and alsothe Group's analytical and formulation laboratories cannot be disclosed for security reasons.
The operating structure below illustrates how the various key activities of the Group are divided into fourcore operating divisions, each with a defined management structure. Each of these core operatingdivisions focuses on a key component of GW's overall product development programme, namelybotanical research and cultivation, extraction and production, pharmaceutical drug development and drugdelivery technologies.
Botanical Research The pharmaceutical industry is highly competitive with significant developments expected to continue at arapid pace. However, the Directors believe that GW has a strong competitive position worldwide inrelation to cannabis-based medicines and that there are considerable barriers to entry to deter potentialcompetitors.
GW's competition can be characterised as coming from three main sources: Marketed products and also products in development which do not derive from cannabis but whichare aimed at the medical conditions being targeted by GW.
Marketed synthetic cannabinoid medicines and other synthetic cannabinoid and single cannabinoidmedicines under development. So far as the Directors are aware, there are currently two marketedsynthetic drugs related to one cannabinoid, THC, namely Marinol쏐 and Cesamet쏐 and a smallnumber of other synthetic and single cannabinoid products in development.
Future competitive programmes to develop plant derived prescription cannabis-based medicines.
The Directors are not aware of the existence of any such programmes at the present time.
An important feature of GW's programme is to avoid the problems associated with synthetic cannabinoidproducts. The beneficial therapeutic effects reported by patients who use cannabis appear to result frominteraction of the different cannabinoids in cannabis and not simply from one specific cannabinoid. HenceGW is developing drugs derived from cannabis rather than a single cannabinoid.
The Directors have confidence that GW will be very well placed to compete for a number of reasons: GW has now entered Phase III clinical trials and has thus established a significant lead time overpotential competition.
There continue to be significant legal constraints on a programme involving cannabis, in particularthe need for government licences governing all aspects of research.
GW has exclusive worldwide access to the medicinal cannabis plant varieties bred by HortapharmBV. The Director's believe a new entrant in the field would be required to conduct many years ofplant breeding research to establish a cultivation programme similar to GW.
GW is establishing intellectual proprietary rights to protect a number of different aspects of itsdevelopment programme.
GW's management team comprises individuals with a rare combination of experience essential fordeveloping cannabis-based medicines. These individuals are specialists in developing plant-basedmedicines, drug delivery technologies and controlled drugs.
The Placing and Admission and related matters
The Placing
The Company is issuing 13,736,264 new Ordinary Shares pursuant to the Placing at the Placing Price,which will raise approximately £23.5 million (net of expenses) and will represent approximately 14.3 percent. of the enlarged issued share capital following the Placing. The new Ordinary Shares have beenplaced by Collins Stewart with institutional and other investors.
The Placing is conditional upon Admission becoming effective and the Placing Agreement becomingunconditional in all respects. Details of the Placing Agreement are contained in paragraph 8 of Part VIII ofthis document.
There are no existing shareholders who are selling shares pursuant to the Placing. Following the Placing, itis expected that the interests of the Directors will, in aggregate, amount to 45.8 per cent. of the enlargedissued share capital.
The Directors have undertaken not to dispose of any of their Ordinary Shares (or any interest therein) for aperiod of one year from the date of Admission. They have further undertaken, that for a further six monthsfrom the date falling one year from the date of Admission, not to dispose of more than 50 per cent. of theirOrdinary Shares.
In addition, shareholders who will hold in aggregate 10.9 per cent. or the issued share capital of theCompany immediately following the Placing have entered into lock-in agreements.
Further details of the lock-in arrangements are set out in paragraphs 8 and 9 of Part VIII of this document.
The Company intends to comply, as soon as practicable and so far as possible given the Group's size andthe constitution of the Board, with the Combined Code.
The audit committee has been appointed and consists of Peter Mountford and David Mace although theFinance Director will normally attend as an invitee. It will meet twice a year and be responsible for ensuringthat the financial performance of the Group is properly reported on and monitored. It will also meet theauditors and review their reports relating to accounts and internal control systems.
Similarly, the Remuneration Committee has been appointed and consists of Peter Mountford and DavidMace although the Chairman and/or the Managing Director will normally attend as an invitee. It will makerecommendations to the Directors of the Company on matters relating to the remuneration and terms ofemployment of the existing and proposed Executive Directors of the Company and on proposals for thegranting of share options pursuant to any share option scheme in operation from time to time.
CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by acertificate and transferred otherwise than by a written instrument. The Articles of Association of theCompany permit the holding of Ordinary Shares under the CREST system. All the Ordinary Shares will bein registered form and no temporary documents of title will be issued. The Company has applied for theOrdinary Shares to be admitted to CREST and it is expected that the Ordinary Shares will be so admittedand accordingly enabled for settlement in CREST on the date of Admission. It is expected that Admissionwill become effective and dealings in Ordinary Shares will commence on 28 June 2001. Accordingly,settlement of transactions in the Ordinary Shares following Admission may take place within the CRESTsystem if any shareholder so wishes.
US Securities legislation
The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, asamended and, subject to certain exceptions, may not be offered or sold within the United States.
Employee Share Schemes
The Company has adopted two employee share option schemes, the Approved Scheme and theExecutive Scheme, for the grant of options over Ordinary Shares.
GW Pharma adopted similar schemes (the GW Pharma Approved Scheme and the GW Pharma ExecutiveScheme) for the grant of options over its shares prior to its acquisition by the Company. Options over GWPharma shares have now been replaced with equivalent rights over Ordinary Shares, and GW Pharma willnot grant any further options under those schemes.
GW Pharma also adopted the All Employee Scheme, which is an all-employee share ownership planapproved under schedule 8 to the Finance Act 2000, for the grant of rights over its shares. Shares awardedto participants under this scheme were replaced by Ordinary Shares as a result of the acquisition of GWPharma by the Company. It is intended that the scheme be amended so that future awards can be madeover Ordinary Shares.
Additionally, certain options have been granted to consultants of the Group and to the Non-ExecutiveDirectors under arrangements outside these schemes.
The total number of Ordinary Shares under option under all of these schemes, and the arrangements forconsultants and Non-Executive Directors referred to above, is 7,550,150, which represents approximately9.2 per cent. of the current issued ordinary share capital and approximately 7.9 per cent. of the issuedordinary share capital immediately following the Placing.
Details of these schemes and arrangements, together with summaries of awards made under all theschemes are contained in paragraph 7 of Part VIII.
Your attention is drawn to the additional information set out in Parts III to VIII of this document.
Financial information, Current Trading and Prospects,
Reasons for the Placing and use of proceeds
Trading Record
The trading record of the GW Pharma Group (as defined on page 64 of this document) for the period ended30 September 1999, and year ended 30 September 2000 and the six months ended 31 March 2001, whichhas been extracted without adjustment from the Accountants' Report set out in Part VII of this documentand which should be read in conjunction with the full text of this document, is summarised as follows: 30 September 30 September Loss before taxation Retained loss for the period The Company has not paid dividends in the past and anticipates that, following the completion of thePlacing, earnings, if any, will not be distributed for the foreseeable future to shareholders as dividends butwill be retained for the development of its business. The declaration and payment by the Company of anyfuture dividends, and the amount thereof, will depend upon the success of the Company's operations,financial condition, cash requirements, future prospects, profits available for distribution and other factorsdeemed by the Directors to be relevant at the time.
Current Trading and Prospects
The Group has started its Phase III trials programme relating to Multiple Sclerosis, and the Directorsbelieve that the prospects for revenue generation in this market are good. There are approximately 2.5million people worldwide suffering from Multiple Sclerosis. The Directors believe that GW's product couldtake a significant share of this market.
In addition, the Directors expect to commence Phase III trials in Cancer Pain during the second half of 2001and to expand Phase II trials for other target markets. The Directors believe the size of Cancer Pain andother target markets to be substantial and to offer significant opportunities for the Group.
The Directors expect that products for Multiple Sclerosis and Cancer Pain will be submitted for regulatoryapproval to the MCA in 2003 and, subject to such regulatory approval being granted, being made availablefor sale in early 2004.
Reasons for the Placing and use of proceeds
The Placing will raise approximately £23.5 million, net of expenses, for the Company. These proceeds willbe used to: fund the expansion of its late stage clinical trials; expand the cultivation and production facilities in anticipation of the initial commercial launch of itsproducts; and accelerate the Group's research activities in Europe and North America.
The Directors believe that the increased financial resources and enhanced profile of the Company withinthe market place will greatly assist GW in its product commercialisation strategy.
Admission to AIM will also provide opportunities for the Company's employees to participate in the futuresuccess of the Company and should help attract and retain high calibre staff.
Information regarding United Kingdom taxation with regard to the Placing is set out in paragraph 16 of PartVIII of this document. If you are in any doubt as to your tax position, you should contact your professionaladviser immediately.
Risk factors
Investors should consider carefully whether investment in the Ordinary Shares is suitable for them in thelight of the information in this document and their personal circumstances. Before making any finaldecision, prospective investors in any doubt should consult with an investment adviser authorised underthe Financial Services Act 1986. If any of the following risks were to materialise, the Group's business,financial condition, results or future operations could be materially adversely effected. In such case, themarket price of the Ordinary Shares could decline and an investor may lose all or part of his investment.
Additional risks and uncertainties not presently known to the Directors, or which the Directors currentlydeem immaterial, may also have an adverse effect upon the Company.
Stage of Development of the Group's Product Portfolio
The Group has not yet marketed any of its potential products, and there can be no assurance that any of theGroup's product candidates will be successfully marketed. There can be no assurance that any of theGroup's products will successfully complete clinical trials or that they will meet the regulatory andproduction requirements necessary for commercial distribution. Adverse or inconclusive results fromtesting or trials of these candidates may substantially delay, or halt entirely, any further development of theproducts. There can be no assurance that the planned regulatory submission and launch dates for all orsome of the Group's products will be met.
In all countries, the Group will be required to obtain and maintain regulatory approval ("marketingauthorisation") for its products from the relevant regulator to enable such products to be marketed in thatcountry. The time taken to obtain regulatory approval varies between countries. The grant of a marketingauthorisation for a medicinal product requires the evaluation of data relating to quality, safety and efficacy.
The manufacture of medicinal products is also subject to regulatory approval. There can be no assurancethat any of the Group's products will successfully obtain the necessary regulatory approvals tomanufacture and market the Group's products.
Different regulatory authorities in different countries may impose their own requirements (by, forexample, restricting the product's indicated uses) and may refuse to grant, or may require additional databefore granting an authorisation, even though the same product may have been approved by anothercountry. If an authorisation is obtained, the product and its manufacture are subject to continual reviewand there can be no assurance that such approval will not be withdrawn or restricted. Changes inapplicable legislation or regulatory policies, or discovery of problems with the product, production process,site or manufacturer may result in the imposition of restrictions on the product's sale or manufacture,including withdrawal of the product from the market, or may otherwise have an adverse effect on theGroup's business.
Licences to cultivate, possess and supply cannabis for medical research are granted by the Home Officefor periods of one year only. If the Home Office did not renew a licence on expiry, the Group may not be in aposition to carry on its research and development programme in the UK. In addition, once regulatoryapproval is obtained, the Group will be required to obtain commercial licences to cultivate, produce andsupply cannabis. The Group has already received written confirmation from the Home Office of the simpleprocedures required in order to obtain such licences and has received verbal assurances that the issue ofsuch licences should be a straightforward process. However, if the Home Office were not prepared toissue such licences, the Group would be unable to distribute its products on a commercial basis in the UK.
In order to carry out research in countries other than the UK, similar licences to those outlined above will berequired to be issued by the relevant authority in each country. In addition, the Group will be required toobtain licences to export from the UK and to import into the recipient country. Although the Group expects to obtain such licences as required, this may result in delays. To date, the Group has obtained necessaryimport and export licences for transportation of cannabis material to North America and certain Europeancountries.
Government Policy and Legislative Process
The current government in the United Kingdom has stated that it will permit, subject to regulatory approvalfrom the MCA, cannabis-based medicines to be re-scheduled under the Misuse of Drugs Regulations.
There can be no guarantee that government policy may not change in the future.
The Home Office has stated that if the MCA approves a cannabis-based medicine, the Government wouldstart the process to amend the relevant legislation to allow the medicine to be prescribed. The HomeOffice has stated that the changes could be made swiftly by way of statutory instrument. While the HomeOffice has stated that the process should be swift and straightforward, there is no certainty that suchstatutory instrument will be approved without any delay or objections, if at all.
These risk factors associated with legislation to permit commercialisation of the Group's products apply toall countries in addition to the UK.
Products are available generally that could compete with the Group's products under development in thepharmaceutical market. New products launched by existing organisations or new entrants to the marketsin which the Group will operate may adversely affect the Group's business. Many of the companies thathave products which will compete with the Group's products under development are significantly largerthan the Company and have greater financial resources.
In certain circumstances drugs produced by competitors may be essentially similar to one or more of theGroup's products. Essential similarity may occur where two products have the same composition in termsof active ingredient and their pharmaceutical form is the same. There can be no assurance thatcompetitors will not be able to reproduce the Group's products to achieve essential similarity andtherefore take advantage of an accelerated approval route which could lead to the Group's products facinggeneric competition.
Cultivation and Manufacturing
The Group currently has only one cultivation facility. Loss of this facility through fire or other causes couldhave an adverse effect on the Group's product development and business.
In addition, the Group's proposed products must be manufactured in commercial quantities, incompliance with regulatory requirements and at an acceptable cost. The Group does not yet own andoperate cultivation and manufacturing facilities sufficient to make commercial quantities of its productsunder development. The Directors anticipate that additional expenditure, management resources andtime will be required to develop adequate cultivation and manufacturing capabilities. There can be noassurance that the Group will be able to develop and manage commercial cultivation and manufacturingcapabilities. There can be no assurance that the cultivation and manufacturing facilities will be approved asmeeting required standards for production of the products planned to be produced in the facility or thathaving received such approval or approvals it will maintain such approval or approvals.
Reliance on Intellectual Property Rights
Due to the nature of the Group's business in the research, development, manufacture and marketing ofcertain drugs, the Group is dependent on patents, licences and other intellectual property rights. TheGroup cannot be certain that the intellectual property to which these relate do not or will not infringe uponthird party rights which may result in the Group's inability to continue exploiting the intellectual propertypursuant to these. The Group cannot be certain that such rights, if challenged, would be found to beinvalid. The Group intends to enforce and defend its intellectual property rigorously against allunauthorised infringers of which it becomes aware. Further, the Group's ability to compete effectivelywith other companies depends, among other things, on the development of the production technologiesfor its various products. However, there can be no assurance that competitors have not developed or willnot develop substantially equivalent information or techniques. Substantial costs may be incurred if theGroup challenges the proprietary rights of others or is required to defend its right to operate, developproducts and undertake sales in territories where it believes it is free to do so and the outcome of any suchchallenge or defence would be uncertain.
Third Party Intellectual Property Rights
Due to the nature of the Group's business in the research and development of certain medicines withinthe pharmaceutical industry, the Group is active in areas in which numerous other third parties alsoparticipate. Such third party activities inevitably lead to the generation of third party intellectual propertyrights such as patents, know-how and other intellectual property. The Group can provide no guarantee thatits activities or products will not actually or allegedly infringe third party intellectual property rights and it isthe Directors' opinion that any comprehensive evaluation of such a risk is impractical. The Group may insome circumstances be able to design around, or take licenses of, third party rights. It may however needto defend itself against any alleged infringement of third party intellectual property, especially where thismay conflict directly with its own activities or where a license is not available on reasonable terms. There isno guarantee that such a defence would be successful. Additionally, such defence could involvesubstantial cost for the Group. In the event of an unsuccessful defence against third party intellectualproperty rights, the Group may be forced either to cease commercialisation or development of relevantactivities or products or alternatively seek an arrangement whereby non-infringing use of the third partyintellectual property becomes available. In either circumstance, these could have substantial costimplications for the Group and the products it is developing.
Compulsory licences are available in respect of certain intellectual property rights if certain circumstancesarise. With regard to UK plant variety rights, compulsory licences are available two years after the grant of aplant variety right if the relevant circumstances are deemed to exist. It must be shown by the applicant fora compulsory licence that the relevant plant variety is not available to the public at a reasonable price, is notwidely distributed or maintained in quality. Additionally, the applicant must be financially and otherwise in aposition to exploit the right and intend to exploit the right. Although no assurances can be given, theCompany believes that its commercial strategy is such that the circumstances required for the granting ofa compulsory licence will not arise and that if they did, the chances of an appropriate variety becomingavailable or being developed by a competitor is small given the arrangements it has with Hortapharm B.V.
Pharmaceutical Pricing Environment
The commercialisation of the Group's products depends, in part, on the extent to which reimbursementfor the costs of such products will be available from government health administration authorities, privatehealth coverage insurers and other health funding organisations. There is increasing pressure by certaingovernments to contain health care costs by limiting both coverage and level of reimbursement fortherapeutic products and by refusing, in some cases, to provide any coverage for uses of approvedproducts for disease conditions for which the relevant regulatory agency has not granted marketingapproval. There can be no certainty that adequate health administration or third party coverage will beavailable to the Group or any future partners and licensees of the Group to obtain price levels for theproducts sufficient to realise an appropriate return on investment.
Even if the Group's products are successfully developed and approved by the appropriate regulatoryagencies, they may not enjoy commercial acceptance or success, which would adversely affect theGroup's business.
If the Group decides to establish an indirect sales channel through licensees as a route to market, thesuccessful introduction and commercial acceptance of the Group's products will depend upon themanufacturing, promotional and marketing commitment of the licensees. The identification of appropriatelicensees will also have an impact on this process.
Requirements for Additional Funds
The Group's future capital requirements to complete the commercialisation of its product candidates maybe substantial, and additional funds will be required. The level and timing of expenditure will depend on anumber of factors, many of which are outside the control of the Group. If additional funds should be raisedby issuing equity securities, dilution of existing shareholdings may result. In addition, there can be noassurance that the Group will be able to raise additional funds when needed, or that such funds will beavailable on terms favourable to the Group.
Retention of Key Employees
The Group is heavily reliant upon the skills of its management and scientific team and the loss of any ofthese key members of staff could reduce the Group's ability to achieve its planned developmentobjectives. The Group has endeavoured to ensure that the principal members of its management andscientific team are incentivised, but the retention of such staff cannot be guaranteed.
Product Liability and Insurance
GW's business exposes it to potential product liability risks which are inherent in research and preclinicalstudy, clinical trials, manufacturing, marketing and the use of human therapeutic products. In addition, it isnecessary for GW to secure certain levels of insurance as a condition to the conduct of clinical trials. Therecan be no assurance that, in the event of a claim, the level of insurance carried by the Group now or in thefuture will be adequate or that a liability or other claim would not materially and adversely affect thebusiness.
History of Operating Losses and Accumulated Deficit
The Group's principal trading subsidiary, GW Pharma Limited, has experienced operating losses in eachyear since its inception and, as at 31 March 2001, had a combined accumulated deficit of approximately£5.66 million. GW Pharma expects to incur further substantial operating losses over the next few years asits research and development activities continue and increase and as it develops and increases itscultivation and manufacturing capabilities. The revenue and profit goals of the Group depend on a numberof factors outside the Group's control and there can be no assurance that the Group will ever achievesignificant revenues or profitability.
European Competition Legislation
The Directors do not believe that any of the agreements pursuant to which the Group has obtained orgranted licences of patents, patent applications, technology or know-how are restrictive of competitionunder Article 81(1) of the EC Treaty and/or the Chapter I provisions of the Competition Act 1998. Howeverthe Group will continue to monitor the position and to determine on an agreement by agreement basiswhether one or both of the aforementioned provisions become applicable to the existing agreements oragreements entered into in the future and, if Article 81(1) or the Chapter I provisions apply but there is noapplicable block exemption or statutory exclusion it will then consider whether to apply for an individualexemption. If the Group (where relevant) did not apply for, or was unsuccessful in obtaining, an exemptionwhere necessary from the European Commission and/or the Office of Fair Trading, provisions of anagreement which were restrictive of competition under Article 81(1) of the EC Treaty and/or the Chapter Iprovisions of the Competition Act 1998, in particular those relating to the exclusivity of rights granted to orby the Group, would probably be unenforceable. In addition, the Group could be fined by the EuropeanCommission or the Office of Fair Trading and a third party who suffered loss as a result of the operation ofthe agreement could sue the Group for damages.
