GW Pharmaceuticals, which focuses on the development of cannabinoid drugs, says that its net loss for the six months ended March 31 fell 36.4% to £4.2 million while revenues jumped to £5.7 million from £823,000.

The turnover rise was due to payments made by Otsuka Pharmaceuticals which is GW’s licensing partner in the USA for the UK firm’s flagship product Sativex (delta-9-tetrahydrocannabinol and cannabidiol). The firm ended the reporting period in a healthy position financially, with £18.5 million in cash.

However the stock stumbled slightly in April when a 339-patient Phase III study of Sativex as a treatment for neuropathic pain in multiple sclerosis sufferers reported disappointing results. Although 50% of Sativex patients experienced a pain reduction of at least 30%, the trial narrowly failed to reach statistical significance due to an unexpectedly large placebo response.

The latter effect appears related to dosing design, says GW, whereby patients were able to self-administer the oral spray at will. Analysis of the efficacy data at fixed dose levels demonstrates a “highly significant difference” between Sativex and placebo.

GW noted that importantly both the ongoing Phase III studies of Sativex in MS spasticity and cancer pain adopt a fixed target-dose approach with a view to limiting the potential for patients on placebo to dose differently from those on Sativex.

Those two trials are very much under the spotlight now, according to analysts at Edison Investment Research who say that the studies are on track. Results from both studies are due in the next 12 months and regulatory filings for Sativex in the European Union and the USA are possibilities in 2009 and 2010, respectively.

Those data “remain key triggers for the stock”, Edison notes and approvals would have the potential to trigger £13-£15 million in milestone payments. Apart from Otsuka, GW has licensing deals with Bayer (UK and Canada) and Almirall (Europe).