GW Pharmaceuticals GWP Preliminary Results

  GW Pharmaceuticals (GWP) - Preliminary Results

RNS Number : 1583S
GW Pharmaceuticals PLC
28 November 2012

                            GW Pharmaceuticals plc


                             Preliminary Results

 Commercial sales growth, Phase III progress, New clinical data demonstrates
                                pipeline value

Porton Down, UK, 28 November 2012:  GW Pharmaceuticals plc (AIM: GWP, "GW"  or 
"the Group"),  the specialty  pharmaceutical  company focused  on  cannabinoid 
science, announces its  preliminary results  for the year  ended 30  September 

COMMERCIAL: Sativex in-market sales growth follows new country launches

·Sativex^® in-market net sales by  partners grow to £10.0m (2011:  £5.3m), 
reflecting 108% volume growth

·Positive reimbursement decision received in Germany

·A total  of  22  countries have  now  approved/recommended  approval  for 

o 12 new European launches being  planned from early 2013 onwards,  including 

o Regulatory submissions underway in a further eight countries

·New post-approval data in Germany and UK show positive clinical  benefits 
of Sativex for patients and  their carers, as well  as the potential to  yield 
cost savings for healthcare systems

·Milestone payment of €11.9m (£9.8m) received from Almirall, and extension
of Almirall's Sativex commercial rights to Mexico

SATIVEX R&D: Sativex  Phase III  cancer trial  programme -  initial US  target 

·Three Sativex Phase III cancer pain trials ongoing - trials fully  funded 
by US partner, Otsuka 

PIPELINE R&D: Positive Phase II  diabetes data highlights breadth of  clinical 

·Positive preliminary data  reported today from  a Phase IIa  exploratory 
clinical trial of the novel cannabinoid  medicine GWP42004 in type 2  diabetes 
(see separate announcement)

·Phase IIa  trial of  novel cannabinoid  medicine GWP42003  in  ulcerative 
colitis is on-going and due to complete in mid-2013

·Additional product candidates earmarked for entry to the clinic in  2013: 
Phase Ib/IIa  trial  in glioma  in  planning  for 2013.  Lead  drug  candidate 
GWP42006 identified in pre-clinical epilepsy programme and set to enter  Phase 
I trial in 2013

FINANCIALS: Revenue growth and net  cash inflow provides strong balance  sheet 
to support R&D investment to maximise pipeline value

·Total revenue increased to £33.1m (2011: £29.6m), principally  reflecting 
increased R&D fees and  milestone payments. GW Sativex  sales of £2.5m  (2011: 
£4.4m) in line with guidance

·Net profit before tax of £1.2m(2011: £2.5m)

·Cash and short term deposits at 30 September 2012 increased to £29.3m (30
September 2012: £28.3m)

Dr Geoffrey Guy, GW's Chairman, said, "GW has made strong progress in 2012. We
are pleased with  the growth of  Sativex in-market sales  and look forward  to 
further launches in up to  12 countries in Europe  next year. In addition,  we 
are now undertaking our largest ever  clinical programme to expand the  market 
opportunity for  Sativex  beyond  multiple sclerosis  to  cancer  pain.  This 
programme comprises three  global Phase III  cancer pain trials  and is  fully 
funded by  our partner,  Otsuka. Importantly,  success in  this indication  is 
intended to lead to our first commercial launch in the U.S. market. Our strong
financial position allows us to invest  in advancing our product pipeline  and 
we are encouraged by the positive data reported today from our first Phase  II 
trial for GWP42004, a novel cannabinoid drug candidate, in type 2 diabetes. We
look forward to progressing this and other early stage clinical programmes  in 

An analyst  presentation is  being held  today at  9.30am at  FTI  Consulting, 
Holborn Gate,  26  Southampton Buildings,  London  WC2A 1PB.  Please  contact 
Natalie Garland-Collinsat FTI Consulting on +44 20 7269 7121 for details.  An 
audio webcast  of  the presentation  will  be  available on  GW's  website  at later this afternoon.



GW Pharmaceuticals plc                   (28/11/12) + 44 20 7831 3113
Dr Geoffrey Guy, Chairman               (Thereafter) + 44 1980 557000
Justin Gover, Managing Director
FTI Consulting                                      + 44 20 7831 3113
Ben Atwell / Simon Conway / John Dineen
  Peel Hunt LLP                                    +44 20 7418 8900
  James Steel / Vijay Barathan                                    

                            GW Pharmaceuticals plc

                            ("GW" or "the Group")


           Preliminary Results for the Year Ended 30 September 2012



In order  to reflect  the commercial  progress  of Sativex^®  as well  as  the 
Group's  on-going  investment  in  its  pipeline,  GW's  preliminary   results 
statement is structured to reflect the three key components to GW's  business: 
Sativex Commercial; Sativex R&D; and Cannabinoid Platform/Pipeline R&D.

1. Sativex Commercial

GW is increasingly  a commercial  business generating  sales revenues  through 
supply of  commercial  product to  GW's  marketing partners.  Sativex  is  now 
launched in seven countries,  an additional 12 launches  are in planning,  and 
eight further regulatory applications are in progress. With Sativex having now
entered the early phase of its commercial life and with a large number of  new 
markets expected  to launch  in the  next two  years, in-market  sales  growth 
generated by marketing partners  is expected to drive  GW revenue growth  from 
product sales.

2. Sativex R&D

Sativex is currently approved  /recommended for approval  in 22 countries  for 
spasticity due  to Multiple  Sclerosis (MS)  but with  three large  Phase  III 
studies in cancer pain on-going, we believe that the MS indication  represents 
only the start of  Sativex's commercial potential. GW  is seeking to  maximise 
the potential of  Sativex through  these cancer  pain trials  which are  fully 
funded by Otsuka  Pharmaceutical Co. Ltd.  This programme is  targeted at  the 
important United States (US)  market but we  also intend to  use the data  for 
global regulatory filings in order to address this major unmet need across the

3. Cannabinoid Platform / Pipeline R&D

GW occupies a world leading position  in cannabinoid science. We believe  that 
there is  significant  opportunity  to leverage  this  strategic  position  to 
develop a number  of new  medicines. This  is underlined  by the  announcement 
today of encouraging initial  results from a Phase  II exploratory trial of  a 
novel cannabinoid, GWP42004,  in type  2 diabetes while  a Phase  II trial  in 
ulcerative  colitis  for  another  cannabinoid,  GWP42003,  is  on-going.   In 
addition, following highly promising pre-clinical data in cancer and epilepsy,
an initial Phase Ib/IIa clinical trial in glioma is in planning for 2013 and a
lead drug candidate  for the  epilepsy programme  has been  identified and  is 
expected to enter Phase I trials in 2013.


In March 2012, we  signed an amendment to  the Sativex licence agreement  with 
our European partner  Almirall. As a  result, we received  a new milestone  of 
€11.9m (£9.8m) in May 2012 based on achievement of a cancer pain trial patient
recruitment target. Including this  payment, GW has to  date received £69m  in 
signature fees, technical access fees and milestone payments from its  various 
licence agreements.  GW  is eligible  to  receive up  to  a further  £201m  in 
additional milestone payments and also generates royalty/product supply income
derived from sales by its existing commercial partners.

The 2012 Almirall amendment also  granted Almirall extended commercial  rights 
to Sativex  beyond Europe  to include  Mexico.GW also  agreed to  reduce  the 
Sativex supply price charged by GW to  Almirall over the next few years  until 
the launch of Sativex in  the cancer pain indication  in Europe and agreed  to 
cancel future cancer pain launch milestones of £5.5m.

Regulatory Progress - MS Spasticity

Sativex is  currently approved  / recommended  for approval  in 22  countries, 
including 18  countries  in Europe  where  it  is the  first  new  therapeutic 
solution to  treat  MS symptoms  in  over ten  years.  It is  indicated  as  a 
treatment for  symptom improvement  in  patients with  moderate to  severe  MS 
spasticity  who  have  not  responded  adequately  to  other   anti-spasticity 
medication  and  who   demonstrate  clinically   significant  improvement   in 
spasticity related symptoms during an initial trial of therapy.