Share Price Volatility and Liquidity
The share price of publicly traded, emerging companies can be highly volatile and illiquid. The price atwhich the Ordinary Shares are quoted and the price which investors may realise for their Ordinary Shareswill be influenced by a large number of factors, some specific to the Group and its operations and somewhich may affect the quoted pharmaceutical sector or quoted companies generally. These factors couldinclude the performance of GW's research and development programmes, large purchases or sales of theOrdinary Shares, currency fluctuations, legislative changes in the healthcare environment and generaleconomic conditions.
Prior to Admission, there has been no public market for the Ordinary Shares and there is no guarantee thatan active trading market will develop or be sustained after Admission.
Fluctuation of Operating Results
The operating results of the Group may fluctuate significantly as a result of a variety of factors, many ofwhich are outside GW's control. Period-to-period comparisons of the Group's operating results may not bemeaningful and investors should not rely on them as indications of the Group's future performance. GW'soperating results may fall below the expectations of securities analysts and investors. In that event, thetrading price of the Ordinary Shares would almost certainly fall.
The DirectorsGW Pharmaceuticals plcPorton Down Science ParkSalisburyWiltshire SP4 0JQ Pera Innovation ParkNottingham Road Collins Stewart Limited Leicestershire LE13 0PB 9th Floor88 Wood StreetLondon EC2V 7QR Bridgehead Technologies Ltd is a privately owned company established in 1995. It is a leading consultancyspecialising in the assessment of healthcare companies, projects, products and markets and assisting intheir development. Over the past 5 years Bridgehead Technologies Ltd has prepared public and privateplacing documents for development stage biotechnology, pharmaceutical and life sciences companies. Inaddition many due diligence assignments have been successfully completed on behalf of internationalinvestors.
Bridgehead Technologies Ltd employs specialists with knowledge of science, technology, productdevelopment, markets and business issues in medicine and life sciences.
Bridgehead Technologies Ltd has been instructed by GW Pharmaceuticals plc ("the Company") to assessand review certain aspects of its business namely: the merits of GW's products; GW's business plan, including the critical path and timescale to commercial exploitation and anyprojections of the market potential for the company's products by indication and geographicalarea; GW's regulatory strategy; therapies used and; the risk factors which might affect GW's business plan.
In preparing this report Bridgehead Technologies Ltd's consultants have conducted interviews with someof the key Company staff and officers; i.e. the Executive Chairman, Scientific Director, Managing Director,Director of R&D Operations, Medical Director, Finance Director, Director of Botanical Research andCultivation and Regulatory Affairs Manager; made an extensive review of the documentation provided bythe Company such as the business plan, project plans, flow charts and market projections; and assessedits activities with reference to the proprietary knowledge base possessed by Bridgehead TechnologiesLtd. In addition, the documentation supplied by the Company has been supplemented by BridgeheadTechnologies Ltd's own interviews with external independent experts.
This report has been prepared with care and due diligence, based upon information provided toBridgehead Technologies Ltd at the time of preparation. Bridgehead Technologies Ltd has no reason todoubt the veracity of such information but Bridgehead Technologies Ltd has only verified it to the extentindicated above. Changes in circumstances may render such information invalid at any point hereafter.
The scope of this report does not address the legal aspects of the Company's operations or its intellectualproperty in detail although it does cover the Company's IP strategy.
Background to the Company
GW is a pharmaceutical group ("the Group") developing a portfolio of medicines derived from cannabisplants grown under controlled conditions, to meet patients' needs in a wide variety of therapeuticindications. The Group's products are based on whole plant extracts, cannabis-based medicinal extracts(CBMEs), which contain a mixture of selected target chemicals principally cannabinoids – cyclichydrocarbons found only in cannabis. These cannabinoids can then be delivered to patients via a series ofdevices such as sprays, tablets and inhalers. Bridgehead understands that the reported beneficialtherapeutic effects of these extracts may depend on the interaction of certain cannabinoids and othercomponents of the original plant. Thus the effect of the plant extract is likely to prove more beneficial inmany target medical conditions than a single isolated cannabinoid compound extracted from the plant orproduced synthetically. Such plant extracts have the added advantage that they can call on the historicalsafety and efficacy data available for cannabis, whilst offering a safer more appropriate medicinalformulation and application method, compared with smoking cannabis. Relative to many pharmaceuticalsGW's cannabis-based medicines will benefit from short development times due to anecdotal evidence ofthe long history of safe and effective use of cannabis. This also holds out a greater potential of successthan many other biopharmaceutical or biotechnology programmes.
In Bridgehead's view GW has the capability to maintain control over all aspects of the developmentprocess from botanical research, plant cultivation, extraction, formulation into drug delivery technologies,clinical trials and regulatory affairs. This capability comes in large part from the management and team,which GW has brought together. In particular, the Group is well able, through its control of startingmaterials, to meet the standards of quality laid down by the regulatory authorities. Bridgehead understands that the Group has raised approximately £12 million from private investmentsince its inception. The Company is now looking to maintain the rapid advances in its clinical trialsprogramme by carrying out the first set of pivotal Phase III trials for its lead products in Europe and to startclinical trials in the US. GW will also continue to build its technology platform of botanical research,pharmaceutical development and drug delivery systems.
Organisation, management and key staff Bridgehead believes that GW has put together strong management and production teams. The Group'sco-founders previously set up a plant medicines company, now listed on the London Stock Exchange, andthe Company's Executive Chairman also previously founded a drug delivery company, taking thiscompany public on NASDAQ in the US.
The Group's co-founders are supported by a highly motivated and experienced management team. Inaddition, the Group has appointed a number of scientific advisors including many of the world's leadingexperts in the area of cannabinoid science. GW is also ensuring that key people in the cannabinoidresearch area are brought on board, strengthening the Group's reputation in this area. This is a relativelysmall field with a large number of the key researchers already involved with the Group or acting asadvisers.
Research, development and licensing agreements Bridgehead understands that GW has entered into a number of commercial agreements, the principalbeing an exclusive worldwide collaboration with the Dutch medicinal cannabis breeding specialistsHortapharm BV. Bridgehead understands that Hortapharm has been researching the cannabis plant for adecade, with its staff comprising individuals who have published several works on cannabis botany.
Hortapharm has also developed techniques for breeding varieties of cannabis of a pre-determinedcannabinoid composition. By obtaining access to all of Hortapharm's relevant know-how and plantvarieties (present and future), Bridgehead believes that GW's cultivation programme has beenaccelerated by several years. Bridgehead understands that under the terms of the agreement,Hortapharm retains rights to use its IP for purposes other than human and veterinary medicine ornutraceuticals, e.g. for cultivation of hemp for textile or oil purposes. GW's rights are also non-exclusive forChina (PRP), but there is provision excluding the right to export from China. GW also has an agreement with a US botanical drug development company under which this company isworking on the development of a CBME product in the US. The Group has entered into two sponsorshipagreements with the University of Oxford as well as agreements with a number of other companies withwhom it is collaborating to develop new technologies relevant to its research activities.
Clinical development strategy Anecdotal evidence suggests that medicinal cannabis may be useful in a range of medical conditions.
Initial clinical studies undertaken by GW have established the tolerability of different ratios of THC to CBD,have enabled the development of a suitable dosing regimen for patient studies and have facilitated theoptimisation of administration.
Initial patient studies, using an "N of one" design in which patients act as their own controls withevaluations on treatment compared with periods on placebo, have suggested beneficial effects of GWproducts and have further helped to refine the dosing regimen. Based upon the findings from Phase IIstudies and discussions with the UK regulatory authority, the initial indications for Phase III studies will bemultiple sclerosis and cancer pain. Subsequent indications will include neurogenic pain and neuropathyassociated with spinal injury, diabetes, phantom limb pain and other neuropathic disorders. Later,indications will be expanded to include inflammatory disorders such as rheumatoid arthritis andinflammatory bowel disease and, later in development, to include brain injury.
Two year carcinogenicity studies will be undertaken on CBD in parallel with the clinical programme.
Subject to the satisfactory outcome of the clinical programme this should permit unrestricted licences inmultiple sclerosis and cancer pain for narrow ratio THC:CBD in the second half of 2004. Marketingapproval in cancer pain and in multiple sclerosis for a high THC product will most likely be obtainableearlier. In addition, marketing approval in multiple sclerosis with a six month limit to duration of therapy fora THC:CBD product should also be obtainable earlier.
GW plans to undertake the management of the clinical studies within the UK with its own resources and isrecruiting suitable teams of clinical research scientists to undertake this work. This has the advantage ofenabling GW to keep tight control of the programme and may be cost-efficient compared with the use ofclinical research organisations. It is a substantial programme however and is likely to require additionalresources particularly for data management and analysis. Studies outside the UK will be managed throughcontract research organisations, as GW has neither the resources nor the personnel in other Europeancountries.
GW's plans also include full preclinical and clinical programmes in the US.
Manufacturing status and plans The key consideration when developing plant-based medicines is control of starting materials, to meet thestandards of quality laid down by the regulatory authorities. All the cannabis plant material used by GW inits pharmaceutical development process is in the form of cloned plants, derived from the association withHortapharm, which are grown under computer-controlled conditions in the UK. The Group therefore hascomplete control over the breeding of plants with the optimal cannabinoid content and composition;selection of cannabis clones providing a consistent composition of cannabinoids; cultivation of theseclones; harvesting of the mature plants; and processing of the resultant highly specified plant material.
This ensures that the end product meets the high specifications for a pharmaceutical product which arelaid down by the regulatory bodies. Such high levels of consistency are unusual in plants, particularlycannabis and are likely to be a key advantage when applications are made to the medical regulatoryauthorities.
Bridgehead understands that GW is preparing to establish in-house production capability in order to beable to manufacture its first marketed products. The strategy is to develop and refine production methodsin-house to cater for the final stages of product development and sales in its initial target markets. Longerterm, GW expects to contract-out large scale production.
With GW's cannabis, the variability inherent in plants grown from seed or collected from the wild isreduced by growing the plant in a controlled environment from clones of selected strains of Cannabissativa. Candidate chemovars (cannabis clones defined by their specific chemical make up) are selected onthe basis of morphological and agronomic considerations. There is some quantitative variation in yield butthe genotype, the genetic composition of the plant, is fixed. This gives a degree of control over thecomposition of the starting material, which is unusual in the regulatory assessment of botanicals as newmedicines.
Selected cannabis clones are propagated via the use of cuttings and grown at GW's specialist cultivationfacility which allows for control of the photoperiod necessary to induce flowering and optimisation of yield.
It also ensures virtual elimination of adventitious pests and results in a plant material that is of consistentlyhigh quality. The cannabis plants are harvested manually. This is a relatively non-labour-intensive processand can be achieved very rapidly. The plant material undergoes a series of processing steps and is thenextracted, using an approach that is well understood and is widely employed in the extraction of naturalproducts and components of food materials. The method is at the forefront of extraction technology and isconsidered a very mild processing technique – well suited to the retention of labile actives.
Bridgehead considers that GW is continuing to make considerable advances in extraction efficiency whichis undoubtedly the bottleneck of the process. This will have knock on effects on facility and patientrequirement projections. However, figures currently being employed for these purposes are realistic anddo not depend on any further process improvements.
Quality assurance depends on the ability to measure quantitatively the active component, and validation ofthe quantitative tests employed. GW uses validated chromatographic methods for identification and assayof the principal active components of the CBME. Using these, and other methods of instrumental analysis,it is possible to produce a specification for the extract from which the finished dosage form is made.
Compliance with Release and Check Specifications provides assurance that the drug substance and thefinished product have batch-to-batch reproducibility. It is also possible to provide evidence from stabilitytests which can be used to determine a shelf life for the product.
Bridgehead considers that projections for future crop requirements in line with market needs are sensibleand manufacturing requirements and plans are being handled appropriately.
Regulatory status and plans Within the past three years, there have been two major official investigations into the science surroundingthe medical benefits of cannabis – by the House of Lords in the United Kingdom and the National Academyof Sciences, Institute of Medicine in the United States. Both of these investigations concluded that thereis strong evidence that cannabis has significant medical value and recommended that clinical trials onappropriate formulations derived from cannabis be performed as soon as possible.
Bridgehead understands that the Home Office has worked closely with both GW and the MedicinesControl Agency (MCA), the UK's regulatory authority, on establishing necessary control procedures tofacilitate the progress of GW's research programme. GW also works with the police to ensure the strictestsecurity surrounds any work conducted involving the Group's cannabis material.
In addition, the UK Government has stated repeatedly that it will permit, subject to regulatory approvalfrom the MCA, cannabis-based medicines to be re-scheduled under the Misuse of Drugs Regulations soas to enable their general prescription. In February 2001, Charles Clarke MP, Minister of State at the HomeOffice submitted oral and written evidence on UK Government policy to the House of Lords Science &Technology Select Committee. He stated the Government's policy to be as follows: "If the clinical trials into cannabis are successful and they do lead to a medical preparation which isapproved by the Medicines Control Agency, the Government is absolutely clear that we are willing toamend the Misuse of Drugs Regulations to allow the prescribing of such medicine." Bridgehead understands that such amendments could be made swiftly, by way of secondary legislationsubject to negative resolution. Importantly, these changes would not relax the existing controls on illicituse of herbal cannabis material, rather they would permit only the prescription of specific cannabis-basedmedicines approved by the regulatory authorities. GW's medicines would not therefore face anyadditional competition as a result of this change. Any potential competitor would still be required toconduct years of research to develop an alternative cannabis-based medicine to the satisfaction of the UKregulatory authorities and then to have that product placed in an appropriate Schedule by the Home Office.
Bridgehead understands that throughout the development and initiation of the clinical programme GW hasliased closely with the MCA and has obtained significant guidance on the specific requirements forpre-clinical and clinical safety data needed for marketing authorisation. Specifically the discussions haveclarified: acceptance by the MCA of the development of a plant extract based product rather than highlypurified or synthetic cannabinoid molecules; acceptance by the MCA and Committee on Safety of Medicines (CSM) that there is adequateinformation on the toxicology of tetrahydrocannabinol (THC), the major cannabinoid present inGW's high THC product, and that therefore no further toxicology studies will be required; there is less data on the preclinical safety of cannabidiol (CBD), a further naturally occurringcannabinoid in the plant. Therefore an additional chronic toxicity (carcinogenicity) study will berequired prior to Marketing Authorisation for long-term use. The requirement, however, issignificantly less than for new chemical entities (NCEs). Prior to completion of a satisfactorycarcinogenicity study, a marketing authorisation for a CBD-containing product could be obtainedbut this would be restricted to six months, or possibly to a total dose of no greater than six monthstreatment at maximum dose; in discussion with the MCA it has been agreed that the optimal regulatory route for Europeanlicences will be an initial submission to the MCA followed by application for licence in the otherEuropean states, through the mutual recognition procedure; and through ongoing discussion and amendment to the clinical trials exemption certificates, GW hasgained authorisation to proceed with long term extensions to their Phase II studies, includinglong-term extensions to those studies with formulations that include CBD.
Bridgehead understands that based on these discussions GW plans that the sequence of regulatoryapplications will be as follows: chronic use of high THC in cancer pain and possibly multiple sclerosis; acute use of a THC/CBD mixture in a 1:1 ratio for a number of indications with initial focus onmultiple sclerosis and cancer pain; and chronic use of THC/CBD in the 1:1 ratio for a number of indications with the initial focus againbeing on multiple sclerosis and cancer pain.
In Bridgehead's opinion, for wider registration within Europe it cannot be assumed that the viewsexpressed by the MCA and the limited requirements for additional data will be shared by other MemberStates or that all Member States will adopt a similar view to the UK authorities regarding changes to thelaw on the use of cannabis. Some countries such as Germany, Italy, Holland and Belgium are likely to takea more relaxed view than perhaps others. GW is aware of this situation and plans to have separatediscussions with the regulatory authority of each Member State. It may be reasonable to assume thatmany European countries will approve the use of products with little or no additional data to that requiredby the MCA. However, a number of Member States may require additional preclinical or clinical studies.
Bridgehead understands that pre-IND (investigational new drug) filing discussions have been held with theFDA regarding their requirements in terms of clinical and pre-clinical data for a new drug application.
During 2000, the FDA issued draft guidelines on the requirements for development of plant-basedmedicines. These are encouraging to GW as they recognise the differences between plant-basedmedicines and synthetic pharmaceuticals. As a result a number of requirements are simplified, delayed oromitted with the overall effect of simplifying the requirements for licensing of plant-based medicines inthe US. However, additional work is likely to be required within the US particularly in the form of additionalcarcinogenicity and other preclinical toxicology studies. These requirements will be clarified throughfurther pre-IND meetings with the FDA.
Following introductions from the Home Office to various US Government agencies, GW has heldmeetings and continues to have ongoing positive discussions with the Drug Enforcement Agency (DEA),the Office for National Drug Control Policy (ONDCP) and the National Institute of Drug Abuse (NIDA).
ONDCP has commented publicly on medicinal cannabis as follows: "To have medicine determined byscience and not by popular will is exactly what we support.'' In May 2001, GW received its first DEA licence to import product into the US. Bridgehead considers thatthis is an important step for the Group demonstrating progress in the US and confirming the potential fordeveloping products for the US market.
In the UK, GW operates under licences granted under Section 7 of the Misuse of Drugs Act 1971 (the Act).
These licences allow the Group to cultivate, possess and supply cannabis for the purpose of medicalresearch. Licences under the Act are issued on an annual basis. The Home Office automatically renewedGW's licences after the expiration of the first, second and third year and has stated to GW that futurerenewals should be processed in the same way.
Intellectual property strategy and its commercial implication In Bridgehead's opinion, much of the value of GW lies in its Intellectual Property and it is important that thisbe maintained, strengthened and added to as much as possible. GW has considerable know-how backedby patent applications. Such know-how, including the know-how and plant variety rights exclusivelylicensed to GW from Hortapharm, is not readily available elsewhere.
GW has made initial filings of five patent cases, and has more in preparation. The Group is the exclusivelicensee of one other patent case and of some plant variety rights. The five cases in GW's name have beenfiled within the last 12 months; the licensed case is close to grant in the US.
The cannabinoid field has been the subject of some patenting by third parties. In Bridgehead's opinion, it isunlikely, but not impossible, that either GW or third parties will be able to gain ‘master' patents becausethere is considerable prior art. GW's policy of forming a web or matrix of intellectual property rightsprotecting their developments is therefore correct. Bridgehead understands that GW has instructed itspatent attorneys to carry out searches and put in place watches for third party patents and patentapplications and, where necessary consults its patent attorneys on whether such patents and patentapplications are relevant to its business.
In Bridgehead's opinion the very considerable difficulty for a third party of showing "essential similarity" oftheir products to GW's botanical products means that GW is unlikely to meet direct generic competition.
The Group may, however, meet indirect competition from third party products which are not the same astheirs, but which can provide slightly different, equivalent or even better results ("near copies"). A thirdparty wanting to develop such "near copies" will, unlike conventional generic copyists, have to go throughthe full regulatory process. The value of the GW intellectual property will therefore rest largely on the complex botanical nature of the Group's products; the Group's patents/applications; and whether superior results can be achieved with GW's products compared with those of itscompetitors.
Bridgehead understands that GW believes that it can get to the market quickly because of the prior artexperience with cannabis. However, the possibility of this quick approval will also apply to any third partyseeking to register a ‘near copy'. Given that there does not appear to be any such third party seeking tocompete directly with GW at this time, GW's lead time provides the Group with an extremely strongcompetitive position.
