Monday 22 January 2018

Lynch-backed cannabis biotech firm raising €160m on Nasdaq

Nick Webb

Nick Webb

A biotech firm developing medicines derived from cannabis and backed by former Elan executive Tom Lynch, is raising €160m from investors on Nasdaq to fund a multi-front research and development programme and roll out new products derived from the plants.

The €2.2bn-valued company is issuing new shares to investors later this week. Morgan Stanley, BofA Merrill Lynch and Cowen and Company are advising GW Pharmaceuticals.

Lynch is one of the best-known Irish investors in the biotech sector. He served as former Elan boss Donal Geaney's right-hand man and chief financial officer as Elan's share price soared in the late 1990s and early 2000s.

At one stage in 2001 Elan was Ireland's most valuable company with a market cap of $22bn. However shares tumbled over issues with accounting and concerns over an Alzheimer's treatment. At one stage Elan's stock price fell from $60 to just $2.

Lynch was also involved in the restructuring and refinancing of Irish drug group Amarin before becoming chairman of Icon, the Irish clinical research firm listed on Nasdaq. His knowledge of the biotech sector saw him serve on the board of the IDA for a number of years.

Lynch joined the board of GW Pharmaceuticals in July 2010 buying a stake in the company. Despite selling three quarters of his shares in 2013, Lynch still holds a near €600,000 stake. He has chosen not to receive any remuneration for his role as a non-executive director at the firm.

The €160m share placing is intended to fund clinical development of Epidiolex, a drug derived from cannabis plants for the treatment of childhood epilepsy. The firm is also examining whether its cannabinoid-based compounds may be used to treat brain injuries caused by oxygen deprivation at birth

It has one product, Sativex, approved to treat muscle spasticity caused by multiple sclerosis. The Cambridgeshire-HQed group has a UK Home Office permit to grow marijuana at an undisclosed location in southern England.

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