In May 2012, GW successfully completed the Mutual Recognition Procedure  (MRP) 
in ten additional  European countries for  approval of Sativex.  Of these  ten 
countries, Belgium, Finland,  Iceland, the Netherlands,  Norway, Portugal  and 
Slovakia have now finalised their national regulatory approvals. We expect the
remaining countries (Ireland, Luxembourg, Poland) to finalise their  approvals 
in   the   coming   months.   In    prior   years,   Sativex   had    received 
approvals/recommendations for  approval in  the UK,  Spain, Germany,  Denmark, 
Italy, Sweden, Austria, and  the Czech Republic.  A regulatory application  is 
ongoing in Switzerland and due to complete in 2013.

Beyond  Europe,  Sativex  has   just  been  approved   in  Australia  for   MS 
spasticity.Earlier this year, Sativex received approval in Israel for the  two 
indications of  MS  Spasticity  and  MS neuropathic  pain.  Sativex  has  also 
previously received regulatory approval  for MS spasticity  in Canada and  New 
Zealand.  In  addition,  regulatory  submissions  have  been  filed  in  seven 
countries in the Middle East.


Total Sativex in-market net sales rose  to £10.0m (equivalent to £11.1m  gross 
sales) in 2012 from  £5.3m last year.  The volume of  Sativex 10ml vials  sold 
in-market by our partners  increased year on year  by 108%. Almirall  launched 
the medicine this month in Norway having previously launched in Germany, Spain
and Denmark in 2011.

We expect Sativex launches in  up to an additional  12 countries in Europe  in 
the next  12  to 24  months  following  completion of  mandatory  pricing  and 
reimbursement procedures in each country.  The next important market  expected 
to launch is Italy, expected in Q1 2013.

The drug is  currently commercialised  in 7  countries -  Germany, Spain,  UK, 
Denmark, Norway, Canada and Israel.

New Data from Germany and UK Confirm Benefits and Support Cost-Effectiveness

At the  European Congress  of Multiple  Sclerosis (ECTRIMS)  in October  2012, 
Almirall hosted  a  satellite  symposium  highlighting  the  key  benefits  of 
Sativex, which was attended by some  900 delegates. At this symposium  results 
of the MObility ImproVEments  with Spasticity in  Multiple Sclerosis (MOVE)  2 
observational study performed in Germany were presented. This study  involved 
300 patients with moderate to severe  MS spasticity treated in 42  specialized 
MS centres throughout  Germany. The  study showed that  one month's  treatment 
with Sativex reduced moderate to severe spasticity by 20% or more in more than
4 out of 10 patients previously unresponsive to conventional therapies.  After 
three months, the improvement  observed was 30% or  more. Overall, 55% of  the 
initial patients  were  eligible for  continuing  treatment beyond  the  third 
month. Mean MS spasticity Numeric Rating  Scale (NRS) scores decreased by  25% 
compared to  pre-treatment with  Sativex, with  41% of  patients improving  at 
least 30%  from baseline.  Quality  of life  measurements also  improved  from 
baseline in the third month's visit.

In the UK, Sativex prescription use in the UK has been the subject of a recent
peer-reviewed  publication  (Notcutt  W,   Primary  Health  Care  Research   & 
Development, 2012). 124 patients took part in the survey with a mean  duration 
of treatment with Sativex of 30 months. The majority of respondents and  their 
caregivers  reported  improvements   across  a  range   of  daily   functional 
activities, alongside a  reduction in the  use of concomitant  anti-spasticity 
medication and in the use of other healthcare resources. Key findings include:

· 31% of Sativex patients had reduced visits to the doctor

· 31% of Sativex patients had fewer accidents requiring medical attention

·  21%  of  Sativex  patients  reduced   or  stopped  the  use  of   other 
anti-spasticity medication

· 16% of Sativex patients reduced their visits to the physiotherapist

· 14% of Sativex patients were newly able to undertake activities  without 
the need for help or equipment

Also of importance was the fact that the vast majority of caregivers  reported 
that, because  of Sativex  treatment, there  had been  a benefit  to them.  In 
particular, almost  50% of  caregivers reported  an improvement  in their  own 
sleep quality.  This suggests  a reduction  in the  caregiver's burden,  which 
could also impact on their well-being  and also the patients. Taken  together, 
these findings suggest Sativex provides important long term clinical  benefit, 
both to  patients  and  their  caregivers, and  has  the  potential  to  yield 
significant cost savings for healthcare systems.

In addition, a recent publication (Sativex in multiple sclerosis spasticity: a
cost-effectiveness model - Slof J et al, Expert Rev. Pharmacoecon. Outcomes  2 
Res. 12(4), (2012)) has shown that Sativex is a cost effective treatment.


In  June  2012  the   commercial  prospects  for   Sativex  in  Germany   were 
significantly enhanced following  receipt of  a positive  resolution from  the 
Federal Joint Committee (G-BA) supporting  reimbursement of the product.  This 
resolution allows Almirall  to proceed  with the next  and final  step in  the 
process, agreement of a price with  the German pricing authorities, a  process 
which is expected to conclude in the coming months.

Sativex was launched in  Germany by Almirall in  July 2011. With over  120,000 
people with MS, Germany represents the largest European market opportunity for
Sativex. The market performance since  launch has been strong with  Almirall's 
ex-factory net sales  in the  12 months to  30 September  2012 reaching  €4.9m 
(2011: €0.9m).


Despite the challenges posed by the  economic climate in Spain, GW is  pleased 
with initial sales  performance of  Sativex since  its launch  in March  2011. 
Almirall's ex-factory net sales in the 12 months to 30 September 2012  reached 
€2.1m (2011: €0.7m). Formulary listings have now been achieved in the majority
of key target hospitals  and sales growth is  expected to continue during  the 
coming year. Sativex  is a  fully reimbursed medicine  under Spain's  National 
Health System.


In the  UK, Sativex  generated in-market  net sales  in the  12 months  to  30 
September 2012 of £2.4m (2011: £2.4m). The drug was launched in this market in
2010 by GW's UK marketing partner, Bayer HealthCare

The pace of sales  growth in the  UK is expected to  be determined by  Bayer's 
efforts to  secure NHS  funding for  Sativex from  local Primary  Care  Trusts 
(PCTs).  A  significant  body  of  work  has  been  undertaken  this  year  to 
demonstrate the positive budget impact that Sativex may have for PCTs in terms
of the reduced cost burden  on the NHS for  patients who benefit from  Sativex 
treatment. This new pharmaco-economic data  was introduced by Bayer in  summer 
2012 and will be the focus of their strategy for next year.

In  addition,  the  National  Institute  for  Clinical  Excellence  (NICE)  is 
reviewing Sativex  as part  of a  proposed updated  set of  NICE MS  Treatment 
Guidelines. This review process is now underway.


Launch in Norway has  taken place this  month. Sales to  date in Denmark  have 
been modest.

New European Launches

The next major Sativex  launch is expected in  Italy in early 2013.  Launches 
are also in planning  for Sweden, Austria,  Czech Republic, Belgium,  Finland, 
Iceland, Ireland, Luxembourg, the Netherlands, Poland, Portugal and  Slovakia. 
In each country, Sativex requires pricing and reimbursement to be agreed  with 
the national authorities  prior to  launch. The  length of  time required  for 
pricing/reimbursement varies considerably across countries.

SATIVEX R&D - Entry into the US Market and Expanding the Sativex Label

Sativex in Cancer Pain

Market research suggests the commercial potential of Sativex in the  treatment 
of cancer  pain is  significant. It  is estimated  that approximately  38%  of 
advanced cancer patients suffer pain which is not adequately treated by opioid
therapy, the current standard of care.

GW's cancer pain clinical  programme is being wholly  funded by Otsuka,  which 
has licensed the US commercialisation rights to this product. The programme is
the largest ever undertaken  by GW and involves  trial sites in Europe,  North 
America, Latin America and Asia. The trials are designed to obtain approval in
this indication from the Food & Drug Administration (FDA) in the US, and these
data are also intended to be used by GW for future regulatory applications  in 
this indication in Europe and around the world.