Marketing and sales strategy Bridgehead understands that GW's strategy is to produce cannabis-based medicines for the worldwidemarket. In Bridgehead's view the UK represents a relatively more certain market than that usual for a newdrug entry. The different regulatory and political climates within other countries means that the risk will beincreased in these countries, affecting the market potential for GW's products. The marketing of pharmaceutical products internationally is generally a massive undertaking, requiring theinput of tens or even hundreds of millions of dollars in promotional funds, together with the activeparticipation of field forces numbering several thousand. There are some exceptions to this rule, whereproducts address very evident unmet needs in focussed markets which are under the control of a smallnumber of well-informed specialist physicians. Of the main markets for the GW products, arthritis falls inthe first, very expensive category, while multiple sclerosis and cancer pain could be considered to fallwithin the more niche, second group.
Bridgehead considers that at present and for the foreseeable future GW, as a small group which has todate concentrated entirely on the development of pharmaceutical products, has neither the infrastructurenor the financial resources nor the in-house expertise to support commercialisation of these products ineither of these market types, with the possible exception of selected national markets for niche productuses. In recognition of this, the Group has put forward a strategy involving partnerships with larger players,covering either just the marketing of the products or in some scenarios also some of the expensive latestage development work. In the great majority of cases these will be industry-standard licensing deals,involving initial lump-sum payments for access to rights, some benefits from product supply andsubsequent royalties on sales. The only exception to this rule could be isolated niche opportunities of thetype mentioned above, where the Group might seek in certain countries to retain greater control over andinvolvement in its product, and potentially greater revenue shares, by appointing a distributor, with morelimited duties and rights. In all cases this implies a reliance on a third party to achieve the Group'sobjectives.
As a general principle Bridgehead considers that this is an appropriate strategy. The reliance on thirdparties that is involved, while being associated with a degree of risk, is both unavoidable and commonwithin the industry.
The Group's approach to implementation of this strategy is to delay the establishment of partnershipagreements until as late as possible – in some cases even until the products are virtually on the market – inorder to build as much value as possible into the products before agreeing financial terms. In Bridgehead'sopinion, this is a higher risk approach than seeking earlier agreements, and relatively unusual in theindustry, since there is in all pharmaceutical development programmes an in-built possibility that theproduct may not match expectations at a late stage, when it would be lost without ever having earned cashfor the Group. Given the breadth of the GW portfolio, however, which leaves several alternative earningopportunities if one fails, and the degree of existing data to support the concepts, Bridgehead considersthe additional exposure resulting from taking this approach is only moderate, and is compensated by theprospect of higher earnings than would otherwise be achieved.
Within this overall strategy a number of different approaches are possible – seeking just one globalpartner, or many local ones, for example. Given the nature of the products and their markets, the scenariosconsidered by GW give a reasonable picture of some of the key options facing the Group.
Bridgehead considers that the broad commercialisation proposals of the Group are appropriatestrategically, although with slightly greater than industry average risk due to the late licensing approach,and achievable contractually. They do imply heavy dependence on third parties, but that is the norm for acompany in this situation, and with potentially attractive products such as GW's, it should be possible tofind high grade partners.
Cannabis-based medicines The plant Cannabis sativa, also known as hemp, contains more than 60 chemically related 21-carbon cyclichydrocarbons known as cannabinoids plus smaller amounts of terpenes and flavenoids.
D9-tetrahydrocannabinol (THC), is the most abundant of the cannabinoids and is generally considered toaccount for the psychoactive properties of cannabis. Other cannabinoids are thought to have therapeuticproperties and/or to modify the effects of THC. Examples include cannabidiol (CBD) and cannabinol.
GW is developing whole plant extracts of proprietary cannabis plant varieties, with initial focus onproduction of extracts from plant varieties that have been bred to provide a pre-determined content of THCand CBD. GW incorporates extracts from these plant varieties into a range of drug delivery technologiesincluding a sub-lingual spray, sub-lingual tablets and an inhaler, which is based on vaporisation technology.
All products undergo a full pharmaceutical development programme, including pre-clinical and clinicaltrials, with a view to obtaining approvals from regulatory authorities around the world.
Bridgehead believes that GW is the sole worldwide, licensed producer of pharmaceutical grade cannabisplant materials, i.e. materials designed to comply with pharmaceutical regulatory requirements. A Dutchproducer also claims to produce medical grade cannabis with varying ratios of CBD to THC, but does nothave a government licence. This gives GW a significant time advantage over other competitors wishing totake a similar approach to the production of cannabis extract.
Mechanism of action of the cannabinoids Bridgehead understands that the beneficial therapeutic effects reported by patients who use cannabisresult from the effects and interaction of cannabinoids on a system of cannabinoid receptors within thebody. The underlying mechanisms of action are not well understood, but cannabinoids are believed toexert their effects by binding to certain cells within the body, and modifying their physiological state.
The cannabinoid receptors The cannabinoids affect the body through two different receptors (CB1 and CB2). These are structureslocated on nerve cells or other tissues that are only activated by certain types of molecules, such ascannabinoids. They are also activated by the chemical anandamide, produced in the body, which has asimilar but weaker effect than THC. The CB1 receptor is discretely distributed in the brain and centralnervous system. Communication between brain cells, or neurons, is accomplished by movement ofchemicals across a small gap called the synapse. Chemicals, called neurotransmitters are released fromone neuron – the presynaptic nerve terminal, then cross the synapse and are accepted by the next neuronat a specialized site – the postsynaptic receptor. Cannabinoids are believed to bind to receptors(presynaptic or postsynaptic) on certain neurons, and mostly have an inhibitory action.
High CB1 receptor densities are found in areas of the brain controlling movement, coding sensoryinformation/cognition and storing memory. Cannabinoid binding to these receptors may explain theirinhibitory effect on such activities. The low density of cannabinoid receptors in the brain area controllingrespiration could account for the lack of reports of cannabis producing profound respiratory depression inhumans.
In contrast, the CB2 receptor is found primarily in the spleen and cells of the immune system. In generalCB1 and CB2 receptor affinities for several cannabinoids are similar with the exception of cannabinol,which appears to be more selective for the CB2 receptor. The role of CB2 cannabinoid receptors in theimmune system has not been established, but they may have a modulatory role possibly shown by theimmunosuppressive and anti-inflammatory effects of cannabinoids.
Potential mechanisms of action of GW products GW believes that cannabis with high concentrations of the major cannabinoid, THC, will be useful for reliefof neurogenic pain (including cancer pain). GW believes that THC works in several ways: as aneuromodulator (a chemical that activates or inhibits the transmission of nerve impulses); as an analgesic;and also as an anti-inflammatory. In addition GW believes that cannabis with high concentrations of thefurther cannabinoid, CBD, will be useful for the treatment of spasticity – an abnormal increase in muscletone, in multiple sclerosis, spinal cord injury, phantom limb pain and peripheral neuropathy. GW furtherbelieves that CBD modulates the activity of the immune system and through pre-conditioning CB1 andCB2 receptors. It is also a weak analgesic, an anti-inflammatory (possibly via Cox 2 inhibition) and a TNFinhibitor. In Bridgehead's opinion these are credible possible mechanisms of action for THC and CBD,reflecting the current state of research.
GW believes that beneficial interactions occur when THC-CBD mixtures are used. Further, GW believesthat THC-only preparations (such as the synthetic Marinol) have not become major products as they do notbenefit from these interactions, have limited therapeutic efficacy and are poorly tolerated by patients. Thismay be due to the fact that these products are oral capsules which give variable absorption rates andmeans that patients are unable to titrate and control their dosage. Such synthetic cannabinoids couldtherefore potentially benefit from the more effective drug delivery technologies such as those which GWis developing. The limited therapeutic efficacy may also result from the complex mechanism of action, forrelief of symptoms using cannabis. This complex reaction appears to involve a variety of chemical andreceptor interactions. By contrast, synthetic THC effects appear to involve only limited receptorinteractions. In Bridgehead's view, the superiority of GW's extract approach over the synthetic production ofcannabinoids is a critical issue for competitiveness. Bridgehead considers that beneficial interactions mayoccur with the THC:CBD mixture and that an answer to this question should be provided in the ongoingclinical trials of this product. Such clinical trials will also demonstrate the effects of non swallowed oraldosage forms, such as GW's sublingual spray.
Drug delivery technologies Bridgehead understands that GW has three delivery systems developed or under development: sub-lingual spray technology that is being used for the Group's lead products, the first of which isnow in Phase III trials; sub-lingual tablets, which have been used in the Group's Phase I trials and in one Phase II trial.
These tablets have been developed in-house by the GW team; and inhaler technology (based on vaporisation). This is partly funded by a £150,000 grant awardedunder the UK Government's SMART award scheme which is subject to rigorous scientific andfinancial assessment. GW's device will enable patients to benefit from the rapid relief associatedwith inhaled delivery but without exposure to the carcinogens produced when cannabis issmoked. Since obtaining the SMART award, GW has entered into a partnership with a major UKelectronics company to support this project. Intellectual property rights relating to this technologywill be owned exclusively by GW. First trials using this device are expected to be underway duringthe second half of 2001. The device has potential for use in the administration of non-cannabisproducts and GW will also be exploring its wider commercial applications during the course of itsdevelopment.
GW has collaborated with design engineers in the development of specialist security technology whichcan be applied to all its drug delivery systems. The aim of this anti-diversionary technology is to prevent anypotential abuse of cannabis-based medicines. In addition, this technology is intended to allow for therecording and remote monitoring of patient usage. The device will therefore recognise and prevent anyabnormal use, which differs from expected prescribed usage. Such data would be extremely valuable toGW and would also allow for efficient control in clinical trials. GW's design team has developed the first setof prototypes for the technology as applied to the sub-lingual spray pump and a patent application has beenfiled.
Bridgehead believes that this technology has the advantage of potentially allowing the rescheduling ofGW's CBME in its various formulations to lower than Schedule 2, under the Misuse of Drugs Regulations.
The technology also has applications for the delivery of other drugs, in particular controlled drugs such asopiates. The Group is therefore evaluating options for the licensing of this technology to otherpharmaceutical companies.
Competitive Environment In Bridgehead's opinion GW has no direct competitors for the production of legitimate pharmaceuticalgrade cannabis. The therapeutic properties of cannabinoids are attracting considerable interest in thescientific community and pharmaceutical companies are starting to evaluate synthetic cannabinoid-likedrug candidates. However, there are significant barriers for potential competitors wishing to set up acannabis/cannabinoid development and production programme. In addition to the regulatory andbureaucratic hurdles that would need to be overcome, GW has built up a lead position in production ofcannabinoid extracts from plants, which would require any new competitor to catch up with several yearsof work. GW is also the world's only source of cannabis suitable for use in full-scale pharmaceuticaldevelopment. GW is further protecting its market through the establishment of intellectual property rightscovering botanical research, pharmaceutical development and drug delivery systems (see Section 1.6Intellectual property strategy and its implications).
Other companies are known to be developing medicinal cannabinoids. These include:앫 Pharmos Corp, which is developing Dexanabinol, an optic isomer of THC reported not to have thesame psychotropic side effects. This is in Phase III clinical trials for the treatment of traumaticbrain injury. Pharmos is also developing Dexanabinol for stroke and it is reported to significantlysuppress functional and pathological brain defects in experimental autoimmuneencephalomyelitis, the most widely-used animal model of multiple sclerosis; and Atlantic Technology Ventures Inc. is developing CT-3 (1',1'-Dimethylheptyl-delta-8-tetrahydrocannabinol-11-oic acid) which has FDA approval for clinical testing. A Phase I trial usingoral and parenteral formulations is underway in France. Studies employing several animal modelssuggest that CT-3 is an effective, orally active anti-inflammatory and analgesic with nopsychoactive effects.
Oxford Natural Products which is developing a THC hemisuccinate suppository, licensed from theUniversity of Mississippi, for nausea.
In addition to the clinical programmes outlined above there are also several research programmes such asthose at University of California, San Diego and University of California, San Francisco, who were awardeda $3 million grant by the State in early 2001 to test cannabis for a variety of medicinal purposes. The projectcalls for proposals for studying cannabis in HIV-infected, AIDS, cancer and multiple sclerosis patients andBridgehead understands that GW is working with the universities in these programmes. GW also fundscertain projects in the area of cannabis research at the University of Aberdeen, where scientists havedeveloped a technique that makes cannabis soluble so that it can be used in injections or sprays. TheAmerican Cancer Society has awarded a 3-year, $361,000 grant to researchers at the Albany College ofPharmacy to develop a cannabis skin patch to control chemotherapy-related nausea and vomiting. Marinoland other oral drugs are approved for this indication, but vomiting can preclude their effectiveness. Othergroups are developing research molecules, which currently are very far from market and may not actuallybe intended to be developed as pharmaceuticals. The active ingredient of GW's products comprise whole extracts of plants. Two specially bred plantspecies are used because of their specific cannabinoid composition. Products will contain the extract ofeither of these species or a blend to obtain the desired cannabinoid ratio. These are then formulated forincorporation into drug delivery systems.
GW's products are classified by their principal cannabinoids, specifically the ratio of these cannabinoids.
The basis of the current development portfolio is the content and ratio of THC and CBD. A number of GW'sproducts are being developed for more than one disease indication. Each indication will require separateclinical trials programmes and a regulatory dossier in order to gain product approval for use in the targetmedical condition. GW's product portfolio is being enhanced through the development of new drugdelivery systems and new cannabinoid products are being considered for evaluation. Bridgeheadunderstands that GW intends to seek indications in a phased manner with the timing of applications beingdependant on regulatory and scientific advice, availability and results of appropriate pre-clinical safety data,and Phase II and III studies.
Products addressing several target markets are already in Phase II clinical trials. Similar trials for additionaltarget markets will commence in the near future. The Group's first Phase III trial in multiple sclerosis hasjust commenced, with the Phase III trial in cancer pain due to start in the second half of 2001. GW is able todevelop the pipeline at such a rapid pace because much of the early work already carried out by its teamneed not be repeated for each additional target market.
GW's Product Portfolio This CBME has a high content of THC (95% of cannabinoid content +/− 1.5%) and is being developed fortreatment of pain including cancer pain and migraine. Bridgehead believes that there is strong evidencethat cannabinoid receptor agonists induce selective pain processing through the activation of CB1receptors, both in the spinal cord and brain. There is some evidence that CB1 receptors may suppresshyperalgesia (increased pain sensitivity) and allodynia (pain from stimuli which are not normally painful).
Cannabinoids also exhibit synergism with opioids, possibly by stimulating the release of kappa-opioids.
THC:CBD (narrow ratio) This CBME has a 1:1 ratio of THC to CBD achieved by mixing in the correct proportion the extracts fromhigh THC producing plants and high CBD producing plants. The product is intended for use in multiplesclerosis, spinal cord injury, peripheral neuropathy (diabetes and AIDS) and other neurogenic pain, and alsopossibly in the relief of cancer pain.
THC:CBD (broad ratio) This CBME consists of higher proportions of CBD than THC and is intended for use in rheumatoid arthritisand inflammatory bowel disease. This product formulation hopes to exploit the properties of CBD such asits effect on the immune system, its anti-inflammatory effect and its reduced psychoactive effectcompared with THC.
High CBD (쏜95%CBD) This CBME is mainly CBD again hoping to exploit the different attributes of CBD compared with THC and isintended for use in psychotic disorders such as schizophrenia, epilepsy and movement disorders andstroke/head injury.
Status of GW's Current Product Portfolio.
The figure below illustrates the Group's current approach in terms of products to be marketed (defined bythe levels and ratio of THC to CBD) and the indications for which such products will be marketed. TheGroup reserves the option to change the focus of its effort depending on the clinical performance ofproducts for various indications. Bridgehead considers that a parallel development programme such asthis, allowing faster development times, will have a requirement for bridging studies. The figure also illustrates the position to which the Group is moving, by taking advantage of the potential togain approval on some products earlier than others, in line with MCA recommendations. It should be notedthat cancer pain and multiple sclerosis can be treated with both the high THC product and the THC:CBDnarrow ratio product.
Multiple Sclerosis (narrow ratio) Spinal Cord Injury Peripheral Neuropathy (Diabetes/AIDS) Other Neurogenic Pain (Arachnoiditis/Phantom Limb Pain etc) Rheumatoid Arthritis Inflammatory Bowel Diseases Psychotic Disorders (Schizophrenia) Stroke/Head Injury Pivotal regulatory programme underway Product evaluated in Phase II trials Early stage plans being formulated Table 1 Market potential for GW products
Worldwide patient Competitive situation High THC
Cancer pain
30-50% solid tumour 26 million patients Current treatments are effective Highly competitive. Several major but are often not prescribed companies are involved. There are experienced by 30-60% effectively. Therefore around 30% several competing technologies and with active disease and of patients still suffer intractable many products in development for new cases in 1996.
66% with advanced this indication.
9.1% of the US population Lower level of unmet need since Search for new agents with the - approximately 23 million.
the introduction of triptans, e.g.
efficacy of sumatriptan with more sumatriptan (5-HT agonists) based acceptable side effect profile. Major on the interaction with the body's companies involved in development of 5-HT agonists and other agonistsand antagonists.
Prevalence in US 350,000 Complete symptom relief, The market for treatment of the and Europe 450,000. Pain prevention of relapse and underlying disease is becoming occurs in 쏜 50% of treatment of the underlying more competitive e.g. Interferons.
condition are all underserved.
The market for symptom relief isless competitive.
Spinal cord injury 15-40 cases per million High unmet need. Existing drugs Major companies involved in drugs ineffective in treating nerve for pain relief. Anecdotal evidence 250,000 people in the US.
related pain.
that cannabis provides effective 쏜 50% of patients have relief from pain allowing reduction of severe pain.
other pain medication.
US - 1.5 million to 2.8 High unmet need. No established High potential for new drug (diabetic peripheral million. 4 million diabetics treatment for pain arising from development for neuropathic pain.
suffering from peripheral nerve damage. Available Major companies involved in treatment for nerve dysfunction development of drugs for pain e.g. spasticity have limited effectiveness and have poor sideeffect profile.
High unmet need. No established High potential for new drug neuropathic pain inc.
treatment for pain arising from development for neuropathic pain.
nerve damage. Available Major companies involved in treatment for nerve dysfunction development of drugs for pain e.g. spasticity have limited effectiveness and have poor sideeffect profile.
5.7 million worldwide.
Treatment of underlying condition Large competitive market – is linked to symptom relief, e.g.
increasingly competitive in both the DMARD area and in symptom relief.
Prevalence varies from Not seen as a priority by Competitive market with 0.08% (in Japan) to 0.15% physicians as not life threatening.
involvement from major (in USA). In France, High unmet need as current Germany, Italy, Spain, UK, therapies have undesirable side USA and Japan there are effects, some of which are very 1.5 million patients.
serious. No treatment can keepthe condition fully under controland patient compliance is poor(55-70%).
3.6 million in US, France, Schizophrenia is currently poorly Highly competitive. High level of Germany, Spain, UK and managed. Adverse side effects, investment by major pharmaceutical and poor patient management companies in this area lead to non-compliance. The focus demonstrates the competitiveness is on improving efficacy whilst and the potential rewards expected.
reducing adverse side effects andcost of medication.
Worldwide, the prevalence Lack of awareness within primary New drugs expected to form an of epilepsy is 40 million.
care physicians limits effective important part of the market in the management. Major unmet need next 10 years. Involvement of major in refractory epilepsy.
445,000 (stroke).
Estimated 700,000 stroke 400,000 deaths worldwide per Growing market with incidence patients in the US. year. Increasing interest in increasing with ageing population neuroprotective activity of and significant mortality.
compounds post stroke, Involvement of major preventing further neurological pharmaceutical companies and focus of large researchprogrammes.
Major Indications for GW's Portfolio of Products
Technical Rationale Bridgehead believes it is generally accepted that cancer pain is under treated with at least half of patientsreceiving inadequate relief from their pain. Some of the most encouraging clinical data on the effects ofcannabis and cannabinoids on chronic pain are from studies of cancer pain. Whilst existing medicines aremostly ineffective in relieving nerve related pain and dysfunction, there is a wealth of patient evidence, aswell as animal studies, supporting the fact that cannabis provides effective treatment. Of additionalinterest to the cancer market is the fact that cannabis has also been shown to provide benefit to cancerpatients suffering nausea and vomiting from chemotherapy as well as stimulating appetite. Hence,cannabis has the potential to provide considerable advantages over current medications to cancerpatients. GW is initially targeting its high THC product into this market but feels that its THC:CBD productmay be more appropriate in the longer term.
