Cannabis-based medicines group GW Pharmaceuticals (GW) could receive over $30m under a new licence agreement with pharmaceutical giant Novartis Pharma to commercialise GW's spasticity treatment product.

Novartis will commercialise 'Sativex' in Australia, New Zealand, Asia (excluding Japan, China and Hong Kong), the Middle East (excluding Israel/Palestine) and Africa.

GW will collect an upfront payment of $5m and could receive additional payments totalling $28.75m if it hits certain approval and commercial milestones. It will also receive royalties on sales of the product.

"As one of the world's leading pharmaceutical companies with a strategic focus in both MS and oncology, Novartis represents an excellent commercial partner for Sativex in these important and growing international markets," said GW's managing director Justin Gover.

After factoring in the payments to its forecasts, Peel Hunt has upped its target price for the group from 160p to 178p, and kept its 'buy' rating, seeing an "excellent buying opportunity given the recent share price weakness."

---
bc

Related share prices
GW Pharmaceuticals (GWP) share price