Prior to commencing the Phase III programme, GW completed two Phase II studies
including over 530  patients with positive  results. Both of  these have  been 
published in peer-reviewed journals, the  most recent being published  earlier 
this year in the Journal  of Pain, the official  journal of the American  Pain 
Society (Portenoy R et al 2012, Journal of Pain, Vol 13, Issue 5, pp 438-449).
In addition,  a  study  confirming  the efficacy  and  safety  of  Sativex  in 
long-term use  in  patients  with  cancer pain  has  recently  been  published 
(Johnson  J  et   al.  J   Pain  Sympt   Management.  2012   Nov  7   doi:pii 
S0885-00439-3.10.1016/j.painsymman 2012.07.14 [epub ahead of print])

Pivotal Phase III Programme

The pivotal Phase  III programme comprises  two randomised  placebo-controlled 
multi-centre multinational  trials as  well as  a long  term extension  study. 
Patient recruitment for both studies is on-going. Initial recruitment  focused 
on European trial sites and operations  have expanded over recent months to  a 
large number  of US  sites which  are due  to contribute  significant  patient 
numbers for the remainder  of the studies. Recruitment  to date in Europe  has 
progressed according to  expectation. The  timing of completion  of these  two 
studies will be dependent  on US recruitment in  2013. Regulatory filings  are 
intended to be made upon completion of these two studies.

Each Phase III trial is intended to recruit 380 patients and will evaluate the
efficacy and safety of Sativex versus placebo over a 5 week treatment  period. 
The primary efficacy analysis  is the continuous  response analysis, the  same 
analysis that has yielded statistically  significant results in both Phase  II 

Third Phase III Trial

A third supportive Phase III trial commenced in May 2012. The purpose of  this 
trial is to provide,  as needed, supplementary data  to that generated in  the 
two pivotal studies.

The third  Phase III  trial differs  in  design from  the first  two  studies, 
employing an  "enriched study  design"  akin to  that which  was  successfully 
employed in the MS  spasticity trials programme.  The study involves  exposing 
patients to Sativex in a single blind phase of two weeks duration ("Phase A"),
following which responders  will be randomised  either to stay  on Sativex  or 
switch to placebo in  a double blind  phase for a  five week treatment  period 
("Phase B").  The primary  efficacy  analysis will  be  the mean  change  from 
baseline in Phase B. The study will  aim to recruit 540 patients into Phase  A 
and target 216 patients to enter Phase B.

Sativex Investigator Studies

As with any new medicine, the availability of Sativex has provoked interest in
its potential for other neurological conditions, particularly motor  disorders 
and neurodegenerative  diseases.  GW is  working  with a  number  of  leading 
academic  centres  around  Europe  studying  Sativex  in  conditions  such  as 
amyotrophic lateral sclerosis (the most common form of motor neurone disease),
Huntington's disease, cervical dystonia and Tourette's syndrome.


GW occupies a world leading position  in cannabinoid science. The company  has 
developed a  proprietary and  validated  cannabinoid technology  platform  and 
formed constructive  collaborations  with  leading  international  scientists, 
universities and institutions in the  field. GW's researchnetwork now  extends 
to 28 academic institutions in eight countries and involves research in a wide
range  of  therapeutic  areas,  including  oncology,  neuroscience,  metabolic 
disease,  inflammatory   disease,  gastroenterology,   and  dermatology.   The 
objective of  this  research  effort is  to  progress  a number  of  GW's  new 
cannabinoid pipeline candidates to full clinical development.

In March 2012, GW  announced that Professor Vincenzo  Di Marzo has joined  the 
company's research  team as  Research Director  of GW  Research Ltd  and  GW's 
Cannabinoid Research Institute and is  now directing GW's global  pre-clinical 
research programme.  Alongside  Professor  Roger  Pertwee,  GW's  Director  of 
Pharmacology,  Professor  Di  Marzo  is   one  ofthe  world's  most   eminent 
cannabinoid scientists.

In-House Funded Research

The principal areas of GW's  investment are in diabetes/metabolic disease  and 
inflammatory conditions. GW is selectively investing its resources to  advance 
this part of the cannabinoid pipeline with a view to signing new out-licensing
agreements in due course.

Diabetes/Metabolic Disease

As announced  separately today,  GW has  reported encouraging  results from  a 
Phase IIa exploratory study identifying GW's novel cannabinoid, GWP42004, as a
promising new treatment for  type 2 diabetes. In  the study, which examined  a 
number of  clinically relevant  endpoints in  patients with  type 2  diabetes, 
GWP42004,  an  oral  cannabinoid  treatment,  showed  consistent  evidence  of 
anti-diabetic effects. These  findings are consistent  with pre-clinical  data 
showing that GWP42004 protects the  insulin-producing cells of the  pancreatic 
islets, a highly desirable feature of a new anti-diabetic medicine,  increases 
insulin sensitivity, and reduces  fasting plasma glucose  levels. GW will  now 
move ahead and explore the clinical relevance of these desirable anti-diabetic
features of a range of doses of GWP42004 in a larger Phase II study.

Initial findings from a separate pilot study exploring the effect of  GWP42003 
on liver fat  in 24 patients  with Non-alcoholic Fatty  Liver Disease has  not 
showed any meaningful clinical effect.  A third Phase IIa study  investigating 
whether GWP42003 and GWP42004  can prevent weight gain  in 60 patients  taking 
anti-psychotic therapy has been unsuccessful in achieving a sufficient pace of
patient recruitment. In  light of the  positive findings for  GWP42004 in  the 
type 2 diabetes  study, it has  been decided  to terminate this  study and  to 
re-focus our anti-psychotic clinical research  on investigating GWP42003 as  a 
treatment for psychiatric illness.  A Phase II study  is in planning for  2013 
(see below).

Ulcerative Colitis

Following pre-clinical research demonstrating that cannabinoids show potential
in the treatment of Inflammatory Bowel Disease in standard in vivo models,  GW 
commenced this year a Phase IIa clinical study investigating the efficacy  and 
safety of GWP42003 in the treatment of ulcerative colitis. This study aims  to 
include 62 patients and the chief investigator is Dr Peter Irving at Guy's and
St Thomas's Hospital,  London. This  trial is expected  to report  preliminary 
results in mid-2013.

Otsuka Funded Research

GW's research  activities in  the  field of  CNS  disorders and  oncology  are 
supported by income  from the global  cannabinoid research collaboration  with 
Otsuka. This collaboration  was originally signed  in July 2007  with a  three 
year term, and was extended for a  further three years to June 2013. To  date, 
Otsuka's total investment in GW's research activities under this collaboration
totals £21.8m.


A major focus  of the  GW-Otsuka research collaboration  lies in  the area  of 
cancer treatment. Pre-clinical studies are most advanced in the specific areas
of glioma and breast cancer.

In light of  our promising pre-clinical  research in glioma  (the most  common 
form of brain cancer), GW has received interest from clinicians in  conducting 
an early proof  of concept  clinical trial.  A phase  Ib/IIa study  is due  to 
commence in  2013 which  will  evaluate GW  cannabinoids in  combination  with 
temozolomide in patients with recurrent glioblastoma, the most common form  of 
brain cancer.

We have  identified  the putative  mechanism  of action  for  cannabinoids  in 
glioma,  where  autophagy  and  programmed  cell  death  are  stimulated   via 
inhibition of the akt/mTORC1 axis. In vivo studies have shown cannabinoids to
have a synergistic effect with temozolomide, a standard treatment for glioma.

GW has also generated promising pre-clinical research evaluating  cannabinoids 
in the treatment of breast cancer. Efforts are now focused on identifying  the 
precise molecular mechanism of action of cannabinoids in breast cancer, and to
define the optimum cannabinoid treatment regimen.


The second major area of focus in the GW-Otsuka research collaboration lies in
nervous system disorders, primarily epilepsy and psychiatric illness.

In the area of epilepsy, a  lead candidate, GWP42006, has been identified  and 
is  supported   by   strong  intellectual   property.Additional   confirmatory 
pre-clinical tests are under  way prior to  progression into clinical  trials. 
Plans are now in place  for GWP42006 to enter  Phase I clinical trials  during 

GWP42006 has shown the  ability to treat seizures  in models of epilepsy  with 
significantly fewer  side effects  than existing  anti-epileptic drugs.  In  a 
paper published in September  2012 in the British  Journal of Pharmacology  by 
scientists at the  University of Reading,  GWP42006 was reported  to have  the 
potential  to  prevent  more   seizures,  with  few   side  effects  such   as 
uncontrollable shaking, caused by many existing anti-epileptic drugs (Hill AJ,
et al. 2012, Cannabidivarin is anticonvulsant in mouse and rat in vitro and in
seizure models,Br J  Pharmacol). In the  study, GWP42006 strongly  suppressed 
seizures in six different experimental  models commonly used in epilepsy  drug 
discovery. GWP42006 was also found to work when combined with drugs  currently 
used to control epilepsy.