Commercial potential The worldwide incidence of cancer is approximately 6 million patients per year and rising due to ageingpopulations. The worldwide prevalence for active disease was about 26 million patients in 2000.
Current treatments The World Health Organisation (WHO) has published guidelines on the management of pain in cancer andthe approach has been shown to provide adequate analgesia in 90 per cent. of cancer patients, and over75 per cent. of terminally ill cancer patients. The approach advocates the use of opioid analgesics,non-steroidal anti-inflammatory drugs (NSAIDs) and adjuvant medications. WHO believes opioidanalgesics to be extremely effective in a significant majority of patients with cancer pain. About 1-10 percent. of patients are opioid-insensitive (25 per cent. of terminally ill cancer patients). The most commoncause of opioid insensitivity is neuropathic pain associated with cancer, which would require higher dosesand lead to a greater risk of side effects. Careful use, titrated against pain is safe, although liberal use ofopioids may lead to the syndrome of neurotoxicity with delirium, hallucinosis, myoclonus, seizures,hyperalgesia, tolerance and constipation. Rare side effects in properly titrated patients include respiratorydepression and drug dependence. It is likely that fear of these side effects prevents many cancer patientsfrom receiving adequate analgesia. Use of adjuvant drugs such as anti-depressants, anti-epileptics,corticosteroids, bisphosphonates and strontium 89 in cancer pain is supported by anecdotal experience. Bridgehead understands that despite the validation of the approach advocated by WHO, studies indicatethat pain is experienced by 30-60 per cent. of cancer patients with active disease, and more thantwo-thirds of patients with advanced cancer. Some of the barriers to proper pain management have beenidentified as inadequate assessment of pain, patient reluctance to report pain and inadequate staffknowledge about pain management. Competitive situation Bridgehead Technologies Ltd believes that there are several factors driving growth and competition in thecancer pain market, i.e.
The worldwide incidence of cancer pain is increasing due to increasingly ageing populations in themajor markets (US, Canada, EU, Japan).
Patient expectations about pain-free illnesses are also rising, due in part to improving awarenessabout the safety and efficacy of opioids in the treatment of cancer pain.
Technology drivers of market development include drug delivery advances and an increasingrange of receptor targets for which drugs are in development.
In addition, the application of various technologies (transgenic animal models, high throughputscreening, combinatorial chemistry, functional imaging) will accelerate the process of analgesicdrug discovery.
However, since pain is inadequately controlled because current therapies are not being used optimally theoverall drivers for expansion of the market could be reduced if improvements in application of currenttherapy were to take place. This is based on the finding that 90 per cent. of cancer patients should haveadequately controlled pain using current drugs.
In addition several major companies are involved in developments in this highly competitive market, with anumber of competing technologies and many products in development for this indication. In particularBridgehead believes that the following competitor technologies may have an adverse impact on themarket share for GW products in cancer pain: innovative formulations and delivery of existing opioid analgesics; opioid agonists (drugs which combine with receptors to initiate a response) that do not give rise tocentral side effects. They could for example be combined with opioid antagonists (drugs whichbind to a receptor and are inhibitory) or act peripherally; and ion channel modulators (drugs which change the rate of transmission of impulses along the nervefibre).
Potential market value Bridgehead considers that the potential market value for this product will be determined by the pricewhich GW will be able to command for its product and the likely rates of penetration. Both of these will bedetermined by the product's efficacy and side effect profile compared with current treatments for cancerpain. In terms of price, existing treatments for cancer pain range from inexpensive generic opioids toexpensive surgical procedures (e.g., debulking of tumours, spinal surgery). The realistic price GW will beable to charge is illustrated in the following scenarios: Scenario 1. High THC product enables dose reduction of opioids and is used only as an adjuvant toopioid therapy in patients, resulting in a low price (under £1000 annual treatment cost per patient); Scenario 2. High THC product enables patients to avoid more costly invasive surgical procedures,resulting in a high price (쏜£2000 annual treatment cost per patient); and Scenario 3. High THC product treats effectively the cancer pain of patients whose pain is resistantto other forms of treatment, resulting in a high price.
In terms of market penetration, Bridgehead understands that: the percentage of patients with unmet needs in cancer pain is approximately 40 per cent.; the percentage of patients with unmet needs in neurogenic and neuropathic pain per se is over60 per cent.; and most cancer patients with unmet pain needs are suffering from neurogenic pain (55 per cent.). Since GW's high THC product is believed to work more effectively in treating neurogenic and neuropathicpain and if clinical trials confirm this efficacy, then Bridgehead believes that the target market for GW'sproduct could possibly be as high as 30 per cent. of the neurogenic pain market. Given that the totalnumber of cancer cases is in the order of 1.9 million in the UK, 12 million in Europe and 9 million in the US,this represents a very high potential market value.
In Bridgehead's view, the high THC product has a good chance of launching and performing well in the UK,due to the support GW's activities have received from various regulatory authorities, the pre-existingsafety record for cannabis and the fast track development status for cancer drugs.
Development plans Phase 1 studies for CBME have been undertaken establishing the tolerability of the dosing regimen inhealthy subjects and refining the formulation and method of delivery for larger scale clinical studies. PhaseII studies with GW products have not been undertaken although there is a wealth of anecdotal reportsrelated to the apparent benefit of cannabis-containing products in the treatment of neurogenic andneuropathic cancer pain.
A Phase III study in patients with cancer pain using the 1:1 THC:CBD and high THC products is scheduledto commence in the second half of 2001. The Group aims to ensure that the high THC product is in aposition to gain approval for use in cancer pain as early as possible. Bridgehead considers that the 12months allowed for completion of this trials programme is achievable. Key risks to these timings relate tothe selection of trial centres and patient recruitment. Additionally the Group needs to include sufficientpatient numbers in the study to ensure that it does not result in an equivocal outcome.
Bridgehead considers that the expected advantages of the high THC product in the treatment of cancerpain are: The product addresses significant unmet need in the cancer pain market.
High THC extracts have a novel mechanism of action compared with current treatments forcancer pain.
The product has potential beneficial effects on appetite stimulation and nausea and vomiting, aswell as on pain.
There is a favourable side effect profile compared with current drug treatments for cancer pain.
The product is aimed at a relatively large market.
The benefits of CBME containing high THC are unproven in this indication.
Cognitive impairment may limit usage.
There is significant competitor activity in the cancer pain market with many large pharmaceuticalcompanies active in this therapeutic area and there are significant numbers of competingtechnologies to address cancer pain.
Multiple Sclerosis Technical Rationale Multiple sclerosis results from inflammation and scarring of tissue in the brain and central nervous system,which breaks down myelin, the sheath around the nerve fibres. This process, known as demyelination,can reduce a nerve's ability to transmit information, slowing down or blocking the nerve signals, which inturn leads to sensory and/ or motor dysfunction. Demyelination is followed by sclerosis, or a hardening ofthe nervous system tissue, usually at multiple sites. During acute attacks of this chronic relapsing andremitting disease, sufferers can experience problems with urinary bladder control, pain, muscle spasm,spasticity and poor sleep. CBD has been demonstrated to have a muscle relaxant and neuroprotectiveantioxidant activity. Informed opinion supports the view that CBD is likely to be therapeutically active inmultiple sclerosis. There is also support for the view that the distribution of cannabinoid receptors in thebrain suggests that they may play a role in movement control. There is a further hypothesis thatcannabinoids might modify the autoimmune cause of the disease (where the body's immune systemattacks its own cells). If so, it is possible that cannabis may both relieve symptoms of MS and retard itsprogression.
There is anecdotal evidence for the effectiveness of cannabis in relief of the symptoms of multiplesclerosis, as well as results from clinical trials on a relatively small number of patients. Collectively, thesestudies indicate that cannabis may substantially control the symptoms of MS and may also play a role inmoderating the progression of the disease. The UK Multiple Sclerosis Society has reported estimates that3-4 per cent. of sufferers find relief from symptoms through illegal use of cannabis and GW's trials to datehave demonstrated benefit in all the principal symptoms. Commercial potential Patient numbers and trends Multiple Sclerosis affects approximately 2.5m people worldwide, with 350,000 in the USA; 100,000sufferers in the UK and 500,000 in European countries overall. The incidence appears to be increasing.
Approximately half the sufferers have the primary progressive form of the disease and half have therelapsing-remitting form and over 50 per cent. of people with MS experience pain at some time. Current treatment Current treatments to provide symptomatic relief during acute attacks include: anti-spasmodic treatmentsfor spasticity, e.g. baclofen, dantrolene, diazepam, tizanidine; oxybutinin and desmopressin for urinarysymptoms; baclofen and diazepam for tremor; conventional analgesics, hypnotics and anti-depressantsfor sleep symptoms.
Concerning current treatments, the UK Multiple Sclerosis Society has commented: "There are verylimited treatment options which people with multiple sclerosis can use for symptom management. This isespecially true of pain control, where few treatments are effective".
Competitive situation Bridgehead believes that competition in the market to treat the underlying disease (i.e. prevent relapseand disease progression) is intensely active. The therapeutic efficacy of beta Inteferon and glatirameracetate preparations are well established for the prevention of relapse and disease progression. However,these agents offer only partial therapies, do not work in many patients and have little impact on thesymptoms of multiple sclerosis. It seems likely that, in the future, combinations of therapies includingsymptomatic treatments will be more widely used in order to control the biological activity of this diseasebetter and improve the quality of life for sufferers. The level of competitive activity in the development ofdrugs for multiple sclerosis is illustrated by there being 69 drugs in development; 56 companies involved inthe area and 43 mechanisms of action proposed for drugs in development. In marked contrast, Bridgehead believes there is little competitive activity in the markets for multiplesclerosis symptom relief, the sole exception being the neuropathic pain market. Whereas neuropathiccancer pain is often peripheral; multiple sclerosis patients predomominantly suffer from centralneuropathic pain. Drugs used to treat central neuropathic pain include: amitriptyline where efficacy insome non-multiple sclerosis indications has been established, but efficacy in multiple sclerosis isdisappointing; mexiletine where the poor side effect profile requires intense monitoring of patients; andN-methyl D-aspartate receptor antagonists, which are ketamine-like substances under development.
Methadone also shows some promise, through a different mechanism of action from other opioids.
Bridgehead believes that there are significant opportunities in the multiple sclerosis symptom-relievingmarket as there is relatively little competitive activity in this market and there are enormous unmet clinicalneeds. It has to be noted that the market for multiple sclerosis disease-altering drugs has significantpotential to affect the market for treatment of multiple sclerosis symptoms. Effective drugs will preventrelapse, so reducing the number of days patients need to use symptom-altering drugs (and hence salesvolume).
Potential market value Bridgehead considers that GW's multiple sclerosis product could take a significant share (up to 25 percent. and potentially higher in the UK) of this market if results from Phase III clinical trials support theefficacy achieved in earlier trials and the effects achieved in this indication from smoking cannabis. Ifefficacy is confirmed, the product could also expect to command a high annual treatment price (쏜£2,000treatment cost per patient per year). Given the number of patients in the UK is 100,000, in Europe is500,000 and in the US is 350,000, GW could expect to derive substantial revenues from this market.
In addition Bridgehead considers that the MS product may eventually be shown to have disease-modifyingactivity in MS. If this is the case, a market penetration of 35 per cent. could be possible.
Development plans Phase I studies for CBME have established the tolerability of an initially proposed dosing regimen inhealthy subjects and helped to refine the formulation and method of delivery for larger scale clinicalstudies. Early results from the ongoing Phase II programme based upon studies of "N of one" design areconsistent with the wealth of anecdotal data indicating that a number of patients experience significantbenefit from cannabis-based products.
The first Phase III study, a double blind parallel group study of patients with pain, spasm, spasticity, bladdersymptoms or tremor, started in early May 2001. For each individual patient the symptom that is mosttroublesome will be selected as the primary outcome measure. Patients will receive 1:1 THC:CBD orplacebo for six weeks, at the end of which time all patients will commence a four week treatment period ofactive therapy. There is an initial period of rigid dosing followed by self-titration after three days. The studyis being undertaken in Oxford under the guidance of GW's Medical Director and can therefore be expectedto progress on schedule. The Oxford study is the first of a number of Phase III studies planned as part of acomprehensive Phase III trials programme over the next two years. Bridgehead considers that timings allowed for the clinical studies, at 18 months for the Phase III clinicaltrials are adequate assuming good investigator selection and study management. With successfuloutcome of the clinical studies, this programme could lead to an initial marketing authorisation for a highTHC product with an indication for pain and spasm in multiple sclerosis, with an unrestricted duration oftreatment, or to the approval of the 1:1 THC:CBD product, with a treatment duration limited to six months.
Once the carcinogenicity studies are complete, this programme will allow for the approval of the 1:1THC:CBD product for use in multiple sclerosis with an unrestricted duration of treatment.
Bridgehead considers that GW's THC:CBD (narrow ratio) product for use in multiple sclerosis has thefollowing merits.
GW's CBME is at a late stage in the pharmaceutical development process entering a number ofPhase III clinical trials.
There are enormous well defined unmet clinical needs in this market.
There is strong anecdotal evidence to support the efficacy of cannabis for this indication.
The efficacy of GW's product has been demonstrated in clinical trials.
Bridgehead considers, however, that the product is subject to some risks which are highlighted below.
Phase III trials may not substantiate the efficacy observed in Phase II trials.
Problems in carrying out effective blinding in clinical trials.
The Phase III studies in multiple sclerosis recruit patients who have one of a range of principalsymptoms, the most predominant of which is selected as the primary variable for that patient.
Success or failure will be determined for that variable. While this approach enables investigationand potentially demonstration of effect of the treatment on a broad range of symptoms associatedwith multiple sclerosis, it is not without some risk. If effectiveness of the treatment differsbetween the primary symptoms this design has the effect of diluting the benefit on thosesymptoms for which the treatment is most effective. In the worst case this can result in the studynot showing effectiveness on the primary variable overall, the factor on which marketingauthorisation will normally be judged, while it may be very effective on some of the underlyingsymptoms.
Rheumatoid Arthritis Rheumatoid Arthritis is a chronic, systemic, inflammatory disease that chiefly affects the synovialmembranes of multiple joints in the body. The disease is considered an autoimmune disease that isacquired and in which genetic factors appear to play a role. In most cases of rheumatoid arthritis, thepatient has remissions and exacerbations of the symptoms. GW believes that CBD may be effective in the treatment of rheumatoid arthritis since it acts as a weakanalgesic, an anti-inflammatory (possibly via Cox-2 inhibition) and a TNF-inhibitor. Bridgehead believesthese constitute credible potential mechanisms of action for the GW broad ratio product, and that furtherclinical studies will elucidate any clinically important mechanisms of action.
Commercial potential Patient numbers and trends Prevalence of the disease, worldwide, is 1-2 per cent. of the general population and rising with femalesoutnumbering males by 3:1. The number of patients with rheumatoid arthritis is approximately 2.1 millionin the USA, approximately 0.5 million in the UK and approximately 2.8 million in Europe.
Current treatment Early aggressive treatment of rheumatoid arthritis with disease modifying medications (DMARDs) iscommon especially when the disease is severe or very active. These reduce or prevent joint damage andpreserve joint integrity and function, but they tend to be slow acting, very toxic, of variable efficacy andthey do not provide analgesia. DMARDs include methotrexate, gold salts, penicillamine, sulphasalazine,cyclosporin leflunomide and cyclophosphamide. DMARDs are often used in combination withcorticosteroids or non-steroidal anti-inflammatories (NSAIDs) during the first few months while theDMARD takes effect. DMARDs are switched if side effects become a problem and used in combinationwith each other or with corticosteroids if use of a single agent is ineffective.
Corticosteroids are used intermittently at low dose to control flares and may be used intra-articularly, i.e.
within the joints if only one, or a few, joints are involved. Non-steroidal anti-inflammatories (NSAIDs) areused intermittently or continuously to control pain. They may be used first line in mild disease. Cox-2specific NSAIDs are selected where there are gastrointestinal problems.
Anti-TNF therapies (e.g. Enbrel) are disease modifying and have rapid onset. This approach shows greatpromise but the antibody-based products are extremely expensive, have to be injected, and are currentlyused only after failure on several conventional DMARDs. There is significant unmet need. The onset of the disease peaks at ages 40 to 50 years and patients willsuffer, on average, at least 20 to 30 years of active disease and its consequences. Pain and disability resultin loss of productivity and income and decreased quality of life. 50 - 60 per cent. of patients stop workwithin 10 years of diagnosis; ultimately 90 per cent. have to stop work. The life expectancy of RA sufferersis approximately 3 to 18 years shorter than that of the general population. The disease therefore hasserious consequences for patients, carers and society in general.
Currently available therapies are beneficial but not curative, and they can be safely and effectivelyadministered for only a portion of this total disease duration. There are concerns over long term toxicityand disease resistance with DMARDs leading to the need to switch patients from drug to drug. There arealso poor and inconsistent responses in some patients to these drugs. Toxicity is also an issue for longterm use of steroids. There are clear needs for safe, well tolerated drugs which act rapidly to stop disease progression and fordrugs which stop joint pain and tenderness and increase mobility. In both cases the treatments should besafe and well tolerated with no long term side effects. Competitive position The development pipeline for rheumatoid arthritis is very active with further anti-TNF drugs, novelanti-cytokine strategies, matrix metalloproteinase inhibitors and new Cox-2 inhibitors in development. Potential Market Value Bridgehead believes that strong anecdotal evidence exists to support the view that GW products mayprovide symptomatic relief in some sufferers of RA. Both the price which GW's product will demand andits likely market penetration will depend on its efficacy for treating RA, the extent to which it providesequivalent or superior pain relief to the Cox-2 drugs, the superiority of its side effect profile, and the degreeof disease modifying activity which it exhibits. Some illustrative scenarios are given below: Demonstrable symptom-relieving activity, with efficacy equivalent to that given by Cox-2inhibitors, no advantage demonstrated over Cox-2s in terms of improved symptom relief orimproved side effect profile; no disease-modifying activity. The price charged would need to besimilar to that of current Cox-2s (in the region of £1000 per patient per year) and the marketpenetration could be in the region of 2 per cent.
Demonstrable symptom relieving activity with advantages over Cox-2 inhibitors in terms ofimproved symptom relief and/or improved side effect profile; no disease modifying activity. Herepotential revenues from the product would be dependant on the trade off between price andmarket penetration. Market penetration could range from 5 per cent. to 15 per cent.
Strong disease-modifying activity and symptom-relieving activity, where the price charged couldbe higher than that for Cox-2s and market penetration could be expected to be in the region of20 per cent.
Bridgehead considers that GW could achieve significant sales in this attractive market where patientnumbers are 500,000 for the UK; 2,700,000 for Europe and 2,100,000 for the US, and where total sales ofEnbrel in the 12 months to April 2000 were over $400 million. In addition, if GW's product demonstratesdisease modifying activity then market penetration would be expected to be significantly higher resultingin further enhanced potential sales.
Development plans GW's programme in rheumatoid arthritis is at a much earlier stage than its programmes in cancer pain andmultiple sclerosis. However in-vitro studies have suggested that cannabis extracts have beneficial effectsas antagonists of TNF and beneficial effects have been shown in a mouse model of arthritis. Furtherin-vitro studies have demonstrated the presence of receptors to CBD on lymphocytes which may haverelevance to effects on the immune system concerned with auto-immune disease such as arthritis. Theresponses of the first two patients recruited into the Phase II programme with arthritis are reported to beencouraging.
A Phase II pilot study is planned for the second half of 2001, studying the effect primarily on pain andstiffness. This is a short-term study that is anticipated to provide data to enable the finalisation andinitiation of a Phase III programme across Europe commencing in the latter half of 2001. A second pilotPhase II study is also planned which will study surrogate markers of disease modifying activity.
