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Two of the hottest biotech stocks on the market right now are GW Pharmaceuticals (NASDAQ: GWPH) and Cara Therapeutics (NASDAQ: CARA). Shares of GW have soared more than 70% so far in 2019, while Cara is up more than 40%.
The two biotechs are at different places. GW Pharmaceuticals is busy with the launch of its second approved drug. Cara doesn't have a drug on the market yet but hopes to win approval for its lead candidate in the near future.
Which of these two stocks is the better pick for long-term investors? Here's how GW Pharmaceuticals and Cara Therapeutics stack up against each other.
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The case for GW Pharmaceuticals
Investors want growth. GW Pharmaceuticals should be able to give them what they want.
The company won FDA approval last year for Epidiolex in treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), both of which are rare forms of epilepsy. It marked the first FDA approval of a cannabis plant-based drug.
GW launched Epidiolex in the U.S. in November. So far, the cannabidiol (CBD) drug is off to a great start. The biotech reported Epidiolex better-than-expected sales of $4.7 million in its first two months on the market. But there are several reasons to think the situation will only get better for GW Pharmaceuticals in the coming quarters.
More states announced that Epidiolex will be covered under their Medicaid programs in January. GW is also continuing to reach out to more payers and physicians. And positive word of mouth among patients and physicians for the CBD drug is also likely to help increase sales.
The biotech also hopes to soon win European approval for Epidiolex. It's already getting ready for a major European launch of the drug.
In addition, GW could gain additional approvals in the U.S. and in Europe for other indications. The company could submit for FDA approval of Epidiolex in treating tuberous sclerosis complex by late 2019 if results from a phase 3 study are positive. GW is also close to starting another late-stage study of the drug in treating Rett syndrome, a neurological disorder caused by a non-inherited genetic mutation.
Several analysts think Epidiolex will be a blockbuster at its peak sales. Some expect peak annual sales of more than $2 billion. Other estimates are closer to $1 billion. It could help that the FDA recently refused to consider Zogenix's filing for approval of Fintepla in treating Dravet syndrome. The resulting delay should help GW firm up its market position for Epidiolex.
The case for Cara Therapeutics
Why consider buying Cara Therapeutics? Here's a one-word answer: Korsuva. The biotech's lead pipeline candidate is currently in a phase 3 study targeting treatment of chronic kidney disease-associated pruritis (CKD-aP) in patients on hemodialysis.