As mentioned above, plans are now underway for a Phase II trial  investigating 
GWP42003 as a treatment for psychiatric illness. This trial is due to commence
in 2013. There  is extensive laboratory  evidence in human  and animal  models 
indicating that GWP42003 has  antipsychotic activity, including both  dopamine 
and glutamate  models  of  psychosis, studies  targeting  endophenotypes,  and 
sophisticated  naturalistic  observations.  Pre-clinical  data  generated   by 
GW/Otsuka shows that GWP42003  has the potential not  only to enhance  symptom 
improvement,  but  also   to  reduce  the   unwanted  motor  side-effects   of 
antipsychotic agents. Importantly, unlike current anti-psychotic  medications, 
the mechanism of GWP42003 does  not rely on the  dopamine D2 receptor for  its 
effect  offering   the  prospect   of  augmenting   the  effect   of   current 
anti-psychotics without the side effect profile of such treatments. 



Total revenues, at £33.1m, were £3.5m higher than the £29.6m recorded in 2011.
This reflects  increased milestone  income  and increased  R&D fees  from  our 
Sativex development partners.

Milestone income of  £9.8m (2011:  £5.3m) resulted  from an  amendment to  the 
Almirall licence agreement signed in March 2012. In return for GW's  agreement 
to reduce the Sativex  supply price for  an agreed period,  and in return  for 
waiving certain future cancer pain related milestones, Almirall agreed to  pay 
a milestone  of £9.8m  upon achievement  of a  Phase III  cancer pain  patient 
recruitment target.  The target  was achieved  in April  and the  payment  was 
subsequently received in May 2012. The prior year's milestone income comprised
a £2.5m milestone from Almirall upon achievement of Spanish pricing  approval, 
£0.25m upon  German  approval  and  £2.55m  milestone  from  Otsuka  upon  the 
commencement of Phase III cancer pain trials.

Sativex has made  good progress during  the year. The  volume of Sativex  10ml 
vials sold in-market  by our  partners increased year  on year  by 108%.  This 
principally reflects  the growth  achieved by  Almirall in  Germany and  Spain 
during 2012. We  can expect  continued growth as  Almirall conduct  commercial 
launches in up to 12 new countries during 2013.

GW's Sativex sales revenues are based on the volume of vials delivered to  our 
commercial partners during  the financial year.  As there were  no major  new 
territory launches in  this period,  our Sativex revenues  decreased to  £2.5m 
(2011: £4.4m). This  is in  line with  guidance provided  at the  time of  our 
interim results. We  delivered substantial  launch stocks to  Almirall in  the 
second half of 2011 which have been used to meet in-market demand during 2012.
As partner inventory levels reduce, we can expect Sativex deliveries to result
in an upward trend in GW's revenues as in-market sales continue to grow.

Licence, collaboration  and  technical access  fee  revenues of  £1.3m  (2011: 
£3.8m) consist of revenue recognised from signature and technical access  fees 
received in previous years. The £2.5m reduction compared to 2011 reflects  the 
fact that 2011 included a £1.9m technical access fee, received upon  signature 
of the Sativex licence for Australia, Middle-East and Africa in that year. The
remaining £0.6m  reduction  is  due to  a  reduction  in the  rate  of  income 
recognition on the Otsuka licence fee.  This was being recognised at the  rate 
of £1.1m per year for the first  4.5 years of the licence agreement,  reducing 
to £0.3m per year for the remainder of the licence. This step-down in the rate
of income recognition took effect from the start of the 2012 financial year.

Research and development fee revenues have increased to £19.5m (2011: £16.0m).
These fees  consist of  research  and development  costs  incurred by  GW  and 
charged to Otsuka under the Sativex US development agreement, totalling £14.1m
(2011: £10.8m) and the global cannabinoid research collaboration agreement  of 
£5.4m (2011: £5.2m). The growth in US development fees reflects progress  with 
patient recruitment into the  Phase III cancer pain  trials, which are  wholly 
funded by Otsuka.

Research & Development Expenditure

Total research and development expenditure, which is expensed as incurred, was
£27.6m (2011: £22.7m), of  which £19.5m (2011: £16.0m)  was funded by  Otsuka. 
Otsuka-funded research  includes  both  the  Sativex  Phase  III  cancer  pain 
programme as  well as  pre-clinical research  in CNS  and oncology.  GW-funded 
research totalled £8.1m (2011: £6.7m) representing 29% (2011: 29%) of  overall 
research and development spend.

Research and development expenditure  is stated net of  a £1.3m credit  (2011: 
£0.4m credit) arising from the reduction to our provision for inventories,  in 
recognition of the increasing net realisable value of our surplus inventory as
our Sativex forward sales estimates increase.

Segmental Results

In Note 3, a segmental analysis of our business is provided showing the income
statement split  into  the  three  business segments  of  the  Group:  Sativex 
Commercial, Sativex R&D and Pipeline R&D.

The Sativex  Commercial business  generated a  contribution of  £14.1m  (2011: 
£12.5m) from product sales, milestones and licence fee revenues received  from 
commercial partners.

Investment in Sativex R&D was £18.4m (2011: £14.8m), of which £14.1m  (£10.8m) 
was Otsuka  funded Phase  III  cancer pain  expenditure. The  remaining  £4.3m 
(2011: £4.0m) was funded by GW.

Investment in Pipeline  R&D was £9.9m  (2011: £7.8m), of  which Otsuka  funded 
£5.4m (2011: £5.2m). The remaining £4.5m (2011: £2.6m) was funded by GW.


Management and administration  expenditure increased to  £3.7m (2011:  £3.3m). 
This includes £0.6m (2011: £0.4m) of share-based payment charges.

Interest income of £0.2m in 2012  (2011: £0.3m) represents interest earned  on 
cash deposits.  GW  continues to  take  a conservative  approach  to  managing 
counterparty credit risk on its cash deposits.


The Group plans to submit a research and development tax credit claim for  the 
year ended 30  September 2012 of  £0.8m (2011: £nil).  A taxation  recoverable 
debtor of £0.8m has  therefore been recognised on  the September 2012  balance 

The £1.2m  tax  credit shown  in  the  2012 income  statement  includes  £0.4m 
successfully claimed in respect  of a 2011 claim,  plus the accrued credit  of 
£0.8m in respect of 2012. This 2012 credit remains subject to the agreement of
the Inland Revenue.

GW welcomes  the forthcoming  implementation of  the Government's  patent  box 
scheme. Under this  scheme, we expect  most of GW's  future product  revenues, 
milestone income and licence fees to be eligible for the 10% rate of taxation.
The combination of this low rate of taxation and enhanced expenditure  reliefs 
available under the  R&D tax credit  scheme should result  in a long-term  low 
rate of future corporation tax.


Pre-tax profit for  the year was  £1.2m (2011:  £2.5m). This is  in line  with 

This was  further  increased  by  the research  and  development  tax  credit, 
resulting in a post-tax profit for the year of £2.5m (2011: £2.7m).

Cash Flow

The Group  recorded a  net cash  inflow for  the year  of £1.0m  (2011:  £3.1m 

Receipts include £9.8m of milestone income (2011: £5.3m) from Almirall and the
exercise of share options by GW staff which generated proceeds of £0.1m (2011:

Capital expenditure of £1.3m (2011: £0.9m) consisted mainly of upgrades to our
research  and  development  premises  and  new  laboratory  and  manufacturing 

Financial Position

The Group's net  funds comprise cash  balances together with  amounts held  on 
short term deposit totalling £29.3m (2011: £28.3m).

Inventory of £3.5m (2011: £1.4m) consists of finished goods, consumable  items 
and work in  progress and is  stated net  of a realisable  value provision  of 
£2.1m (2011:£3.4m).  This  provision  is calculated  in  accordance  with  the 
inventory accounting policy set out in Note 2.

Trade and other  receivables at 30  September 2012 were  £1.6m (2011:  £2.3m), 
consisting of £0.8m (2011: £1.5m) of trade debtors (from sales of Sativex) and
£0.8m (2011: £0.8m) of other receivables and prepayments.