Bridgehead considers that this is an ambitious programme, with initiation of the Phase III programme oncurrent scheduled timings allowing very little time to gain information from the pilot Phase II programme.
Plans beyond the first Phase III study have not been elucidated and no backup studies have beenidentified.
There are significant unmet clinical needs in the RA market.
Approval for use in RA is likely to lead to approval for use in other rheumatological and autoimmuneconditions.
The market size is large.
Potential indications such as rheumatoid arthritis provide market opportunities which combineboth significant market size and relatively high unmet medical need. However evidence for theeffectiveness of cannabinoids in this indication is minimal and primarily comes from data in animalmodels. There is limited clinical evidence yet to support the hypothesis that cannabinoid productswill modify the underlying disease in RA.
The disease-modifying and symptom-relieving markets are highly competitive and significantadvances in competing technologies may severely reduce the market potential for GW products.
As an initial indication for rheumatoid arthritis, GW's product would be limited to relief of pain andmorning stiffness (rather than DMARD activity) and this is an area where a wealth of products arealready licensed (although these products do have a range of unpleasant side effects). GW needs to plan to develop its clinical programme in this area appropriately.
Schizophrenia, Epilepsy and Stroke Research regarding cannabis' potential role in schizophrenia treatment is in its infancy. However,emerging research on the endocannabinoid, anandamide, from scientists at the University of California atIrvine found that anandamide acts as a brake on neural activity in the brains of rats, and might be used totreat the side effects of diseases that cause uncontrollable movements.
While there are several studies and references by the Institute of Medicine, House of Lords Science andTechnology Committee, Australian National Task Force on Cannabis, and others regarding cannabis'anti-convulsant properties, there are few human studies specific to epilepsy. The 1998 House of LordsScience and Technology Committee expressed interest in the use of CBD to treat epilepsy, but refrainedfrom recommending the drug because of the limited number of participants in controlled studies. Theynoted that the British Medical Association determined that CBD "could possibly provide an adjunctivetherapy for patients poorly controlled on presently available drugs." The BMA did not believe that THCdemonstrated potential.
Research indicates that cannabinoids possess neuroprotective properties which may be useful in thetreatment of stroke. Researchers at the National Institute for Mental Health (NIMH) demonstrated in 1998that the cannabinoids THC and cannabidiol (CBD) are potent anti-oxidants in animals. Anti-oxidants areused to protect stroke and head trauma victims from exposure to toxic levels of reactive molecules – freeradicals that are produced when the brain's blood supply is cut off. Head injuries and strokes cause therelease of excessive glutamate, often resulting in irreversible damage to brain cells. NIMH scientistsfocused the bulk of their research on CBD because the compound is non-psychoactive, fast acting andnontoxic. They found that CBD protected rat brain cells that had been exposed to toxic levels of glutamatebetter than standard anti-oxidants like vitamins C and E. Researchers hope that the drug could someday beadministered to stroke victims to limit brain damage.
A previous study of 67 patients by the Pharmos pharmaceutical company in Israel demonstrates that asynthetic drug similar to CBD (Dexanabinol) reduced mortality and eased intracranial pressure in patientssuffering from severe head injuries. Dexanabinol also appears to be neuroprotective against brain damageincurred by certain types of seizures. GW expects to begin large, Phase III human trials on the drug inEurope and America in 2002. Bridgehead considers that GW's approach possesses considerable merit with the main strengths residingin the Group's basic technical approach based on the use of cannabis-based medicinal extracts in a varietyof indications. These merits are highlighted in section 5.1 below.
The main risks to the Group reside in the commercialisation of this technology. However, GW has puttogether a team and is developing a programme which understands and seeks to minimise these risks,which are highlighted in section 5.2 below.
Key merits of GW's approach Technology merits GW's medicines are derived from whole extracts of selected cannabis plant varieties and Bridgeheadbelieves that this approach has a number of advantages: GW is at the forefront of cannabinoid research with the ability to investigate the therapeuticcapabilities of its products to standards required for a pharmaceutical product; GW has unique access to a large number of cannabis chemovars, developed by Hortapharm,based on plants from legitimate sources which are now closed off from potential competitors; hundreds of years of cannabis use provide for compelling evidence of safety. There is no reporteddeath from cannabis use. Indeed, the therapeutic index for cannabis (the ratio between a normaland lethal dose) is estimated to be 40,000 to 1. The equivalent ratio for aspirin is 23 to 1 and formorphine is 50 to 1; the medical literature contains a wealth of evidence pertaining to the potential therapeutic benefitof cannabis. It is very rare at this stage of product development for there to be such a wealth ofevidence of efficacy, and in Bridgehead's opinion this evidence reduces the risk of failure of GW'sproducts; the development of a number of medicines from a single plant species means that much of theearly pharmaceutical development work carried out by GW can be applied to a range of productopportunities, thereby avoiding the need to repeat significant amounts of work for each additionalproduct in the portfolio; clinical trials in man can commence at a very early stage in the development process – GW'sPhase II trials commenced just 20 months after its crop was planted. In addition, such trials canproceed rapidly to large scale Phase III trials; faster development timescales mean that the overall costs of development are significantlyreduced; and GW's approach gives consistency of product allowed by GW's control of the whole productionprocess from optimal growth of chemovar clones with defined cannabinoid composition throughto harvesting, extraction, filling and finishing under GMP conditions at the Group's own facility.
Clinical merits앫 GW's products for multiple sclerosis and cancer are at a very late stage in the pharmaceuticaldevelopment cycle (at the beginning of Phase III trials) meaning that the risk of failure for theproducts is reduced. There is a huge unmet need in the relief of neurological pain and in treatment of the indicationstargeted by GW. Particularly in the field of multiple sclerosis there is a significant patient demandfor cannabinoid therapy. GW has received communications from over 3000 patients interested inparticipating in its clinical trials, with a large proportion of these now using cannabis to assist withtheir medical conditions.
The initial indications being explored in Phase III studies are those on which there is the greatestamount of anecdotal data supporting efficacy of cannabinoids.
Few products at this stage of development have the volume of data comprising anecdotal reportsof efficacy and indications of safety of the active ingredients as the cannabinoids. This mustsignificantly reduce the risk of failure of the programme compared with a new chemical entity.
The choice of cancer pain as an initial indication is logical given the time it will take to completecarcinogenicity on CBD. The duration of treatment is relatively short and for treatment of patients,with an advanced or terminal cancer, carcinogenicity studies are not normally required.
The inclusion of a high THC treatment in the Phase III studies of multiple sclerosis opens a route toan early marketing approval without limitation to dosing duration which would be applied in thecase of a CBD containing product, prior to successful completion of a carcinogenicity study.
Regulatory merits Unusually GW has a regulatory strategy which has been endorsed by the MCA in the UK at an earlystage.
GW is able to deliver a legitimate supply of pharmaceutical grade material under licence.
GW has a portfolio of recently filed patent cases and proposes to file more, providing a level ofprotection for the Group's proposed products. GW appreciates the importance of and is keen toprotect its intellectual property, aiming to build a matrix of intellectual property rights.
Timescales between submission and likely approval are shorter than is usual for normal drugdevelopment.
Commercial merits앫 GW has brought together a team of people particularly skilled in the area of plant medicines andtherapeutic cannabinoids.
GW aims to provide products with unique and advantageous features. The Group hasconsiderable "know how", not available elsewhere, which will receive statutory protection in thishighly regulated field.
Bridgehead Technologies Ltd considers that the Group however will face certain risks in the realisation ofits business plan. These are outlined below: Technology risks앫 Many assumptions of efficacy are based on a large volume of anecdotal reports from patients.
Results of clinical trials will be needed for confirmation of efficacy.
There is the potential for other companies to develop alternative delivery technologies and GW'sdelivery systems may not provide what is required for effective delivery of the Group'splant-based products.
Potentially GW could fail to produce enough material to the required quality level to supply theneed of the market. Bridgehead considers however, that this is unlikely given the manufacturingand production facilities which are already in place and envisaged.
The development of a monoculture, such as GW's Cannabis sativa clones, leaves the Group opento the risk of loss of a complete crop. However, GW's crop can be regrown in 13 weeks and GW isfurther mitigating against this risk by planning separate cultivation sites.
Clinical risks앫 There is the potential for Phase III clinical trials not to proceed as well as expected, deliveringpoorer efficacies, poorer side effect profile, for example highlighting problems of dependency orcarcinogenicity in chronic controlled self-titration dosage. In mitigation there is a large amount ofhistorical and anecdotal evidence which would give the expectation that the risk is less for theCBME than for a NCE.
Taste and the psychoactive effects of treatment make it very difficult to complete truly doubleblind studies. In the initial Phase III studies at least, independent observers are being used to makeevaluations, which is a sensible approach. However these difficulties in establishing trulyrandomised and blinded clinical studies may cause delays to market authorisation in somecountries.
Poor results from the carcinogenicity study on CBD could limit the use of this product. However,pre-clinical studies carried out by GW on CBD to date have not provided any concerns.
Furthermore, the long history of use of cannabis provides much reassurance that the CBDcarcinogenicity study will not produce poor results. However, this must remain a risk until thestudy is complete.
Efficacy varies with indication and patient with resultant difficulty in determining the optimumdose for efficacy without side effects or observation of a "cannabis high". This variability in patientresponse will mean that it will be difficult to prepare a label with a concise, simple to follow dosingregimen.
The cognitive effects of cannabinoids will mean that GW's product could affect patients' ability todrive with a consequent effect on the potential market for cannabis-based products.
Wider discussion with the regulatory authorities may reveal the need for studies of potential druginteractions and in special populations which are not currently included within GW's plans.
Regulatory risks앫 Whilst CBME of defined cannabis composition is likely to be accepted as a "medicine" in the UK,the climate for acceptance in other countries, particularly the USA, may not be as positive.
However, in 2000 the FDA issued draft botanical drug guidelines which are proving to be useful indetermining GW's regulatory strategy in the US.
Commercial risks앫 There is considerable prior art which will either make it difficult or impossible to gain broad patentclaims for GW's products. However implementation of the policy of building a matrix of rightsshould help to overcome this difficulty.
There is some and apparently increasing competition in the cannabinoid field, with GW believingthat it has a lead time over such competition. There is third party competition in the filing of patentapplications and such companies could develop equally, or more, effective non-infringingproducts and means of administration.
In conclusion Bridgehead considers that GW has significant expertise in the field of cannabis-basedpharmaceuticals and has put in place manufacturing, regulatory, commercial and importantly clinicalstrategies and programmes to allow maximum exploitation of the potential of the Group's products.
For and on behalf of Bridgehead Technologies Ltd.
Accountants' Report on GW Pharmaceuticals plc
The DirectorsGW Pharmaceuticals plcPorton Down Science ParkSalisburyWiltshire SP4 0JQ The DirectorsCollins Stewart Limited9th Floor88 Wood StreetLondon EC2V 7QR GW Pharmaceuticals plc
We report on the financial information on GW Pharmaceuticals plc set out below. This financial informationhas been prepared for inclusion in the AIM Admission Document dated 21 June 2001 of GWPharmaceuticals plc ("the AIM Admission Document").
Basis of preparation
The financial information set out below, which has been prepared in accordance with applicable UnitedKingdom generally accepted accounting principles, is based on the audited non-statutory financialstatements of GW Pharmaceuticals plc for the period from incorporation on 15 February 2001 to 31 March2001 ("the financial statements"), to which no adjustments were considered necessary.
The financial statements are the responsibility of the Directors of GW Pharmaceuticals plc who approvedtheir issue.
The Directors of GW Pharmaceuticals plc are responsible for the contents of the AIM AdmissionDocument in which this report is included.
It is our responsibility to compile the financial information set out in our report from the financialstatements, to form an opinion on the financial information and to report our opinion to you.
Basis of opinion
We conducted our work in accordance with the Statements of Investment Circular Reporting Standardsissued in the United Kingdom by the Auditing Practices Board. Our work included an assessment ofevidence relevant to the amounts and disclosures in the financial information. The evidence included thatpreviously obtained by us relating to the audit of the financial statements underlying the financialinformation.
We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance that thefinancial information is free from material misstatement whether caused by fraud or other irregularity orerror.
In our opinion, the financial information gives, for the purposes of the AIM Admission Document, a trueand fair view of the state of affairs of GW Pharmaceuticals plc as at 31 March 2001.
We consent to the inclusion of this report in the AIM Admission Document and accept responsibility forthis report for the purposes of paragraph 45(8)(b) of Schedule 1 to the Public Offers of SecuritiesRegulations 1995.
Debtors – amounts unpaid on share capital Net assets
Capital and reserves
Called up share capital
Equity shareholders' funds
The accompanying notes are an integral part of this balance sheet.
A summary of the principal accounting policies, all of which have been applied consistently throughout theperiod and the preceding periods, is set out below.
Basis of accounting
The accounts have been prepared under the historical cost convention and in accordance withapplicable UK accounting standards.
100,000,000 ordinary shares 0.1p each Allotted, called-up and fully paid 2 ordinary shares at 0.1 p each The company was incorporated on 15 February 2001 as Mawlaw 541 plc and on 6 March 2001 changed itsname to GW Pharmaceuticals Group plc. On 1 June 2001 its name was changed to GW Pharmaceuticalsplc. It has not traded and no dividends have been declared or paid. Accordingly no profit and loss account ispresented.
During May 2001, the company purchased the entire shareholding of GW Pharma Limited and theconsideration was settled by way of a share for share exchange.
During June 2001, the company issued warrants over 195,750 ordinary shares each at a strike price of£1.03 per ordinary share to Lord Weinstock and Atlantic and General Investment Trust Limited, asubsidiary of RIT Capital Partners plc.
Arthur AndersenChartered Accountants Accountants' Report on GW Pharma Limited
The DirectorsGW Pharmaceuticals plcPorton Down Science ParkSalisburyWiltshire SP4 0JQ The DirectorsCollins Stewart Limited9th Floor88 Wood StreetLondon EC2V 7QR GW Pharma Limited ("GW Pharma")
We report on the financial information on the GW Pharma Group (as defined under Basis of preparationbelow) set out below. This financial information has been prepared for inclusion in the AIM AdmissionDocument dated 21 June 2001 of GW Pharmaceuticals plc ("the AIM Admission Document").
Basis of preparation
The financial information set out below, which has been prepared on the basis set out under Basis ofcompilation below and in accordance with applicable United Kingdom generally accepted accountingprinciples, is based on the audited financial statements of GW Pharma for the period from 25 February1999 to 30 September 1999, the year ended 30 September 2000 and the 6 months ended 31 March 2001,of Guernsey Pharmaceuticals Limited for the period from 19 June 1998 to 30 September 1999, the yearended 30 September 2000 and the 6 months ended 31 March 2001, and of G-Pharm Limited from1 October 1998 to 30 September 1999, year ended 30 September 2000, and the 6 months ended 31March 2001 (together "the financial statements"), after making such adjustments as we considerednecessary.
The financial statements are the responsibility of the directors who approved their issue.
The Directors of GW Pharmaceuticals plc are responsible for the contents of the AIM AdmissionDocument in which this report is included.
It is our responsibility to compile the financial information set out in our report from the financialstatements, to form an opinion on the financial information and to report our opinion to you.
Basis of opinion
We conducted our work in accordance with the Statements of Investment Circular Reporting Standardsissued in the United Kingdom by the Auditing Practices Board. Our work included an assessment ofevidence relevant to the amounts and disclosures in the financial information. The evidence included that recorded by the auditors who audited the financial statements underlying the financial information. It alsoincluded an assessment of significant estimates and judgements made by those responsible for thepreparation of the financial statements underlying the financial information and whether the accountingpolicies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.
We planned and performed our work so as to obtain all the information and explanations which weconsidered necessary in order to provide us with sufficient evidence to give reasonable assurance that thefinancial information is free from material misstatement whether caused by fraud or other irregularity orerror.
In our opinion, the financial information gives, for the purposes of the AIM Admission Document, a trueand fair view of the state of affairs of the GW Pharma Group as at the dates stated and of its losses andcash flows for the periods then ended.
We consent to the inclusion of this report in the AIM Admission Document and accept responsibility forthis report for the purposes of paragraph 45(1)(b)(iii) and 45(10)(b) of Schedule 1 to the Public Offers ofSecurities Regulations 1995.
A summary of the principal accounting policies, all of which have been applied consistently throughout theperiod covered by this report, is set out below.
Basis of accounting
The financial information has been prepared under the historical cost convention and in accordancewith applicable UK accounting standards.
Basis of compilation
Subsequent to the period end, G-Pharm Limited's entire shareholding was purchased by GWPharma.
Given that all three companies were under common management throughout the period coveredby this report, the financial information has been prepared by combining the information in theaccounts of the three companies applying merger accounting principles as if they had been in agroup relationship throughout the period. In this report, we refer to GW Pharma, GuernseyPharmaceuticals Limited and G-Pharm Limited together as the "the GW Pharma Group".
Tangible fixed assets
Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment.
Depreciation is provided on all tangible fixed assets to write off the cost less estimated residual valueof each asset on a straight line basis over its expected useful life, at the following annual rates: Laboratory equipment Office fixtures and equipment Plant and machinery Finance and operating leases
Assets held under finance leases and other similar contracts, which confer rights and obligationssimilar to those attached to owned assets, are capitalised as tangible fixed assets and aredepreciated over the shorter of the lease terms and their useful lives. The capital elements of futurelease obligations are recorded as liabilities, while the interest elements are charged to the profit andloss account over the period of the leases to produce a constant rate of charge on the balance ofcapital repayments outstanding.
Rentals under operating leases are charged on a straight-line basis over the lease term, even if thepayments are not made on such a basis.
Tax deferred or accelerated is accounted for, using the liability method, in respect of all materialtiming differences to the extent that it is probable that a liability or asset will crystallise.
Pension scheme arrangements
Contributions to employee personal pension schemes are charged to the profit and loss account inthe period in which they become payable.
Investment in research and development
Expenditure on research and development is charged to the profit and loss account in the period inwhich it is incurred.
Foreign currency transactions
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date arereported at the rates of exchange prevailing at that date. Any gains or losses arising during the periodare included in the profit and loss accounts.
Grants of a revenue nature are credited to the Profit and Loss Account in the period to which theyrelate. Any amounts receivable are included under accrued income.
Turnover represents amounts receivable for services provided in the normal course of business, netof VAT and other sales related taxes.
Combined profit and loss account
30 September 30 September Other income
Loss for the year before taxation
Retained loss for the period
Loss per share – basic There are no recognised gains or losses in any period other than those included in the profit and lossaccount. No dividends were declared or paid in any period.
All results derive from continuing operations.
The accompanying notes are an integral part of this combined profit and loss account.
Combined balance sheet
30 September 30 September Fixed assets
Tangible assets
Cash at bank and in hand Creditors: Amounts falling due
within one year
Net current assets
Creditors: Finance lease creditors falling
due in more than one year
Provisions for liabilities and charges
Net assets
Capital and reserves
Called up share capital
Share premium account Profit and loss account Equity shareholders' funds
The accompanying notes are an integral part of this combined balance sheet.
Combined cash flow statement
30 September 30 September Net cash outflow from operating activities
Returns on investments and servicing of Capital expenditure and financial investments Cash outflow before financing Management of liquid resources Increase in cash in the period The accompanying notes are an integral part of this combined cash flow statement.
Notes to the financial information
30 September 30 September Research and development costs Administration costs Loss on ordinary activities before taxation
Loss on ordinary activities before taxation is stated after charging: 30 September 30 September Depreciation– owned – under finance leases Auditors' remuneration– audit services – other services 30 September 30 September Fees to third parties Money purchase contributions Fees to third parties comprise amounts paid to GWG Limited under an agreement to provide the groupwith the services of Dr Geoffrey Guy.
1999 30 September Highest paid directorEmoluments Fees to third parties Money purchase contributions Aggregate emoluments disclosed above do not include any amounts for the value of options to acquireordinary shares in the company granted to or held by the directors. Details of the options are as follows: Jonathan Laughton Staff costs
The aggregate payroll costs were as follows: 30 September 30 September Wages and salaries Social security costs Other pension costs The average monthly number of employees, including directors was: 30 September 30 September Management and administration Research and development Loss per share
The calculations of loss per share are based on the following losses and numbers of shares.
