Publication of Pathfinder Prospectus

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Jun 05, 2001

GW Pharmaceuticals plc ("GW" or "the Company"), a pharmaceutical company developing an innovative range of prescription medicines that harness the medicinal benefits of cannabis, announces that it has published a pathfinder prospectus in relation to the proposed flotation of the Company on the Alternative Investment Market of the London Stock Exchange.

The flotation will be by way of a Placing of new shares to institutional investors in the UK.

Marketing roadshows involving presentations by GW Pharmaceuticals management to institutional investors start on Monday 11 June 2001.

The Placing is expected to raise up to £16 million (gross) of new money for the Company.

The Company is expected to have a market capitalisation of approximately £140 to £170 million, including the £16 million gross proceeds.

Pricing for allocations is expected to be announced on or about Thursday 21 June 2001, following the close of the Placing. Dealings in the ordinary shares are expected to commence on or about Thursday 28 June 2001.

Collins Stewart is nominated adviser and broker to GW.

Commenting on the announcement, Geoffrey Guy, Executive Chairman of GW Pharmaceuticals said: "Flotation will enable GW to take the next step in developing what began as a patient driven proposition with considerable government support into a full service pharmaceutical company capable of establishing a position in several large markets. The flotation proceeds will allow GW to fund the first pivotal Phase III trials programmes and to establish production facilities in anticipation of the first market launch of its products. The proceeds will also enable the Company to continue expanding product development activities both in the UK and abroad."

For further information:

Enquiries:

GW Pharmaceuticals pl: (21/06/01) + 44 20 7067 0700

Dr Geoffrey Guy, Executive Chairman: (Thereafter) + 44 1980 557000

Justin Gover, Managing Director

Collins Stewart Limited:

Andrew Richmond:+44 20 7523 8418

Paul Wedge:+44 20 7523 8412

Square Mile BSMG Worldwide: + 44 20 7067 0700

Susan Ellis/Rochel Velasco/Graham Herring

GW Pharmaceuticals key information

The Business

GW is a pharmaceutical group developing a portfolio of prescription medicines derived from cannabis to meet patient needs in a wide range of therapeutic conditions. GW maintains control over all aspects of the product development process - botanical research, cultivation, extraction, formulation into drug delivery technologies, clinical trials and regulatory affairs.

The Group has a broad product portfolio and the Directors have identified certain key markets for its products including Multiple Sclerosis, Cancer Pain and Rheumatoid Arthritis.

The Group's product for Multiple Sclerosis has recently entered into pivotal Phase III clinical trials and other products are in Phase II clinical trials. GW's products are to be administered by means of pharmaceutical delivery technologies including a sub-lingual (under the tongue) spray, sub-lingual tablets and an inhaler.

Key strengths

The Directors believe that GW has a strong competitive position worldwide in relation to cannabis-based medicines and that there are considerable barriers to entry to deter potential competitors. The Directors believe 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 its products 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's medicines;
  • 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 and Europe; and
  • it is currently, so far as the Directors are aware, the sole producer of pharmaceutical grade cannabis plant materials under licence in the world.

The Directors believe that these key strengths will enable the Company to capitalise upon the substantial market opportunity for GW's medicines.

Cannabis-based medicines

The beneficial therapeutic effects reported by patients who use cannabis appear to result from the interaction of certain cannabinoid molecules in the plant. These cannabinoids provide GW with a rich source of new medicines. Given the long history of medicinal use of cannabis, the Directors believe that the development of its cannabis-based medicines holds a greater certainty of success than many other biopharmaceutical or biotechnology programmes.

GW is developing a broad product portfolio of cannabis-based medicines. These are derived from standardised whole extracts of proprietary cannabis plant varieties which have been bred to provide a pre-determined content of selected cannabinoids. Extracts from plant varieties are then incorporated into a range of drug delivery technologies including a sub-lingual spray, sub-lingual tablets and an inhaler. These products undergo a full pharmaceutical development programme, including pre-clinical and clinical testing, 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 continue to regard its activities in the UK and Europe as its primary focus, it intends to develop further its activities in the 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 as follows:

  • 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 the confidence to accelerate the product timetables for the medium and longer term opportunities in the pipeline.
  • 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 as Parkinson's disease). All of these markets have been selected on the basis of evidence supporting the potential effectiveness of cannabis-based medicines.

The Directors believe that the market opportunity for GW's medicines is substantial.

Official support

GW's programme has the support of the UK Government and has been welcomed by other governments and organisations around the world. The UK Government has stated repeatedly that it will permit prescription of cannabis-based medicines, subject to regulatory approval from the Medicines Control Agency ("MCA").

Current Trading and Prospects

The Group has started its Phase III trials programme relating to Multiple Sclerosis, and the Directors believe that the prospects for revenue generation in this market are good. There are approximately 2.5 million people worldwide suffering from Multiple Sclerosis. The Directors believe that GW's product could take a significant share of this market.

In addition, the Directors expect to commence Phase III trials in Cancer Pain during the second half of 2001 and to expand Phase II trials for other target markets. The Directors believe the size of Cancer Pain and other 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 regulatory approval to the MCA in 2003 and, subject to such regulatory approval being granted, being made available for sale in early 2004.

Reasons for the Placing and use of proceeds

The Placing will raise approximately £16 million gross of expenses, for the Company. These proceeds will be 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 its products; 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 within the 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 future success of the Company and should help attract and retain high calibre staff.

This press release constitutes an investment advertisement for the purposes of Section 57 of the Financial Services Act 1986. It is issued by the Company and its contents have been approved for the purposes of that Section by Collins Stewart Limited, which is regulated in the conduct of investment business by The Securities and Futures Authority Limited.

For the purposes of this press release Collins Stewart Limited is acting as financial adviser to the Company and no one else. In approving this advertisement Collins Stewart Limited has relied on information supplied by the directors of the Company. If you require advice in relation to this press release you should contact your solicitor, accountant or other professional adviser under the Financial Services Act 1986.

The offer for securities in the Company will not be made, directly or indirectly, in or into the United States, Canada, Australia, the Republic of Ireland or Japan. Accordingly, copies of this press release are not being and must not be mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia, the Republic of Ireland or Japan and persons receiving this press release (including custodians, nominees and trustees) must not distribute or send it into or from the United States, Canada, Australia, the Republic of Ireland or Japan.

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