At 30 September  2012 the Group  had received £1.1m  (2011: £2.1m) of  advance 
payments for research activities to be carried out on behalf of Otsuka in  the 
next six  months. This  has been  disclosed as  an advance  payment  received, 
within deferred revenue due within one year.

Deferred licence, collaboration  and technical  access fee  income amounts  to 
£11.5m (2011: £12.7m)  and represents  the balance  of non-refundable  Sativex 
licence agreement and technical access fees.  £1.4m (2011: £1.3m) is shown  as 
due within one year and £10.1m (2011: £11.4m) is shown as due after more  than 
one year and. These will be recognised as revenue in future periods.

Average headcount of the Group for the year was 177 (2011: 152). The  increase 
in staff numbers reflects the expansion of operations necessary to support the
commercial growth  of  Sativex  and  the increasing  levels  of  research  and 
development activity for both  Sativex and our  growing pipeline of  promising 
product candidates.

2013 Guidance:


As Sativex increases its market penetration and undergoes further launches, GW
can expect  to look  forward to  continued growth  in in-market  sales by  our 
commercial partners.

GW's sales  revenues are  generated  as sales  of  bulk product  to  licensing 
partners. As a result, and as  previously indicated, the rate of GW's  product 
sales growth in the next few years is likely to be influenced by a variety  of 
factors, including  the  timing of  new  commercial launches,  the  timing  of 
delivery of batches to partners,  partner stock-holding policies, pricing  and 
reimbursement discussions, and the rate of market uptake.

Having successfully achieved a large number of additional approvals in  Europe 
during 2012, we expect  further commercial launches in  up to twelve  European 
countries during 2013. These launches,  together with sales from countries  in 
which Sativex is already marketed, are expected to translate into growth in GW
sales revenues in 2013.

R&D Spend

As a result  of GW's strategic  decision to advance  further pipeline  product 
candidates into clinical development,  we expect GW-funded  R&D spend for  the 
coming year to increase by 10-20% over 2012.


In early 2013, Sativex pricing  approval in Italy is  expected to result in  a 
£0.25m milestone  payment from  Almirall. No  other milestones  from  existing 
Sativex licence agreements  are currently expected  during the 2013  financial 


In the  last few  years, significant  milestone income  receipts from  Sativex 
licence agreements have led to the  Group reporting small pre-tax profits.  In 
line with  market expectations,  we are  not expecting  significant  milestone 
receipts in 2013 and this factor,  together with our increasing investment  in 
the pipeline, leads us to expect to report a loss for the 2013 financial year.
This is consistent  with market  expectations and  is in  accordance with  our 
strategic plan to  create long-term value  from our pipeline  by investing  in 
R&D. It should be noted that a loss  in 2013 should enable the Group to  claim 
an R&D tax credit for the year.


On June 1^st 2012, Adam George became GW's Finance Director, having previously
served as GW's Company  Secretary and Group  Financial Controller since  2007. 
This followed David Kirk's decision to stand down from the Board having served
as Finance Director for the last ten years.

In addition, on October 1^st 2012, Chris  Tovey joined the Board in the  newly 
created role  of Chief  Operating Officer.  The decision  to appoint  a  Chief 
Operating Officer reflects the significant expansion in the Group's operations
over recent years.  Chris was  most recently Vice  President Global  Marketing 
Operations  at  UCB  Pharmaceuticals,  responsible  for  worldwide   marketing 
activities on a portfolio of UCB products generating over €2 billion in annual
sales. His previous experience includes 18 years at GlaxoSmithKline in  senior 
commercial roles in both the European and UK organisations.

At our  forthcoming Annual  General  Meeting on  18^th January  2013,  Richard 
Forrest, a non-executive  director, will  be retiring by  rotation. After  six 
years of service, Richard has chosen not to seek re-election at the AGM for  a 
third 3-year term and will therefore formally step down from the Board on that
date. The Nominations  Committee has  commenced the process  of identifying  a 
suitable independent non-executive director candidate  to be appointed in  his 
place and  aims  to  make  this appointment  as  soon  as  possible  following 
Richard's retirement. The company would like to take this opportunity to thank
Richard for his valuable contribution to the Board over the last six years.


GW has  made strong  progress in  2012. We  are pleased  with the  significant 
growth of Sativex in-market sales and  look forward to further launches in  up 
to 12 countries in Europe next year.  In addition, we are now undertaking  our 
largest ever clinical programme to  expand the market opportunity for  Sativex 
beyond MS to  cancer pain. This  programme comprises three  global Phase  III 
cancer pain trials and  is fully funded by  our partner, Otsuka.  Importantly, 
success in this indication is intended to lead to our first commercial  launch 
in the  US  market. Our  strong  financial position  allows  us to  invest  in 
advancing our product  pipeline and  we are  encouraged by  the positive  data 
reported today from our first Phase II trial for GWP42004, a novel cannabinoid
drug candidate, in type  2 diabetes. We look  forward to progressing this  and 
other early stage clinical programmes in 2013.

This news  release may  contain forward-looking  statements that  reflect  GWs 
current  expectations  regarding  future  events,  including  development  and 
regulatory clearance of the GW's products. Forward-looking statements  involve 
risks and uncertainties.  Actual events  could differ  materially from  those 
projected herein and depend  on a number of  factors, including (inter  alia), 
the success  of  the  GW's  research  strategies,  the  applicability  of  the 
discoveries  made   therein,  the   successful   and  timely   completion   of 
uncertainties related  to  the  regulatory  process,  and  the  acceptance  of 
Sativex^®and other products by consumer and medical professionals.

GW Pharmaceuticals plc

Consolidated income statement

For the year ended 30 September 2012

                                                      Year ended   Year ended
                                                    30 September 30 September
                                              Notes         2012         2011
                                                          £000's       £000's
Revenue                                         3         33,120       29,627
Cost of sales                                              (839)      (1,347)
Gross profit                                              32,281       28,280
Research and development expenditure            4       (27,578)     (22,714)
Management and administrative expenses                   (3,660)      (3,298)
Operating profit                                           1,043        2,268
Interest payable                                             (1)          (3)
Interest income                                              200          263
Profit on ordinary activities before taxation              1,242        2,528
Tax credit on ordinary activities               6          1,248          221
Profit on ordinary activities after taxation               2,490        2,749
Earnings per share                              

- basic                                         

                                                7           1.9p         2.1p
- diluted                                       7           1.8p         2.0p

All activities relate to continuing operations.

The Group has no gains or losses other than those shown above and therefore no
separate statement of recognised income and expense has been presented.

GW Pharmaceuticals plc

Consolidated balance sheet

As at 30 September 2012

                                       30 September 30 September
                                 Notes         2012         2011
                                             £000's       £000's
Non-current assets
Intangible assets - goodwill                  5,210        5,210
Property, plant & equipment                   2,432        1,868
                                              7,642        7,078
Current assets
Inventories                        8          3,537        1,424
Taxation recoverable                            820            -
Trade and other receivables        9          1,588        2,281
Cash and cash equivalents                    29,335       28,319
                                             35,280       32,024
Total assets                                 42,922       39,102
Current liabilities
Trade and other payables          10        (9,114)      (6,562)
Obligations under finance leases                  -          (7)
Deferred revenue                  11        (2,449)      (3,459)
                                           (11,563)     (10,028)
Non-current liabilities
Deferred revenue                  11       (10,127)     (11,422)
Total liabilities                          (21,690)     (21,450)
Net assets                                   21,232       17,652
Share capital                     12            133          133
Share premium account^(1)                    65,947       65,866
Other reserves^(1)                           20,184       20,184
Retained earnings                          (65,032)     (68,531)
Shareholders' funds                          21,232       17,652

(1) The Group has reclassified certain equity account balances at 1  October 
2009. The impact of this reclassification was a decrease in the share  premium 
account and an  increase in other  reserves as presented  in the  consolidated 
balance sheet above, of £922,000  at 30 September 2011. This  reclassification 
had no impact on total equity or income for the year.

This announcement was approved by the Board of Directors on 27 November 2012.