30 September 30 September Loss for the financial period Weighted average number of shares Tangible fixed assets
As at 30 September 1999 As at 30 September 1999 Net book value
As at 30 September 1999
Cost
As at 1 October 1999
As at 30 September 2000 Depreciation
As at 1 October 1999
As at 30 September 2000 Net book value
As at 30 September 2000
Cost
As at 1 October 2000
As at 31 March 2001 Depreciation
As at 1 October 2000
As at 31 March 2001 Net book value
As at 30 September 1999
As at 30 September 2000 As at 31 March 2001 30 September 30 September The net book value of assets held under finance leases Debtors: Amounts due within one year
30 September 30 September Prepayments and accrued income Creditors: Amounts falling due within one year
30 September 30 September Obligations under finance leases Other taxation and social security costs Accruals and deferred income Provisions for liabilities and charges
30 September 30 September Provision for national insurance on share options 10. Share capital
30 September 30 September Authorised100,000,000 ordinary shares at 0.1p each, (1999:1,000,000 shares at 10p each, 2000: 100,000,000shares at 0.1p each) Allotted, called-up and fully paid2,388,685 ordinary shares at 0.1 p each (1999: 16,109ordinary shares at 10p each, 2000: 1,984,200 ordinaryshares at 0.1p each) During the year ended 30 September 2000, 3,733 ordinary shares of 10p each were issued. Theconsideration in relation to this was £3,522,083. On 12 July 2000, the company's share capital wassub-divided into 100 0.1p shares for every 10p share in issue During the six months ended 31 March 2001 the company issued 404,485 ordinary shares with a nominalvalue of 0.1p and at a premium of £17.50 for cash.
GW Pharmaceuticals Employee Share Schemes
Approved Company Share Option Scheme
Executive Share Option Scheme
Unapproved Share Option Scheme
All the above options may not be exercised any time prior to the third anniversary of the date of the grantand lapse on the tenth anniversary of the date of the grant.
Peter Mountford is the registered holder of a warrant to subscribe for 24,285 shares of £0.001 each inGW Pharma Limited. Details of the warrant are summarised below: 11. Reserves
Retained loss for the year At 1 October 1999 Retained loss for the year At 1 October 2000 Retained loss for the year 12. Reconciliation of operating loss to operating cash flows
30 September 30 September (Increase)/decrease in debtors Increase in creditors Increase in provisions Net cash outflow from operating activities 13. Analysis of cash flows
30 September 30 September Returns on investments and servicing of finance
Interest received
Capital expenditure and financial investment
Purchase of tangible fixed assets
Financing
Issue of ordinary share capital
14. Reconciliation of net cash flow to movement in net funds
30 September 30 September Increase in cash in the period Cash outflow from decrease in lease financing Cash inflow from change in liquid resources Change in net cash resulting from cash flows New finance leases Movement in net funds Net cash brought forward Net funds carried forward 15. Related party transactions
Brian Whittle Associates Limited The company is wholly owned by Brian Whittle. GW Pharma Limited has purchased services to the valueof approximately £70,000 (excluding director's remuneration) from this company during the period from25 February 1999 to 31 March 2001.
16. Subsequent events
On 3 April 2001, 66,883,180 0.1p bonus shares were issued, being 28 new shares for every one held onthe register at that date.
During May 2001, the company purchased the entire share capital of G-Pharm Limited and settled theconsideration by way of 13,018,970 0.1p shares.
During May 2001, the company's entire shareholding was purchased by GW Pharmaceuticals plc and theconsideration was settled by way of a share for share exchange.
Market price risk
The company has been in a pre-trading, start up phase throughout the period to 31 March 2001. There hasbeen no significant exposure towards either interest rate or currency risks. The company is instituting apolicy to manage these risks.
Arthur AndersenChartered Accountants PART VIII
The Directors of the Company, whose names appear on page 7 of this document, accept responsibility for theinformation contained in this document including individual and collective responsibility for compliance with the AIMRules. To the best of the knowledge and belief of the Directors (who have taken reasonable care to ensure that such isthe case) the information contained in this document is in accordance with the facts and does not omit anything likelyto affect the import of such information.
Incorporation and Registration
The Company was incorporated and registered as a public company limited by shares in England and Walesunder the Act with the name Mawlaw 541 plc on 15 February 2001. The name of the Company was changed toGW Pharmaceuticals Group plc on 6 March 2001 and was changed to GW Pharmaceuticals plc on 1 June 2001.
The Company operates under the Act. The liability of the members is limited.
The registered office and principal place of business of the Company is at Porton Down Science Park, Salisbury,Wiltshire SP4 0JQ. The registered number of the Company is 4160917.
The Company received a certificate under section 117 of the Act on 1 June 2001 enabling the Company to dobusiness and exercise its borrowing powers.
The Company was incorporated with an authorised share capital of £100,000 divided into 100,000,000 ordinaryshares of 0.1p each of which two were issued as subscriber shares to the two subscribers to the Memorandumof Association.
the authorised share capital of the Company was increased to £150,000 divided into 150,000,000Ordinary Shares; the Directors were unconditionally authorised for the purposes of Section 80(1) of the Act to allot up to£13,736.27 in nominal value of Ordinary Shares pursuant to the Placing, such authority to expire on31 December 2001 and the Directors were generally and unconditionally authorised for the purposes ofSection 80(1) of the Act to exercise all the powers of the Company to allot relevant securities (within themeaning of Section 80(2) of the Act) up to a maximum aggregate nominal amount of £53,295.45, suchauthority to expire on 20 June 2006 save that the Company may, before such expiry, make an offer oragreement which would or might require relevant securities to be allotted after such expiry and theDirectors may allot relevant securities pursuant to any such offer or agreement as if such authority hadnot expired; the Directors were empowered under Section 95 of the Act to exercise the powers of the Company toallot equity securities (as defined in Section 94(2) of the Act) of the Company for cash pursuant to theauthority referred to in paragraph (b) above as if Section 89(1) of the Act did not apply to the allotment,such authority expiring on 20 June 2006 in connection with: the allotment pursuant to the Placing of 13,736,264 new Ordinary Shares to persons nominated byCollins Stewart and approved by the Company; the allotment pursuant to the share option schemes of the Company; the allotment to existing members by way of rights or open offer; and the allotment of equity securities of an aggregate nominal value of up to £4,801.35.
On 31 May 2001, 82,290,835 Ordinary Shares were issued to former shareholders of GW Pharma inconsideration for the transfer by them to the Company of the entire issued share capital of GW Pharma.
On 20 June 2001, 13,736,264 new Ordinary Shares were provisionally allotted for subscription pursuant to thePlacing Agreement, conditionally upon Admission.
Following the Placing, 96,027,099 Ordinary Shares will be in issue and 53,972,901 Ordinary Shares will remainunissued representing approximately 36.0 per cent. of the total authorised share capital of the Company andapproximately 56.2 per cent. of the total issued share capital.
Save as disclosed in this document there is no share capital of the Company or any of its subsidiaries which isunder option or agreed conditionally or unconditionally to be put under option at the date hereof.
The Group
Details of the Company's subsidiary undertakings are as follows: Incorporation Date of Incorporation Issued share capital GW Pharma Limited 82,290,835 ordinary shares of 0.1p each 28 September 1995 Plant Cultivation 130,852 ordinary shares 24 April 1998Pharmaceutical 1,329 ordinary shares Pharmaceuticals Limited GWP Trustee Company 1 ordinary share of £1 company for the AllEmployee Scheme 1 ordinary share of £1 Directors' and other interests
As at 20 June 2001 (the latest practicable business day prior to the date of this document) the interests (exceptas shown below, all of which are beneficial) of the Directors and their immediate families in the existing sharecapital of the Company which have been notified to the Company pursuant to Section 324 or 328 of the Act orwhich are required to be entered into the Register maintained under the provisions of Section 325 of the Act and(so far as is known to the Directors, having made appropriate enquiries) persons connected with them (whichexpression shall be construed in accordance with Section 346 of the Act) are as follows: Peter Mountford also holds warrants to subscribe for 269,265 Ordinary Shares. The warrants are in three tranches of51,765, 108,750 and 108,750 respectively and are exerciseable at £0.60, £1.03 and £1.88 respectively during the periodto 14 January 2006, 2008 and 2011 respectively.
David Mace's holding includes 87,000 Ordinary Shares held by his wife.
Peter Mountford's holding includes 165,735 Ordinary Shares held by his wife.
Brian Whittle's holding includes 207,942 held by his pension trust.
In addition, the Directors hold the following number of options: Exercise price (£) Jonathan Laughton Immediately following the Placing (assuming all of the Placing Shares are subscribed) the interests (except asshown below, all of which are beneficial) of the Directors, their immediate families and connected persons in theshare capital of the Company as appearing in the Register maintained under the provisions of Section 324 of theAct will be as follows: percentage of issued ordinary share capital * Peter Mountford also holds warrants to subscribe for 269,265 Ordinary Shares. The warrants are in three tranches of 51,765, 108,750 and 108,750 respectively and are exercisable at £0.60, £1.03 and £1.88 respectively during the period to 14 January2006, 2008 and 2011 respectively.
In addition to the shareholdings detailed above, the Directors are aware of the following persons who willdirectly or indirectly be interested in 3 per cent. or more of the issued share capital of the Company as enlargedimmediately following the Placing.
The Directors are not aware of any person who will directly or indirectly be interested in 3 per cent. or more of theissued share capital of the Company as enlarged immediately following the Placing.
Save as disclosed in this document: no Director has any interests in the issued share capital of the Company and no Director will acquireshares in the Company pursuant to the Placing; the Directors are not aware of any person interested in 3 per cent. or more of the issued share capital ofthe Company; no contract or arrangement with the Company or any of its subsidiaries subsists or has subsisted withinthe period of 2 years immediately preceding the date hereof in which any Director is or was materiallyinterested and which is significant in relation to the business of the Company and its subsidiaries takenas a whole; no Director has had any interest, direct or indirect, in any assets which within the period of 2 yearsimmediately preceding the date hereof has been or which is proposed to be acquired, disposed of by orleased to the Company or any of its subsidiaries; and no amount or benefit has been paid or given by the Company within 2 years before the date hereof to anypromoter nor is any such payment or gift intended.
The Directors have held the following directorships within the five years prior to the date of this document: GW Pharmaceuticals plc GW Pharmaceuticals plc Amarin Corporation PlcLotus Healthcare CorporationOxford Health Management Limited1Medi-Ject Inc.
Phytopharm Plc 1 Now in liquidation GW Pharmaceuticals plc Marwell Preservation Trust Limited Aquapark Investments Limited* D C M Ventures Limited Real Live Leisure Holdings Limited GW Pharmaceuticals plc Landgrove Hardwoods LimitedChampion Catch Limited * Now dissolvedP Mountford Bradmount Holdings Limited Earlyweigh Limited Comprehensive Business Services Plc Layton Blackham Group Limited Crystalware LimitedGW Pharmaceuticals plcHoneycombe Leisure PlcHTB Holdings LimitedInternet Direct PlcTSS&P Limited Brian Whittle Associates Limited GW Pharmaceuticals plcNutraceuticals Limited A resolution to wind-up Oxford Health Management Limited pursuant to a creditors' voluntary liquidationarrangement was passed on 12 January 2001. Geoffrey Guy resigned as a director of that company on 21 June2000. Dr Guy originally held this non-executive directorship as a nominee of Ethical Holdings and did not receiveany directors fees from that company. Dr Guy had no knowledge of the trading position of the company fromJune 2000 onwards and has not been contacted by the liquidator to date.
Save as disclosed, none of the Directors has: any unspent convictions in relation to indictable offences; had any bankruptcy order made against him or entered into any voluntary arrangements; been a director of a company which has been placed in receivership, liquidation, administration, beensubject to a voluntary arrangement or any composition or arrangement with its creditors generally or anyclass of its creditors whilst he was a director of that company or within the 12 months after he ceased tobe a director of that company; been a partner in any partnership which has been placed in liquidation, administration or been thesubject of a voluntary arrangement whilst he was a partner in that partnership or within the 12 monthsafter he ceased to be a partner in that partnership; been the owner of any asset or a partner in any partnership which has been placed in receivership whilsthe was a partner in that partnership or within the 12 months after he ceased to be a partner in thatpartnership; been publicly criticised by any statutory or regulatory authority (including recognised professionalbodies); or been disqualified by a court from acting as a director of a company or from acting in the management orconduct of the affairs of any company.
5.8For the year ended 30 September 2000 the aggregate remuneration paid and benefits in kind granted to the Directors of the Company was approximately £232,000. Under arrangements now in force the Directors'aggregate remuneration and benefits in kind for the year ending 30 September 2001 are estimated to beapproximately £370,000.
Memorandum and Articles of Association
The Memorandum of Association of the Company provides that the Company's principal object is to carry on thebusiness of a holding and investment Company. The objects of the Company are set out in full in Clause 4 of theMemorandum of Association, a copy of which is available for inspection at the Company's registered office.
The Articles of Association of the Company contain provisions, inter alia, to the following effect: Subject to disenfranchisement of a member in the event of non-payment of calls or other sums due andpayable in respect of any shares, or in the event of non-compliance with a statutory notice servedpursuant to Section 212 of the Act requiring disclosure as to beneficial ownership in shares, everymember present in person or by proxy or a corporation represented by a duly authorised representative(not being himself a member) has one vote on a show of hands. On a poll every member present or byproxy or in corporation represented as aforesaid has one vote for each share of which he is the holder.
Variation of rights The rights attached to any class of shares may (unless otherwise provided by the terms of issue of theshares of that class) be varied or abrogated with the consent in writing of the holders of three-fourths innominal amount of the issued shares of that class or with the sanction of an extraordinary resolutionpassed at a separate general meeting of the holders of the shares of that class.
Alteration of Capital The Company may by ordinary resolution increase its share capital, consolidate all or any of its sharecapital into shares of larger amount, and cancel any shares not taken up or not agreed to be taken up and,subject to the provisions of the Act, sub-divide its existing shares or any of them into shares of smalleramounts. Subject to the provisions of the Act, the Company may by special resolution reduce its sharecapital, any capital redemption reserve fund and any share premium account and may redeem orpurchase any of its own shares.
Transfer of Shares All shares in the Company are in registered form and may be transferred by a transfer in any usual form orin any manner acceptable to the Directors and permitted by the London Stock Exchange. The Directorsmay decline to register a transfer of a share which is: not fully paid or on which the Company has a lien provided that, where any such share is listed onthe London Stock Exchange, or the Official List, such discretion may not be exercised in such away as to prevent dealings in shares of that class from taking place on an open and proper basis; or not lodged duly stamped at the registered office of the Company; or not accompanied by the share certificate and other documents reasonably required by theDirectors to show the right of the transferor to make the transfer; or in respect of more than one class of share; or in the case of a transfer to joint holders of a share, a transfer to more than four joint holders.
Dividends and other distributions Subject to the Act and every other statute from time to time in force concerning companies andaffecting the Company (together the "Statutes"), the Company may by ordinary resolution declaredividends in accordance with the respective rights of members but no dividend shall exceed the amountrecommended by the Directors. If, in the opinion of the Directors, the profits of the Company availablefor distribution justify such payments, the Directors may pay fixed dividends payable on any shares ofthe Company with preferential rights, half-yearly or otherwise, on fixed dates and from time to time payinterim dividends to the holders of any class of shares provided that no preferential dividend is in arrearsat that time. Subject to any special rights attaching to or terms of issue of any shares, all dividends shallbe declared and paid according to the amounts paid up on the shares on which the dividend is paid.
The Company may, upon the recommendation of the Directors, by ordinary resolution, direct paymentof a dividend wholly or partly by the distribution of specific assets.
The Directors may deduct from any dividend all sums owed by a shareholder to the Company whetheron account of any call, lien, debt otherwise.
All dividends unclaimed may be invested or otherwise used at the Directors' discretion for the benefit ofthe Company until claimed and all dividends unclaimed after a period of 12 years from the date whensuch dividend became due for payment shall be forfeited and shall revert to the Company.
The Directors may, with the prior approval by ordinary resolution of the Company, offer shareholders inrespect of any dividend the right to elect to receive ordinary shares by way of scrip dividend instead ofcash.
The Company may cease to send any cheque or warrant through the post or may stop the transfer of anysum by any bank or other funds transfer system for any dividend payable if in respect of at least twoconsecutive dividends the cheques or warrants have been returned undelivered or remain uncashed orthe transfer has failed or in respect of one dividend the cheques or warrants have been returnedundelivered or remain uncashed or the transfer has failed and reasonable enquiries made by theCompany have failed to establish any new address of the holder.
The Company or the Directors may specify a "record date" on which persons registered as the holdersof shares shall be entitled to receipt of any dividend.
Distribution of assets on a winding up On a winding up the liquidator may with the sanction of an extraordinary resolution of the Company andany other sanction required by the Act divide among the Company's members in specie or in kind thewhole or any part of the assets of the Company and may for such purpose set such value as he deemsfair upon any one or more class or classes of property and may determine how such division shall becarried out as between the members or different classes of members. The liquidator may, with the likesanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of themembers as he with the like authority determines, and the liquidation of the Company may be closedand the Company dissolved, but so that no members shall be compelled to accept any shares or otherproperty in respect of which there is a liability.
Pre-emption Rights The Company may at any time and from time to time by special resolution authorise the Directors to allota specified amount of equity securities (as defined in Section 94 of the Act) wholly for cash as if Section89(1) of the Act did not apply to any such allotment provided that this power shall be limited to: the allotment of equity securities in connection with a rights issue being an offer of equitysecurities open for a fixed period to holders of equity securities in proportion to their respectiveholdings of such securities or in accordance with the rights attached to such securities; and the allotment (otherwise than pursuant to sub-paragraph (1) above) of equity securities having, inthe case of relevant shares (as defined in Section 94 of the Act), a nominal amount or, in the case ofother equity securities, giving the right to subscribe for or convert into relevant shares having anominal amount, not exceeding in aggregate the sum specified in the special resolution; and such power shall be exercisable for such period (not exceeding five years) as the power may begranted or renewed by special resolution but the Directors may during such period make offers oragreements which would or might require equity securities to be allotted after the expiry of such periodand the Directors may allot equity securities pursuant to the offer or agreement as if such power had notexpired.
Save as provided below, the Company may not allot any of the authorised but unissued Ordinary Sharesof the Company, not subject to the power referred to above unless the shares are to be allotted wholly orpartly paid up otherwise than in cash or unless the Company has followed the procedure laid down bysection 89(1) of the Act. This procedure is broadly as follows: Before agreeing to allot any Ordinary Shares to persons who are not existing shareholders, theCompany must previously make an offer in writing to each existing holder of Ordinary Shares to allot tohim on the same or more favourable terms such proportion of the shares to be all allotted as is pro rata tohis existing holding. The offer must be sent to his registered address in the United Kingdom or to theaddress in the United Kingdom supplied by him to the Company for the giving of notice to him. The offermust state the period of not less than 21 days during which the offer may be accepted; and the offer shallnot be withdrawn before the end of that period. Only after the period during which the offer may beaccepted has expired or after the Company has received notice of the acceptance or refusal of everyoffer so made, may it allot the shares which are the subject of the offer to a person other than theofferee.
Save as pursuant to the provisions of the Act as set out above, no other pre-emption rights are containedin the Articles of Association of the Company regarding the issue and allotment of shares in respect ofauthorised share capital or to the transfer of shares.
The Directors may exercise all the powers of the Company to borrow money and to mortgage or chargeits undertaking, property and uncalled capital or any part or parts thereof and to issue debentures andother securities whether outright or as collateral security for any debt, liability or obligations of theCompany or of any third party. The Directors are to restrict the borrowings of the Company, and exerciseall voting and other rights or powers of control exerciseable by the Company in relation to itsSubsidiaries, so as to secure that the aggregate principal amount outstanding of all moneys borrowed bythe Group (exclusive of money borrowed by and between the Company and/or the Subsidiaries) shouldnot, without previous sanction of an ordinary resolution of the Company, exceed an amount equal tothree times the Adjusted Share Capital and Reserves.