GW Pharmaceuticals plc

Consolidated statement of changes in equity

For the year ended 30 September 2012

                                Called-up premium        Other Retained
                            share capital account reserves^(1) earnings  Total

                                   £000's  £000's       £000's   £000's £000's
At 1 October 2010^(1)                 131  64,433       20,184 (72,075) 12,673
Exercise of share options               2   1,433            -        -  1,435
Share-based payment                     -       -            -      795    795
Retained profit for the                 -       -            -    2,749  2,749
Balance at 30 September               133  65,866       20,184 (68,531) 17,652
Exercise of share options               -      81            -        -     81
Share-based payment                     -       -            -    1,009  1,009
Retained profit for the                 -       -            -    2,490  2,490
Balance at 30 September               133  65,947       20,184 (65,032) 21,232

(1) The Group has reclassified certain equity account balances at 1  October 
2009. The impact of this reclassification was a decrease in the share  premium 
account and an increase in  other reserves in the  amount of £922,000 at  this 
date. This reclassification had  no impact on total  equity or income for  the 

GW Pharmaceuticals plc

Consolidated cash flow statement

For the year ended 30 September 2012

                                                      Year ended   Year ended
                                                     30 September 30 September
                                                             2012         2011
                                                           £000's       £000's
Profit for the year                                         2,490        2,749
Adjustments for:
Interest expense                                                1            3
Interest income                                             (200)        (263)
Tax                                                       (1,248)        (221)
Depreciation of property, plant and equipment                 754          589
Other gains and losses                                      (202)            7
Increase in allowance for doubtful debts                       26            -
Decrease in inventory provision                           (1,300)        (425)
Share-based payment charge                                  1,009          795
                                                            1,330        3,234
Increase in inventories                                     (813)        (219)
Decrease / (Increase) in trade receivables and                609      (1,043)
other assets
Increase in trade and other payables                          247          168
Cash generated by operations                                1,373        2,140
Research and development tax credits received                 428          221
Net cash inflow from operating activities                   1,801        2,361
Investment activities
Interest received                                             258          244
Purchases of property, plant and equipment                (1,318)        (891)
Net cash from investing activities                        (1,060)        (647)
Financing activities
Proceeds on exercise of share options                          81        1,435
Interest paid                                                 (1)          (3)
Capital element of finance leases                             (7)         (39)
Net cash from financing activities                             73        1,393
Effect of foreign exchange rate changes                       202          (7)
Net increase in cash and cash equivalents                   1,016        3,100
Cash and cash equivalents at beginning of year             28,319       25,219
Cash and cash equivalents at end of year                   29,335       28,319

1. General Information

The financial  information set  out above  does not  constitute the  company's 
statutory accounts  for the  years ended  30 September  2012 or  2011, but  is 
derived from those accounts. Statutory  accounts for 2011 have been  delivered 
to the Registrar of Companies and  those for 2012 will be delivered  following 
the Company's Annual  General Meeting.  The auditors have  reported on  those 
accounts; their  reports  were unqualified,  did  not draw  attention  to  any 
matters by way of emphasis without qualifying their report and did not contain
statements under section s498(2) or (3) Companies Act 2006.

The Board of Directors of the  Company approved this statement on 27  November 

2. Accounting Policies

The principal Group accounting policies are summarised below.

Basis of Accounting

The financial statements,  upon which  this announcement is  based, have  been 
prepared  in  accordance  with  International  Financial  Reporting  Standards 
(IFRSs). The financial statements have  also been prepared in accordance  with 
IFRSs as endorsed  by the  European Union  and therefore  the Group  financial 
statements comply with Article  4 of the EU  IAS regulation and in  accordance 
with IFRS as issued by the International Accounting Standards Board ("IASB").

The  financial  statements  have  been  prepared  under  the  historical  cost 
convention, except for  the revaluation of  financial instruments.  Historical 
cost is  generally based  on the  fair  value of  the consideration  given  in 
exchange for the assets. The principal accounting policies are set out below.

Going Concern

The Directors have considered  the financial position of  the Group, its  cash 
position and forecast cash flows for the twelve month period from the date  of 
signing these financial statements when  considering going concern. They  have 
also considered the Group's business activities, the key policies for managing
financial risks and the  key factors affecting the  likely development of  the 
business in 2013. In the light of this review, the Directors have a reasonable
expectation that the Company and the Group have adequate resources to continue
in  operational  existence  for  the  foreseeable  future.  Accordingly,  they 
continue to  adopt  the  going  concern basis  in  preparing  these  financial 
statements despite the uncertain economic climate.

Basis of Consolidation

The consolidated financial statements incorporate the financial statements  of 
the Company and entities controlled by the Company (its subsidiaries) made  up 
to 30 September each year. Subsidiaries are all entities over which the  Group 
has the power  to govern the  financial and operating  policies of the  entity 
concerned, generally accompanying a shareholding of more than one half of  the 
voting rights.

Intangible Assets - Goodwill

Goodwill arising in a  business combination is recognised  as an asset at  the 
date that control is acquired. Goodwill is measured as the excess of the  sum 
of consideration transferred,  the amount of  any non-controlling interest  in 
the acquiree  and the  fair value  of the  acquirer's previously  held  equity 
interest (if any) in the entity over  the net of the acquisition date  amounts 
of the identifiable assets and liabilities assumed.

Goodwill is not amortised but is tested for impairment at least annually.


The Group's revenue arises from  product sales, licensing fees,  collaboration 
fees, technical access fees, development and approval milestone fees, research
and development  fees  and  royalties.  Agreements  with  commercial  partners 
generally include a  non-refundable up-front licence  and collaboration  fees, 
milestone payments, the receipt of which is dependent upon the achievement  of 
certain clinical, regulatory or commercial milestones, as well as royalties on
product sales of licensed products, if and when such product sales occur.  For 
these agreements, total arrangement consideration is attributed to  separately 
identifiable components  on  a reliable  basis  that reasonably  reflects  the 
prices that might be expected to be achieved in stand-alone transactions.  The 
then allocated consideration is recognised  as revenue in accordance with  the 
principles described below.

Product Sales

Revenue from the sale of products is recognised when the Group has transferred
to the buyer the significant risks and rewards of ownership of the goods,  the 
Group no  longer has  effective control  over the  goods sold,  the amount  of 
revenue and costs associated  with the transaction  can be measured  reliably, 
and it  is probable  that  the Group  will  receive future  economic  benefits 
associated with  the transaction.  Product  sales have  no rights  of  return. 
Provisions for rebates  are established in  the same period  that the  related 
sales are recorded.

Licensing Fees

Licence fees  received in  connection with  product out-licensing  agreements, 
even where such fees are non-refundable, are deferred and recognised over  the 
period of the licence term.

Collaboration Fees

Collaboration fees are deferred and recognised as services are rendered  based 
on the percentage of completion method.

Technical Access Fees

Technical access  fees  represent amounts  charged  to licensing  partners  to 
provide access to, and to commercially  exploit data that the Group  possesses 
or which can be expected to result from Group research programmes that are  in 
progress. Non-refundable technical  access fees that  involve the delivery  of 
data that the Group possesses and that permit the licensing partner to use the
data freely and where  the Group has no  remaining obligations to perform  are 
recognised as revenue  upon delivery  of the  data. Non-refundable  technical 
access fees relating  to data  where the  research programme  is on-going  are 
recognised based on the percentage of completion method.

Development and Approval Milestone Fees

Development and approval milestone fees are recognised as revenue based on the
percentage of completion  method on  the assumption  that all  stages will  be 
completed successfully,  but with  cumulative  revenue recognised  limited  to 
non-refundable amounts already received or reasonably certain to be received.

Research and Development Fees

Revenue from partner  funded contract research  and development agreements  is 
recognised as research and development  services are rendered. Where  services 
are in-progress at period end, the Group recognises revenues  proportionately, 
in line  with  the  percentage  of  completion  of  the  service.  Where  such 
in-progress services  include  the  conduct  of  clinical  trials,  the  Group 
recognises revenue in line with the stage of completion of each trial so  that 
revenues are recognised in line with the expenditures.

Research and Development

Expenditure on research and development activities is recognised as an expense
in the period in which it is incurred.

An internally generated intangible asset arising from the Group's  development 
activities is recognised only if the following conditions are met:

- an asset is created that can be identified

- it is  probable that  the asset  created will  generate future  economic 
benefits, and

- the development cost of the asset can be measured reliably.

The Group has  determined that regulatory  approval is the  earliest point  at 
which the probable  threshold can  be achieved. All  research and  development 
expenditure incurred  prior  to  achieving regulatory  approval  is  therefore 
expensed as incurred.