The Articles allow the Directors, without having to seek permission from Shareholders, to resolve thatany class of shares in the Company may be issued in uncertificated form and transferred by means ofany computer-based system permitted by relevant statutes and the London Stock Exchange whichenables title to shares to be transferred without written instrument of transfer and, in addition, toimplement such arrangements as the Directors consider fit in accordance with and subject to therelevant statutes and the rules of the London Stock Exchange to evidence and regulate transfer of title toshares in the Company and to approve (or disapprove as the case may be) the registration of suchtransfers. In any event, the Company will still be obliged to issue share certificates to thoseShareholders who request them. These provisions are to enable the holding of the Company'ssecurities by electronic means so as to permit their transfer and settlement on the CREST system.
Employee Share Schemes
The Company has adopted two employee share option schemes, the Approved Scheme and the ExecutiveScheme, for the grant of options over Ordinary Shares.
GW Pharma adopted similar schemes (the GW Pharma Approved Scheme and the GW Pharma ExecutiveScheme) for the grant of options over its shares prior to its acquisition by the Company. Options over GWPharma shares have now been replaced with equivalent rights over Ordinary Shares, and GW Pharma will notgrant any further options under those schemes.
GW Pharma also adopted the All Employee Scheme, which is an all-employee share ownership plan approvedunder schedule 8 to the Finance Act 2000, for the grant of rights over its shares. Shares awarded to participantsunder this scheme were replaced by Ordinary Shares as a result of the acquisition of GW Pharma by theCompany. It is intended that the Scheme be amended so that future awards can be made over Ordinary Shares.
Additionally certain options have been granted to certain consultants of the Group and Non-Executive Directorsof the Company under arrangements outside these schemes.
Summary of principal features of the Approved Scheme
The Approved Scheme was approved by the shareholders and adopted on 31 May 2001. The approval of theInland Revenue pursuant to schedule 9 to the Income and Corporation Taxes Act 1988 has been applied for. Itprovides for eligible employees and directors to be granted options to acquire Ordinary Shares at the discretionof the Remuneration Committee of the Board.
Directors who work at least 25 hours a week and employees of the Group will be eligible. Participation is at thediscretion of the Remuneration Committee.
Individual Limit on Participation Options cannot be granted where to do so would cause the aggregate market value at the date of grant of shareswhich can be acquired under the Approved Scheme by any individual to exceed £30,000.
Options cannot be granted until the Approved Scheme has been approved by the Inland Revenue. Options maythereafter only be granted within 42 days of the date of such approval, or within 42 days of the announcement ofthe Company's yearly or half-yearly results, or on any day when the Remuneration Committee resolve thatexceptional circumstances exist which justify the grant of options. No options can be granted later than tenyears after the adoption of the scheme.
Performance Targets The Remuneration Committee may grant options on the basis that they will normally only be exercisable ifpre-set objective performance targets are met. Options may provide that performance targets may be waived orvaried at the discretion of the Remuneration Committee.
Subject to achievement of any performance targets, participants will be able to exercise their options andacquire shares at a price per share which will be fixed by the Remuneration Committee when the option isgranted. This exercise price may not be less than the greater of the market value of the Ordinary Shares on thedate of grant or their nominal value.
An option may not normally be exercised earlier than three years nor later than ten years after its grant.
Special provisions apply where there is a takeover, reconstruction or winding up of the Company. Theseprovisions may allow the earlier exercise of options, normally within 6 months.
If the Company is acquired by another company, option holders may, with the agreement of the acquiringcompany, release their options in consideration of the grant of new options over the shares of the acquiringcompany. The new options must be equivalent to the old options.
Options may not be exercised when the shares do not satisfy the conditions set out in schedule 9 to the Incomeand Corporation Taxes Act 1988.
Options will normally lapse if an option holder ceases to be an eligible employee or director or becomesbankrupt. Special provisions apply if an option holder retires or ceases to be eligible due to injury, ill health ordisability. These provisions allow the exercise of the options within the following six months. If an option holderdies his personal representatives may exercise the options within the following twelve months. TheRemuneration Committee has discretion to allow exercise after an employee ceases to be eligible for any otherreason.
Non transferability of options All options are non-transferable.
As at the date of grant of any options under the Approved Scheme the total number of shares which have beenplaced under option or warrant to incentivise employees, directors, consultants or officers of the Group, orotherwise issued to or for the benefit of such persons pursuant to non-option incentive arrangements during thepreceding ten years must not exceed 10 per cent. of the issued ordinary share capital of the Company at thatdate. Options granted or shares issued prior to Admission, and any options which have lapsed, beensurrendered or otherwise became unexerciseable (other than by reason of exercise), are not taken into accountfor these purposes.
Variations of share capital In the event of an increase or variation of the ordinary share capital of the Company, the RemunerationCommittee can make any adjustments considered appropriate to the number of shares subject to any option orthe price payable for shares under any option to preserve the position of the option holders. No adjustment willbe effective until approved by the Inland Revenue. No adjustment is allowed if it has the effect of making theexercise price less than the nominal value of the shares.
The Remuneration Committee may make any alterations to the Approved Scheme that are consideredappropriate provided that: (i) no such adjustment after the approval of the Scheme by the Inland Revenue shalltake effect until approved by the Inland Revenue and (ii) no increase in the limit on the number of Ordinary Shareswhich may be used may be made without the approval of the Company in general meeting.
Summary of principal features of the Executive Scheme
The Executive Scheme has two functions: (i) to grant options which qualify as enterprise managementincentives under the legislation introduced by the Government in the Finance Act 2000 ("EMI Options") and (ii)to grant options which do not benefit from any advantageous tax treatment ("Unapproved Options").
The Executive Scheme does not require Inland Revenue approval. It was approved by shareholders and adoptedon 31 May 2001.
Use of Executive Scheme Normally unapproved options under the Executive Scheme will be granted where the grant of an EMI Option oran option under the Approved Scheme is not appropriate (whether because the individual limits have beenreached or otherwise). EMI Options or options under the Approved Scheme will generally be granted first wherethis is possible as they have tax advantages for both the Company and the participants.
The general rules of the Executive Scheme relating to the grant of options are basically the same as theApproved Scheme, save that: the £30,000 limit on the value of shares which may be put under option to any one option holder does notapply; options may in exceptional circumstances be granted with an exercise price below the market value atthe date of grant, and may be calculated by reference to a procedure or formula determined at the timeof grant of the option; options may in exceptional circumstances be granted on the basis that they may be exercised earlierthan provided for in the Approved Scheme; and amendments to the Executive Scheme need not be approved by the Inland Revenue.
Certain other minor restrictions which apply to the Approved Scheme do not apply. The same overall limits onthe number of shares which may be used apply.
The Board may adopt sub-schemes under the Executive Scheme to enable options to be granted on atax-advantaged basis to employees tax resident outside the UK, subject to the same overall limit on the numberof shares which may be used.
The Remuneration Committee may designate an option to be an EMI Option where it reasonably expects thatthe relevant requirements for such options as set out in schedule 14 to the Finance Act 2000 to be met.
The following options have been granted under the Executive Scheme: The Remuneration Committee considers that it may be necessary to grant further options over Ordinary Shareswith an exercise price equal to the Placing Price for the purpose of recruiting key senior management, eventhough the market value of those shares may at the time be higher than the Placing Price. The potential grant ofsuch further options will be limited in number by reference to the Association of British Insurers' guidelines. Thecommittee considers this to amount to exceptional circumstances justifying the grant of options with anexercise price below the market value.
Summary of principal features of All Employee Scheme
The All Employee Scheme was approved by shareholders of GW Pharma on 12 July 2000, and the trust deedestablishing the scheme was executed on 16 August 2000. It was approved by the Inland Revenue underschedule 8 to the Finance Act 2000 on 26 September 2000.
The scheme originally allowed GW Pharma to distribute its shares free to employees, and/or to offer such sharesfor sale to employees in a tax efficient manner. It is intended that the Scheme be amended to provide thatOrdinary Shares are to be used rather than shares in GW Pharma for future awards.
Shares in GW Pharma originally awarded under the scheme have now been exchanged for Ordinary Shares.
The trustee of the scheme is GWP Trustee Company Limited, a subsidiary of GW Pharma.
Subject to certain exclusions all UK employees of GW Pharma and specified subsidiaries are allowed toparticipate. Employees who have (or have within the previous 12 months had) a material interest in the Companyor certain specified companies are excluded from participating. A material interest is broadly 25 per cent. controlof the relevant company.
The All Employee Scheme contains three elements and GW Pharma may decide which (if any) of theseelements to offer to employees. GW Pharma can distribute ‘free shares' to employees, eligible employees canbuy ‘partnership shares' out of their pre-tax earnings; and the company can distribute free ‘matching shares' toemployees in respect of partnership shares purchased.
GW Pharma may distribute free shares equally among employees, or may distribute them on the basis of salary,length of service, hours worked, individual performance or the performance of the Company or one or morebusiness units. Any performance targets must be set by reference to business results or objective criteria. Thereare two specified methods of awarding shares by reference to performance targets. Free shares must be heldfor a period of between 3 and 5 years from the date of award. During this period, participants are restricted in theway they may deal with their free shares. Under the All Employee Scheme, the market value of free shares thatcan be distributed to an employee in any tax year must not be over £3,000. Distribution of free shares must beeven-handed.
Partnership Shares Under the All Employee Scheme, GW Pharma may invite eligible employees to buy partnership shares up to thevalue of £1,500 (or 10 per cent. of his salary, if this is lower) in any tax year. The trustee acquires the partnershipshares and holds them in the trust for employees. The money needed to buy the shares is deducted from theemployee's gross salary. Deductions can be accumulated before being used to acquire the shares. Salarydeductions are limited to £125 per month. The minimum deduction is £10 per month.
Matching shares are extra free shares which are distributed to employees who buy partnership shares. Thehighest number of matching shares that can be distributed to an employee is two matching shares for every onepartnership share he has bought. Matching shares are of the same class and have the same rights as‘partnership shares'. Matching shares must be held for a period of between 3 and 5 years from the date ofaward. During the holding period employees are restricted in their dealings with the shares.
All free shares and matching shares which have been allocated to employees and any partnership shares boughtfor the employees are held in a specially established trust. Employees can withdraw partnership shares from thetrust at any time.
GW Pharma may make awards of shares on the basis that employees who leave within a period of up to threeyears of being allocated free or matching shares will lose those shares, except in certain circumstances, forexample, if they die or are made redundant.
The Company cannot issue more than 10 per cent. of its ordinary shares under the All Employee Scheme over aten year period. For the purpose of this limit, Ordinary Shares which may be or have been issued pursuant torights granted during that period under any of the Company's employees' share schemes (including sharesissued pursuant to the GW Pharma Option Schemes, and shares issued to the trustee as a consequence of theacquisition of GW Pharma by the Company) are also taken into account. It is intended that this limit be amendedto conform it to the limit in the Approved and Executive Schemes, and following such amendment any increasein the limit would require Shareholder approval.
Issue price – partnership shares Where there is only one deduction from employees' pay, the price at which partnership shares are issued will betheir market value on, or shortly before, the day on which they are issued.
Where there is more than one deduction from employees' pay, the price at which partnership shares are issuedwill be the lower of their market value on, or shortly before, the start and end of the accumulation periods overwhich the deductions are made. The accumulation period may be up to 12 months long.
Dividends on shares held by trustee Employees will be treated as the beneficial owners of shares held for them by the trustee. Dividends paid on theshares may either be used to buy extra shares for employees or be distributed to employees. Where shares areacquired using dividends, the value of shares acquired will be taken into account when determining the £1,500limit for partnership shares. Shares acquired using dividends must be held for 3 years.
GW Pharma (with the consent of the trustee) may change the rules and trust deed of the All Employee Schemeas they see fit. No change which adversely affects the rights attaching to shares in the plan is allowed. Certainchanges are not effective until approved by the Inland Revenue. Following the proposed amendment referred toin (h) above, no increase in the limit on the number of Ordinary Shares which may be used may be made withoutthe approval of the Company in general meeting.
Special rules apply if there is a reconstruction which for capital gains tax purposes results in shares being treatedas if they are not disposed.
If there is a rights issue, the employees may instruct the trust to sell shares to raise funds to participate in therights issue.
As a result of an award of free shares made on 2 October 2000 there are currently 158,079 Ordinary Shares heldon behalf of participants. The trust also has a further 764,121 unallocated Ordinary Shares available for use in theAll Employee Scheme.
GW Pharma Approved Scheme
The GW Pharma Approved Scheme was approved by the shareholders of GW Pharma on 12 July 2000 and wasadopted by that company on 16 August 2000. It was approved by the Inland Revenue pursuant to Schedule 9 ofthe Income and Corporation Taxes Act 1988 on 26 September 2000.
The scheme provided for eligible employees and directors of GW Pharma and its subsidiaries to be grantedapproved options to acquire shares in GW Pharma. Options granted under the scheme have been exchanged forequivalent options over Ordinary Shares. No further options over GW Pharma shares will be granted under thescheme.
The terms of options granted under the GW Pharma Approved Scheme are substantially the same as those ofthe Approved Scheme, save that they are over GW Pharma shares.
Option Exchange Offer Options granted under the scheme did not become exercisable following the acquisition of GW Pharma by theCompany, as the GW Pharma shares then ceased to satisfy the conditions set out in schedule 9 to the Incomeand Corporation Taxes Act 1988. The Company offered to grant an equivalent option over Ordinary Shares(governed by the same scheme) in exchange for option holders agreeing to cancel their options over GWPharma shares. The replacement options will be treated for the purposes of the scheme as having been grantedon the same day as the original options. They are not exercisable as a result of the acquisition of GW Pharma bythe Company.
The Inland Revenue has approved the terms of the option exchange and confirmed that the scheme remainsapproved under schedule 9 to the Income and Corporation Taxes Act 1988.
All option holders have accepted the option exchange offer.
There are the following options over Ordinary Shares outstanding (these figures take into account an adjustmentfor the bonus issue of shares effected by GW Pharma on 3 April 2001).
GW Pharma Executive Scheme
The GW Pharma Executive Scheme was approved by the shareholders of GW Pharma on 12 July 2000and was adopted by that company on 16 August 2000.
The scheme provided for eligible employees and directors of GW Pharma and its subsidiaries to begranted either EMI Options or Unapproved Options to acquire shares in GW Pharma. Options grantedunder the scheme have now been exchanged for equivalent options over Ordinary Shares. No furtheroptions will be granted under the scheme.
The terms of options granted under the GW Pharma Executive Scheme are substantially the same asthose of the Approved Scheme, save they are over GW Pharma shares.
Following the acquisition of GW Pharma by the Company all option holders agreed to release theiroptions over GW Pharma shares in exchange for the grant of equivalent options over Ordinary Shares bythe Company. The replacement options will be treated for the purposes of the scheme as having beengranted on the same day as the original options. They are not exercisable as a result of the acquisition ofGW Pharma by the Company.
There are the following options over Ordinary Shares outstanding under the GW Pharma ExecutiveScheme (these figures take into account an adjustment for the bonus issue of shares effected by GWPharma on 3 April 2001 where applicable).
Options granted to consultants and Non-Executive Directors
Consultants and Non-Executive Directors are not eligible for the grant of options under the Executive orApproved Schemes.
Options over Ordinary Shares have been granted to such persons on similar terms to options granted under theExecutive Scheme as set out in the table below. Where the effective date of grant is before 1 June 2001, theoption replaces a prior option or right to an option granted over GW Pharma shares.
Effective Date of Grant On 21 June 2001 the Company entered into an agreement with Collins Stewart and the Directors pursuant to whichCollins Stewart has agreed to use its reasonable endeavours to procure subscribers on behalf of the Company for up to13,736,264 new Ordinary Shares at the Placing Price. The Placing Agreement is conditional on the entire issued and tobe issued share capital of the Company being admitted to trading on AIM by no later than 28June 2001 (or such otherdate as may be agreed between the parties). In consideration of their services in connection with the Placing, the Company will pay to Collins Stewart a fee of£270,000 together with an additional fee of 3 per cent of the Placing Price for each of the Placing Shares for whichCollins Stewart have arranged or procured placees on behalf of the Company. In addition, Collins Stewart has beengranted an option to subscribe for 240,068 new Ordinary Shares at the Placing Price (representing 0.25 per cent of theenlarged issued share capital as at Admission) exercisable at any time on or before the fifth anniversary of Admission.
The Placing Agreement contains warranties given by the Company and the Directors as to the accuracy of theinformation contained in this document and other matters relating to the Company and its business. In addition, theCompany has given an indemnity to Collins Stewart in respect of certain matters. Collins Stewart are entitled toterminate the Placing Agreement in specified circumstances prior to Admission, principally in the event of a materialbreach of the Placing Agreement or of any of the warranties contained in it or if an event of force majeure arises.
Pursuant to the Placing Agreement the Directors have also agreed to lock-in arrangements in relation to their shares inthe Company pursuant to which they have undertaken not to dispose of any shares in the Company held by them for aperiod of 12 months from Admission. They have further agreed that for a period of 6 months from the anniversary ofAdmission they will not dispose of more than 50 per cent. of their holding of shares in the Company, with any disposalfirst requiring consultation with Collins Stewart. The lock-ins cease to apply in certain limited circumstances such as ageneral offer being made for the Company. There are also some orderly marketing provisions set out in the PlacingAgreement.
As referred to in Part II of this document, the Directors (and persons who are connected with the Directors) haveundertaken not to dispose of any of their Ordinary Shares, which will represent approximately 45.8 per cent. of theCompany's issued share capital immediately following the Placing (assuming full implementation) for a period of oneyear from the date of Admission. They have further undertaken, that for a further six months from the date ofAdmission, not to dispose of more than 50 per cent. of the Ordinary Shares in which they have an interest.
Preston L. Parish, who will hold approximately 8.5 per cent. of the issued share capital of the Company following thePlacing (assuming full implementation) has entered into a lock-in agreement dated 20 June 2001 with the Companyand Collins Stewart purusuant to which he has agreed not to dispose of Ordinary Shares held by him for the period of12 months after the date of Admission, other than with the prior written consent of Collins Stewart and the Company.
In addition, an employee who will own approximately 2.4 per cent. of the issued share capital of the Companyfollowing the Placing) (assuming full implementation) has entered into a lock-in agreement dated 20 June 2001 withthe Company and Collins Stewart pursuant to which the employee has agreed not to dispose of Ordinary Shares inwhich she has an interest for a period of 12 months after the date of Admission.
10. Directors' Service Agreements
10.1 Each of the Executive Directors, namely Dr Geoffrey Guy, Dr Brian Whittle, Justin Gover and Jonathan Laughton, has a service agreement with the Company dated 1 November 2000. The Executive Directors eachagree to devote their whole time and attention to the Group. Each of the service agreements, other than that ofDr Guy, is terminable on not less than 6 months' written notice by either party. Dr Guy's service agreement isterminable on not less than 12 months' written notice by either party.
Basic annual salaries under the service agreements are £130,000 for Dr Guy, £82,680 for Dr Whittle, £75,000 forJustin Gover and £46,000 for Jonathan Laughton. Dr Guy's service agreement provided however, that for theyear ended 31 December 2000 Dr Guy agreed that he would be paid a salary of £95,000.
The Executive Directors are in addition eligible for a bonus on such terms and of such amount as may beapproved from time to time by the board in its sole discretion. The authority to award bonuses has beendelegated to the Remuneration Committee. Each Executive Director is entitled to life assurance, private medicalinsurance and permanent health insurance. Justin Gover and Jonathan Laughton are also entitled to acontribution by the Company to a personal pension scheme of a sum equal to 6.66 per cent. of their salaries.
Dr Guy is entitled to a contribution by the Company to a personal pension scheme of a sum equal to 12.0 percent. of his salary. Each of the Executive Directors has agreed to give a restrictive covenant during the term oftheir service agreement and for 12 months after termination of their service agreement not to carry on anycompeting business or solicit customers or employees of the Group.
The appointments of David Mace and Peter Mountford as non-executive directors of the Company are governedby the terms of letters of appointment both dated 20 June 2001. Each appointment is terminable on not less than3 months' written notice by either party. Pursuant to the letters Mr Mace and Mr Mountford are each entitled to afee of £12,000 per annum payable quarterly in arrears plus £2,000 per annum for each committee of the Boardon which they sit. They are also entitled to reimbursement for all reasonable out of pocket expenses properlyincurred by them on Company business. They are not eligible for any other benefits.
10.2 Save as aforesaid, no Director has entered into a service agreement with any Company in the Group which is not determinable by the employing Company without payment of compensation (other than statutorycompensation) within one year.
11. Material Contracts
The following contracts, not being contracts entered into in the ordinary course of business, have been entered into bythe Company and its subsidiaries within two years immediately proceeding the date of this document and are or maybe material: the Placing Agreement described at paragraph 8 above; on 31 May 2001, the Company entered into a share sale and purchase agreement with the shareholders of GWPharma to purchase the entire issued share capital of GW Pharma in consideration of the allotment of shares inthe Company. Each shareholder was allotted one Ordinary Share in the Company for every one share he held inGW Pharma, with the exception of Geoffrey Guy and Justin Gover who received one Ordinary Share less thantheir entitlement since each already owned one subscriber share in the Company; on 20 June 2001 the Company entered into a nominated adviser and broker agreement with the Directors andCollins Stewart pursuant to which the Company has appointed Collins Stewart to act as nominated adviser andbroker to the Company for the purposes of the AIM Rules. The Company has agreed to pay Collins Stewart a feeof £25,000 plus VAT per annum for services as nominated adviser and broker under this agreement. Theagreement contains certain undertakings and indemnities given by the Company and the Directors in respect of,inter alia, compliance with all applicable laws and regulations. The agreement is subject to termination on onemonth's notice by either party; on 10 May 2001 GW Pharma entered into a share sale and purchase agreement with Justin Gover, GeoffreyGuy, Brian Whittle and others being the shareholders of G-Pharm Limited ("G-Pharm"). Pursuant to the sharesale and purchase agreement GW Pharma agreed to acquire the entire issued share capital of G-Pharm inconsideration for the issue of 13,018,970 ordinary shares of 0.1p each in GW Pharma Limited (the"Consideration Shares") (representing approximately 15.8per cent. of the issued share capital of G W Pharmafollowing the allotment of the Consideration Shares). Justin Gover, Geoffrey Guy and Brian Whittle (the"Warrantors") have given GW Pharma a set of warranties relating to business and assets of G-Pharm ("theGeneral Warranties") on reasonable commercial terms. All shareholders have given warranties as to their titleand capacity to sell the G-Pharm shares held by them. The Warrantors also granted a deed of tax covenant infavour of GW Pharma. The maximum liability of the Warrantors under the General Warranties and the deed of taxcovenant is the lower of £5,067,277 and the amount they are able to realise on a sale of the ConsiderationShares. The maximum liability of shareholders in respect of the title warranties is the amount of considerationreceived by them; on 19 July 2000 GW Pharma entered into an agreement with Hortapharm B.V. ("Hortapharm") (a companyregistered in the Netherlands) pursuant to which Hortapharm granted GW Pharma a worldwide exclusivelicence to exploit all varieties of the cannabis plant developed by Hortapharm, together with a worldwideexclusive licence over Hortapharm's know-how in respect of the species or varieties of cannabis plantdeveloped by Hortapharm. This agreement is the continuation of an arrangement which has been in placebetween GW Pharma (or its successors in title) and Hortapharm since 30 April 1998. An exclusive licence overHortapharm's US Patent Application No. 08/919317 which relates to Hortapharm's vaporisation technology orderivation process is also granted to GW Pharma. The licence granted to GW Pharma is limited to human andveterinary medicine and/or nutraceutical products. Also excluded from the scope of the licence are a number ofareas where Hortapharm is either pursuing its own research or where it already has an agreement with a thirdparty. These exclusions are in four parts and can be summarised as follows: Breeding tricks and proprietary information in relation to the development of new plant varieties but notso as to affect GW's rights under the agreement.
Information relating to HP's existing agreement with a company for the extraction of a singlecannabinoid from one plant variety.
Hortapharm's anandamide project.
Information relating to use of any plant variety outside of the fields of human and veterinary medicineand/or as a nutraceutical product including industrial hemp, fibre or seed exclusively for non-medical ornon-nutraceutical purposes.
GW Pharma has licensed back to Hortapharm on a non-exclusive basis the right of exploitation in the PeoplesRepublic of China. Additionally where GW Pharma decides not to commercially exploit a particular plant varietyHortapharm is permitted to exploit it.
Under the Agreement, Hortapharm is obliged to make available to GW Pharma any know-how it develops inrelation to the licence and to provide suitably qualified staff to assist in the transfer of this know-how in exchangefor 24 monthly payments of £25,000 commencing on 30 April 1998 . GW Pharma is to pay to Hortapharm thesum of £100,000 on signature, a further £50,000 on completion of a transition plan to be agreed between theparties and further payments of £50,000 should development work for GW Pharma continue to be done byHortapharm in the period 25 to 36 months after signature and 36-47 months after signature. Additionally, GWPharma is obliged to pay Hortapharm for any development works carried out by Hortapharm not covered bythese payments the results of which GW Pharma subsequently commercially exploits. Royalties are to be paidby GW Pharma on sales exceeding £750,000 of all plant varieties licensed to GW Pharma under the Agreement.
This royalty is calculated as 5 per cent. of sales receipts less direct costs for the first three quarters of any yearand 5 per cent. of sales receipts less direct costs less maintenance costs for the last quarter of each year. Thisroyalty rate increases to 8 per cent. where the technology protected by the US patent is utilised but is reduced byhalf if GW Pharma is licensed on a semi-exclusive (where one additional third party is also licensed) basis.
Royalties are payable for the life of any United Kingdom plant registration protecting the relevant plant variety orwhere no such plant registration exists ten years from the date on which royalties first become due for that plantvariety. The Agreement remains in force until no further royalties are due.
The Agreement may be assigned, transferred, charged, licensed or dealt with in any other way by GW Pharmawho may also sub-contract its rights under it. Any assignment, sub-licence or sub-contract by Hortapharmcannot be done without the prior written consent of GW Pharma (such consent not to be unreasonablywithheld). Certain warranties are given by Hortapharm relating to its ownership of all plant varieties developedby it and in relation to the adequacy of the know-how in relation to the exploitation of the various plant varieties.
Hortapharm also warrants that its earlier agreements in this area will not conflict with or limit GW Pharma'srights under this agreement. Hortapharm provides an indemnity against the infringement of any third party rightsby GW Pharma's exploitation of any of the rights licensed to it and against breach of its warranties; and on 20 June 2001, the Company entered into an option agreement with Collins Stewart pursuant to which theCompany granted Collins Stewart the option to subscribe for 240,068 new Ordinary Shares at the Placing Price(representing 0.25 per cent. of the enlarged issued ordinary share capital of the Company immediately followingthe Placing) exercisable at any time on or before the fifth anniversary of Admission.
12. Warrants
The Company has issued a number of warrants to subscribe for Ordinary Shares. Details of these warrants aresummarised as follows: Earlier in 2001, the Company began negotiations with Prospect Investment Management Limited which wasacting on behalf of certain clients which it advises with a view to the Company securing the necessary funding tomeet its anticipated working capital requirements in the next 12 months, in the event the Company were unableto effect an initial public offering by July 2001. On 4 June 2001, the Company granted each of Lord Weinstockand Atlantic and General Investment Trust Limited (a subsidiary of RIT Capital Partners plc) a warrant tosubscribe for 195,750 Ordinary Shares exercisable at £1.03 during the period to 3 June 2006, by way of acommitment fee and in consideration of them undertaking to subscribe for 7,766,990 Ordinary Shares for anaggregate consideration of £8,000,000. The obligation to subscribe is unconditional in all respects andcrystalises on 31 July 2001, unless prior to such date Admission has occurred. In the event Admission hasoccurred prior to such date, the obligation/entitlement to subscribe will cease to be of effect.
On 9 February 2001, GW Pharma granted to Peter Mountford, in consideration for the provision of past andfuture services, a warrant to subscribe for 24,285 ordinary shares of £0.001 each, which warrant was held on hisown behalf and on trust for Adrian Bradshaw. The warrant was exercisable in three tranches of 9,285, 7,500 and7,500 shares respectively and exercisable at £17.50, £29.74 and £54.40 respectively during the period to14 January 2006, 2008 and 2011 respectively. The terms of the warrant provided that in the event of a capitalreorganisation, such warrant would become a warrant in respect of the shares of any holding company of GWPharma. Accordingly, following a capital reconstruction and bonus issue and upon the share for share exchangeon 31 May 2001, whereby the Company became the holding company of GW Pharma, the warrant becamewarrants in respect of 704,265 Ordinary Shares in the Company. On 20 June 2001, the warrant, as aforesaid,was cancelled and in its place two separate warrants were issued to Peter Mountford and Adrian Bradshaw eachin respect of 269,265 and 435,000 shares respectively and exercisable by Peter Mountford in three tranches of51,765, 108,750 and 108,750 and by Adrian Bradshaw in three tranches of 217,500, 108,750 and 108,750 at£0.60, £1.03 and £1.88 respectively during the same periods detailed above.
Neither the Company nor any of its subsidiaries is or has been engaged in any legal or arbitration proceedings whichmay have, or has had during the twelve months preceding the date of this document, a significant effect on theGroup's financial position nor are any such proceedings pending or threatened.
14. Working Capital
The Company is of the opinion that, having made due and careful enquiry and taking into account the net proceeds ofthe Placing, the Group has sufficient working capital for its present requirements, that is for at least the next twelvemonths from the date of Admission.
15. Consents
15.1 Arthur Andersen have given and have not withdrawn their written consent to the inclusion in this document of its reports and name and references thereto in the form and context in which they are included.
15.2 Bridgehead Technologies Limited has given and has not withdrawn its consent to the issue of this document with the inclusion in it of its report and references to its name in the form and context in which it is included.
16. United Kingdom Taxation
Stamp duty and stamp duty reserve tax 16.1 The Company has been advised that the issue of Placing Shares will not be liable to stamp duty or stamp duty reserve tax.
Taxation on dividends 16.2 Under current United Kingdom tax legislation, no United Kingdom tax will be withheld from any dividend paid by the Company.
16.3 An individual shareholder resident (for tax purposes) in the United Kingdom who receives a dividend from the Company will be entitled to a tax credit equal to one-ninth of the dividend which he may set off against his totalincome tax liability. Basic rate and starting rate taxpayers will normally have no further liability to tax on thedividend. Higher rate taxpayers will be liable to tax on the sum of the dividend plus the tax credit at the higher rateof 32.5 per cent. against which liability the tax credit can be offset. So, for example, a dividend of £80 will carry atax credit of £8.89 (one-ninth of £80) and to the extent that the dividend and the related tax credit fall above thethreshold for the higher rate of income tax, a taxpayer will be subject to income tax on £88.89 (£80+£8.89) at32.5 per cent. i.e. £28.89 less a tax credit of £8.89, leaving a tax charge of £20.
16.4 Subject to certain limited exceptions, a corporate shareholder resident (for tax purposes) in the United Kingdom will not be liable to United Kingdom corporation tax on any dividend received from the Company.
16.5 The right of a shareholder who is not resident (for tax purposes) in the United Kingdom to a tax credit in respect of a dividend received from the Company and to claim payment of any part of that tax credit from the InlandRevenue will depend on the existence and terms of any double taxation convention between the UnitedKingdom and the country in which the holder is resident. Such a shareholder should consult his own tax adviserconcerning his tax liability on dividends received, whether he is entitled to claim any part of the tax credit and, ifso, the procedure for doing so. United Kingdom taxation on chargeable gains 16.6 A disposal of all or any part of the Placing Shares may, depending on the shareholder's individual circumstances, give rise to a liability to pay United Kingdom taxation on chargeable gains. Individuals, personal representativesand trustees may be entitled to taper relief, which may serve to reduce the chargeable gain. Companies are notentitled to taper relief, but are entitled to indexation allowance which may reduce the chargeable gain.
Inheritance Tax ("IHT") Relief 16.7 Unquoted Ordinary Shares in a qualifying Company such as the Company ordinarily qualify for 100 per cent. IHT Business Property Relief provided they have been held for two years prior to the event giving rise to IHT. Sharestraded on AIM are regarded as unquoted for this purpose and are therefore in principle eligible for IHT BusinessProperty Relief.
The above statements are intended only as a general guide to certain aspects of current tax law and Inland
Revenue practice in the United Kingdom. It is directed at United Kingdom residents beneficially entitled to
their Ordinary Shares held as investments. It may not apply to certain classes of shareholder such as dealers
in securities or to persons who are not resident or ordinarily resident in the United Kingdom. Any person who
is in any doubt as to his tax position or who is subject to tax in a jurisdiction other than the United Kingdom is
strongly advised to consult their own professional adviser immediately.

17. Intellectual Property Rights
GW is the proprietor of the following five UK and one US patent applications: UK patent application number 0025809.5 entitled "Dose Dispensing Apparatus" filed on 20 October 2000.
UK patent application number 0025811.1 entitled "Secure Dispensing of Materials" filed on 20 October 2000.
UK patent application number 0103638.3 entitled "Pharmaceutical formulations" filed on 14 February 2001".
This is also the subject of a related US patent application number also initiated on 14 February 2001. There is astatutory 6 week holding period on all foreign applications made by UK residents and therefore this USequivalent was not filed until 5 April 2001 and has not yet been allocated an application number.
UK patent application 0111046.9 entitled, "Process and apparatus for extraction of active substances andenriched extracts from natural products" filed on 4 May 2001.
UK patent application 0111597.1 entitled, "Pharmaceutical Compositions" filed on 11 May 2001.
As is standard practice in these matters none of these patent applications have been the subject of any formalpre-application searches in respect of their subject matter and none have as yet progressed to either search orexamination as to patentability by the relevant patent offices. GW has however in some cases carried out its owninformal searches which have not identified any major problems.
GW currently expects that, assuming the search results are favourable, all five UK applications will also form the basisfor international patent applications which it will be able to file under an international treaty called the PatentCooperation Treaty. It is anticipated that these UK applications will form a basis of applications in Europe, the US andJapan and in Australia, Canada, South Africa, Korea, China and Taiwan.
In addition to these patent applications already filed GW have a number of other inventions in various stages ofdevelopment relating to extraction processes and apparatus for extraction processes as well as drug deliveryapparatus. These are also likely to be the subject of patent applications in due course.
GW have the benefit of an exclusive licence with Hortapharm BV in respect of US patent application number08/919317 entitled "Vaporiser for inhalation and method for extraction of active ingredients from a crude naturalproduct or other matrix". This US patent application was filed on 28 August 1997 and has recently been formally allowed by the US Patent Office. It is expected to proceed to grant very shortly. This patent was originally filed in thename of its inventor, David Pate and was assigned to Hortapharm by assignments dated 26 August 1997 and20 December 2000.
This assignment was recorded at the USPTO with effect from 9 January 2001.
Trade marks
To date GW has one UK trade mark for a device incorporating the words "UK Medicinal Cannabis Project". This is UKRegistration No. 2213257.
GW is however also actively involved in a search programme to identify potential and available names for the productsit is developing. It is anticipated that these will be the subject of trade mark applications in due course.
Plant variety rights
GW has an exclusive licence to use certain plant variety rights applied for in the name of Hortapharm BV. In addition,GW are themselves actively involved in obtaining plant variety right registrations across the European community inrelation to new cannabis chemovars.
18. General
18.1 There is no minimum amount which in the Directors' opinion must be raised in respect of the matters referred to in paragraph 21 of Schedule 1 to the POS Regulations.
18.2 Save as disclosed in this document, no person (other than a professional adviser referred to in this document or trade suppliers) has: received, directly or indirectly, from the Company within the 12 months proceeding the Company'sapplication for Admission; or entered into any contractual arrangement (not otherwise disclosed in this document) to receive (directlyor indirectly), from the Company on or after Admission any of the following: fees totalling £10,000 or more; securities in the Company with a value of £10,000 or more calculated by reference to the PlacingPrice; or any other benefit with a value of £10,000, or more at the date of the Admission.
In November 2000 BGL Reads Asset Management Limited received a fee of £21,800 from GW Pharma inrespect of corporate finance advice given in relation to the last round of financing of the Group. In January 2001Edward Gold received a fee of £26,952 from GW Pharma in respect of services provided to the Group in relationto its last round of financing - this sum was used to subscribe for shares in GW Pharma.
18.3 There has been no significant change in the financial or trading position of the Company or its subsidiaries since 31 March 2001, the date to which the latest interim accounts were made up.
18.4 The estimated amount of the expenses of the Placing is approximately £1.5 million (exclusive of VAT) and is payable by the Company, out of which Collins Stewart will receive commission of approximately £750,000 inrespect of the placing of the new Ordinary Shares. 18.5 The financial information contained in the Accountants' Reports set out in Parts VI and VII of this document does not constitute statutory accounts within the meaning of Section 240 of the Act. Statutory accounts for GWPharma for the two periods ended 30 September 2000 have been delivered to the Registrar of Companies. Theauditors' reports on all of the above accounts were unqualified and did not contain a statement under Section237(2) or (3) of the Act.
18.6 The amount payable on application and allotment of each New Ordinary Share is 182p of which 181.9p is payable by way of premium.
18.7 The Company is making an application to CRESTCo Limited for the Ordinary Shares to be settled through CREST and to be admitted as a participating security. It is expected that the admission of the new Ordinary Shares inCREST as a participating security will be effective upon Admission. Shareholders who are direct or sponsoredmembers of CRESTCo Limited will then be able to dematerialise their Ordinary Shares in accordance with therules and practices instituted by CRESTCo Limited.
19. Document available for inspection
Copies of this document will be available free of charge at the registered office of the Company and at the offices ofCollins Stewart, 9th Floor, 88 Wood Street, London EC2V 7QR during normal business hours on any weekday(Saturdays and public holidays excepted) until the date falling one month after the date of Admission. Copies of thefollowing documents will be available for inspection at the offices of Rowe & Maw, 20 Black Friars Lane, LondonEC4V 6HD during normal business hours on any week day (excluding Saturdays and public holidays) for thesame period: memorandum and articles of association of the Company; the audited financial statements of GW Pharma for the two financial periods ended 30 September 2000; the reports produced by Arthur Andersen set out in Parts VI and VII of this document; the long-form report of Bridgehead Technologies Limited referred to in Part V of this document; the placing agreement referred to in paragraph 8 above; the lock-in arrangements referred to in paragraph 9 above; the Directors' service agreements and letters of appointment referred to in paragraph 10 above; (viii) the material contracts referred to in paragraph 11 above; the consent letters referred to in paragraph 15 above; and this document.
Dated 21 June 2001 Millnet Financial

Source: http://www.gwpharm.co.uk/uploads/gw_plc-admission_doc-june_2001.pdf

jgtps.com

B. Raj Kumar et al. / JGTPS/ 5(3)-(2014) 1827- 1832 Journal of Global Trends in Pharmaceutical Sciences Journal home page: www.jgtps.com A NEW VALIDATED STABILITY-INDICATING RP-HPLC METHOD FOR THE DETERMINATION OF TELBIVUDINE B. Raj Kumar1* Dr. K. V. Subrahmanyam2 Telbivudine 5'–triphosphate inhibits HBV DNA polymerase (reverse

imagingonline.co.uk

Arch Dis Child 2007;92:251–256. doi: 10.1136/adc.2006.106120 bone exceeds the ability of the bone to box). It is easier to show ligamentous laxity in this absorb the force by deforming. Fractures in older group than in infants. children are common—approximately one third ofchildren will have a fracture by 16 years of age, PATHOPHYSIOLOGY OF BONE DISEASES with more boys experiencing fracture than girls.1