Property, Plant and Equipment

Property,  plant  and  equipment  are  stated  at  cost,  net  of  accumulated 
depreciation and any recognised impairment  loss. Depreciation is provided  so 
as to write off the cost of assets, less their estimated residual values, over
their useful lives using the straight line method, as follows:

Motor vehicles                     4 years
Plant, machinery and lab equipment 4-10 years
Office and IT equipment            4 years
Leasehold improvements             5-10 years or term of the lease if shorter


Inventories are stated at the lower of cost and net realisable value. Cost  is 
calculated using the  weighted average cost  method. Cost includes  materials, 
direct labour,  depreciation  of  manufacturing  assets  and  an  attributable 
proportion of manufacturing overheads based on normal levels of activity.  Net 
realisable value is the estimated selling  price, less all estimated costs  of 
completion and costs to be incurred in marketing, selling and distribution.

If net  realisable value  is lower  than  the carrying  amount, a  write  down 
provision is recognised for  the amount by which  the carrying amount  exceeds 
its net realisable value.

Inventories manufactured prior  to regulatory approval  are capitalised as  an 
asset but  provided  for until  there  is  a high  probability  of  regulatory 
approval of the product.  At the point when  a high probability of  regulatory 
approval is obtained, the  provision is adjusted  appropriately to adjust  the 
carrying value to expected net realisable value, which may not exceed original

Adjustments  to  the  provision  against  inventories  manufactured  prior  to 
regulatory approval are recorded  as a component  of research and  development 
expenditure. Adjustments to the  provision against commercial product  related 
inventories manufactured  following  achievement of  regulatory  approval  are 
recorded as a component of cost of goods.


The tax expense represents the sum of the tax currently payable or recoverable
and deferred tax.

The tax  payable or  recoverable is  based  on taxable  profit for  the  year. 
Taxable profit differs from net profit as reported in the consolidated  income 
statement because it excludes items of  income or expense that are taxable  or 
deductible in other years and it further excludes items that are never taxable
or deductible. The Group's liability for  current tax is calculated using  tax 
rates and laws that have been enacted or substantively enacted by the  balance 
sheet date.

Deferred tax is the tax expected  to be payable or recoverable on  differences 
between carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable profit, and
is accounted  for  using the  balance  sheet liability  method.  Deferred  tax 
liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised only to the extent that it is probable that
taxable  profits  will  be   available  against  which  deductible   temporary 
differences can be utilised. Such  assets and liabilities are not  recognised 
if the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of  assets 
and liabilities in a transaction that  affects neither the taxable profit  nor 
the accounting profit.

Deferred tax  liabilities are  recognised  for taxable  temporary  differences 
arising on investments in subsidiaries and associates, and interests in  joint 
ventures, except  where the  Group is  able  to control  the reversal  of  the 
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.

The carrying amount of deferred tax  assets is reviewed at each balance  sheet 
date and reduced to the extent that  it is no longer probable that  sufficient 
taxable profits will  be available to  allow all or  part of the  asset to  be 

Deferred tax is calculated at the tax rates that are expected to apply in  the 
period when the liability  is settled or  the asset is  realised based on  tax 
laws and rates that have been enacted at the balance sheet date. Deferred  tax 
is charged or  credited in  the income statement,  except when  it relates  to 
items charged or  credited in other  comprehensive income, in  which case  the 
deferred tax is also dealt with in other comprehensive income.

Deferred tax  assets  and liabilities  are  offset  when there  is  a  legally 
enforceable  right  to  set  off  current  tax  assets  against  current   tax 
liabilities and when they relate to  income taxes levied by the same  taxation 
authority and  the  Group  intends  to  settle  its  current  tax  assets  and 
liabilities on a net basis.

Earnings per Share

Basic earnings or loss per share represents  the profit or loss for the  year, 
divided by the weighted average number of ordinary shares in issue during  the 
year, excluding the weighted average number of ordinary shares held in the  GW 
Pharmaceuticals All  Employee Share  Scheme (the  "ESOP") during  the year  to 
satisfy employee share awards.

Diluted earnings or loss per share represents the profit or loss for the year,
divided by the weighted average number of ordinary shares in issue during  the 
year, excluding the weighted average number of shares held in the ESOP  during 
the year to satisfy employee share awards, plus the weighted average number of
dilutive shares resulting from share  options or warrants where the  inclusion 
of these would not be antidilutive.

Share-based Payment

Equity-settled share-based payments to employees and others providing  similar 
services are measured at fair value (excluding the effect of non-market  based 
vesting conditions) at the date of grant.

The fair value determined at the grant date of the equity-settled  share-based 
payments is expensed on a straight-line  basis over the vesting period,  based 
on the Group's estimate of shares  that will eventually vest. At each  balance 
sheet date, the Group revises its estimate of the number of equity instruments
expected to  vest  as a  result  of the  effect  of non-market  based  vesting 
conditions. The impact of the revision  of the original estimates, if any,  is 
recognised in profit  or loss such  that the cumulative  expense reflects  the 
revised estimate, with a corresponding adjustment to equity reserves.

Equity-settled  share-based  payment  transactions  with  parties  other  than 
employees are measured at  the fair value of  the goods or services  received, 
except where that fair value cannot be estimated reliably, in which case  they 
are measured at the fair value of the equity instruments granted, measured  at 
the date of grant.

3. Business Segments

Information reported to  the Group's Board  of Directors for  the purposes  of 
resource allocation and assessment  of segment performance  is focused on  the 
stage of product development. The Group's reportable segments are as follows:

· Sativex  Commercial: The  Sativex Commercial  segment promotes  Sativex 
through strategic collaborations with  major pharmaceutical companies for  the 
currently approved indication  of spasticity  due to  MS. Sativex  Commercial 
segment revenues include  product sales,  and licensing  fees in  the form  of 
licence  collaboration,  technical  access  fees,  development  and   approval 
milestones and sales milestones.

· Sativex Research and Development: The Sativex Research and  Development 
segment seeks to maximise the potential of Sativex through the development  of 
new indications. The current focus for this segment is the Phase III  clinical 
development program of Sativex  for use in treatment  of cancer pain.  Sativex 
research and development segment revenues consist of research and  development 
fees charged to Sativex licensees.

·  Pipeline  Research   and  Development:  The   Pipeline  Research   and 
Development segment  seeks  to  develop  cannabinoid  medications  other  than 
Sativex across a range of therapeutic areas using our proprietary  cannabinoid 
technology platform and partnerships with international scientists. The  Group 
has two product candidates  in Phase II  trials in the  field of diabetes  and 
inflammation, as well as pre-clinical research programs evaluating the use  of 
selected cannabinoids for  the treatment of  glioma, epilepsy and  psychiatric 
illness. Pipeline  Research  and  Development  segment  revenues  consist  of 
research and  development  fees charged  to  Otsuka  under the  terms  of  our 
pipeline research collaboration agreement.

The accounting policies of the reportable segments are the same as the Group's
accounting policies described in Note 2. Segment result represents the  result 
of each segment without allocation of share-based payment expenses and  before 
management and  administrative  expenses, interest  expense,  interest  income 
receivable and tax.  This is  the measure reported  to the  Group's Board  of 
Directors for the  purpose of  resource allocation and  assessment of  segment 

No measures of  segment assets  and segment  liabilities are  reported to  the 
Board of Directors  in order  to assess performance  and allocate  resources. 
Intersegment activity has been eliminated. There are no intersegment sales and
all revenue is generated from external customers.

For the Year Ended 30 September 2012


                                                   Total Unallocated            
                        Sativex                 reportable                        
                                                             year ended
                     Commercial  Sativex Pipeline   segments             Consolidated
                                     R&D      R&D                   2012
                     year ended                        year              year ended
                                   year    year      ended       £'000
                           2012    ended    ended                                2012
                          £'000     2012     2012                               £'000
                                   £'000    £'000
Product sales             2,514        -        -      2,514           -        2,514
Research and                  -   14,080    5,420     19,500           -       19,500
development fees
Licence,                  1,294        -        -      1,294           -        1,294
collaboration and
technical access
Development and           9,812        -        -      9,812           -        9,812
approval milestone
Total revenue            13,620   14,080    5,420     33,120           -       33,120
Cost of sales             (839)        -        -      (839)           -        (839)
Research and              1,300 (18,415)  (9,904)   (27,019)       (559)     (27,578)
Segmental result         14,081  (4,335)  (4,484)      5,262       (559)        4,703
Management and administrative expenses                                        (3,660)
Operating profit                                                                1,043
Interest expense                                                                  (1)
Interest income                                                                   200
Profit before tax                                                               1,242
Tax                                                                             1,248
Profit for the year                                                             2,490

For the Year Ended 30 September 2011



                        Sativex                 reportable Unallocated            

                     Commercial  Sativex Pipeline   segments       costs Consolidated
                                     R&D      R&D
                     year ended                        year year ended  year ended
                                   year    year      ended
                           2011    ended    ended                   2011         2011
                          £'000     2011     2011                  £'000        £'000
                                   £'000    £'000
Product sales             4,409        -        -      4,409           -        4,409
Research and                  -   10,822    5,216     16,038           -       16,038
development fees
Licence,                  3,843        -        -      3,843           -        3,843
collaboration, and
technical access
Development and           5,337        -        -      5,337           -        5,337
approval milestone
Total revenue            13,589   10,822    5,216     29,627           -       29,627
Cost of sales           (1,347)        -        -    (1,347)           -      (1,347)
Research and                266 (14,757)  (7,834)   (22,325)       (389)     (22,714)
Segmental result         12,508  (3,935)  (2,618)      5,955       (389)        5,566
Management and administrative expenses                                        (3,298)
Operating profit                                                                2,268
Interest expense                                                                  (3)
Interest income                                                                   263
Profit before tax                                                               2,528
Tax                                                                               221
Profit for the year                                                             2,749

Geographical analysis of revenue:

                        Year ended   Year ended
                      30 September 30 September
                              2012         2011
                            £000's       £000's
UK                             248        1,469
Europe (excluding UK)       12,712       10,317
North America               14,274       11,830
Canada                         436          795
Asia                         5,450        5,216
                            33,120       29,627

All revenue and profits before taxation originated in the UK. All assets and
liabilities are held in the UK.

4. Research and Development Expenditure

                                      Year ended   Year ended
                                    30 September 30 September
                                            2012         2011
                                          £000's       £000's
GW-funded research                         8,078        6,676
Development partner-funded research       19,500       16,038
Total                                     27,578       22,714

5. Share-based Payment

Charges for share-based payment have been allocated to the research and
development and management and administrative expenses lines of the
consolidated income statement as follows:

                                         Year ended   Year ended
                                       30 September 30 September
                                               2012         2011
                                             £000's       £000's
Research and development expenditure            450          389
Management and administrative expenses          559          406
Total charge for the year                     1,009          795

In previous periods, share-based payment was  disclosed as a separate line  on 
the face of the income statement. This presentational change has resulted in a
restatement of the prior year comparatives to reflect this amendment.

6. Tax Credit

                                        Year ended   Year ended
                                      30 September 30 September
                                              2012         2011
                                            £000's       £000's
UK Corporation tax - R&D tax credit:
UK Corporation tax credit                    (820)            -
Adjustments in respect of prior years        (428)        (221)
Total credit for the period                (1,248)        (221)

The UK Corporation tax credit relates to research and development  expenditure 
claimed under the Finance Act 2000.

At 30 September 2012 the Group had  tax losses available for carry forward  of 
approximately £40.9m (2011:  £46.0m). The Group  has not recognised  deferred 
tax assets relating to carried  forward losses, of approximately £9.4m  (2011: 
£11.4m). In  addition,  the  Group  has not  recognised  deferred  tax  assets 
relating to  other  temporary  differences  of  £0.3m  (2011:  £0.4m).  These 
deferred tax  assets  have  not  been recognised  as  the  Group's  management 
considers that there is insufficient future taxable income, taxable  temporary 
differences and feasible tax-planning strategies to overcome cumulative losses
and therefore it is probable that the relevant deferred tax assets will not be
realised in full.

7. Earnings per Share

The calculations of earnings per share are based on the following data:

                                                        2012       2011
                                                      £000's     £000's


Profit for the financial year - basic and diluted      2,470      2,749     
                                                             Number of shares
                                                        2012       2011
                                                           m          m
Weighted average number of ordinary shares             133.2      131.9
Less ESOP trust ordinary shares                        (0.2)      (0.2)
Weighted average number of ordinary shares                            

For purposes of basic earnings per shares              133.0      131.7     

Effect of potentially dilutive shares arising from                        

Share options                                            4.5        3.9     
Effect of potentially  dilutive shares arising  from       -        0.2
Weighted average number of diluted ordinary shares                        

for purposes of diluted earnings per share             137.5      135.7     
Earnings per share - basic                              1.9p       2.1p
Earnings per share - diluted                            1.8p       2.0p

The weighted average number of shares in  2011 has been adjusted to take  into 
account the deduction of  the ESOP trust ordinary  shares and the addition  of 
the potentially  dilutive warrants.  This has  not impacted  basic or  diluted 
earnings per share.

8. Inventory

                 30 September 30 September
                         2012         2011
                       £000's       £000's
Raw Materials             312           70
Work in progress        2,951          771
Finished goods            274          583
                        3,537        1,424

Inventory is stated net of a provision for inventories, calculated in
accordance with the accounting policy set out in Note 2. The movement in the
provision for inventories is as follows:

                                                 30 September 30 September
                                                         2012         2011
                                                       £000's       £000's
Opening balance at 1 October                            3,431        3,856
Credited to research and development expenditure      (1,300)        (425)
                                                        2,131        3,431

Inventory with a carrying value of £2.3m is considered to be recoverable after
more than one year (2011: Nil).

9. Financial Assets

Trade and other receivables

                                             30 September 30 September
                                                     2012         2011
                                                   £000's       £000's
Amounts falling due within one year
Trade receivables                                     784        1,521
Provision for impairment - trade receivables         (26)            -
                                                      758        1,521
Other receivables                                     235          330
Prepayments and accrued income                        595          430
                                                    1,588        2,281

10. Financial Liabilities

Trade and other payables

                                   30 September 30 September
                                           2012         2011
                                         £000's       £000's
Trade payables                            4,090        2,381
Other taxation and social security          587          486
Other creditors and accruals              4,437        3,695
                                          9,114        6,562

11. Deferred Revenue

                                                    30 September 30 September

                                                             2012         2011
Amounts falling due within one year                        £000's       £000's
Deferred licence, collaboration and technical access        1,378        1,294
fee income
Advance payments received                                   1,071        2,165
                                                            2,449        3,459

Amounts falling due after one year
Deferred licence, collaboration and technical access       10,127       11,422
fee income

Deferred licence,  collaboration  and  technical access  fee  revenues  result 
mainly from the up-front licence fees  received in 2005 of £12.0 million  from 
Almirall S.A.  (deferred  revenue balance  as  at  30 September  2012  -  £6.6 
million, and 30 September 2011 - £7.4 million) and collaboration and technical
access  fees  from  other  Sativex  licensees.  Amounts  deferred  under  each 
agreement will be recognised in revenue as discussed in Note 2.

Advance payments  received represents  payments for  research and  development 
activities to be carried out in the  next financial year on behalf of  Otsuka. 
These amounts will be recognised as revenue in future periods as the  services 
are rendered.

12. Share Capital

As at 30 September 2012 the authorised share capital of the Company and the
allotted, called-up and fully paid amounts were as follows:

                                                              2012   2011
                                                            £000's £000's
200,000,000 ordinary shares of 0.1p each                       200    200

Allotted, called-up and fully paid
133,370,354 (2011:133,055,154) ordinary shares of 0.1p each    133    133


Changes to the number of ordinary shares in issue have been as follows:


                                               Total share
                        Number of   value          premium Total consideration

                           shares  £000's           £000's              £000's
As at 1 October 2010  131,197,792     131                -                   -
Exercise   of   share   1,857,362       2            1,433               1,435
As  at  30  September 133,055,154     133                -                   -
Exercise   of   share     315,200       -               81                  81
As  at  30  September 133,370,354     133

13. Availability of Information

A  copy  of  this  statement  is   available  from  the  company  website   at or from  the Company  Secretary at Porton  Down Science  Park, 
Salisbury, Wiltshire, SP4 0JQ.

                     This information is provided by RNS
           The company news service from the London Stock Exchange


FR GMMZMZNKGZZZ -0- Nov/28/2012 07:00 GMT
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