GW SIGNS CANNABIS DEAL

GW Pharmaceuticals, the UK research and development group, has teamed up
with German company Bayer to market the former's cannabis-based drug,
Sativex, in the UK. The deal, worth up to UKP 25m, marks the first
significant income earned by the UK group, which commands a market
capitalisation of some UKP 230m.

Sativex, which is sprayed into the mouth, is used to provide pain relief
for multiple sclerosis sufferers and may be developed to alleviate
cancer-related pain.

The deal announced yesterday only covers the UK, where the government has
already indicated it is ready to change the rules governing the use of
cannabis to allow doctors to prescribe Sativex. However, Bayer also has an
option to market the drug in the rest of Europe as well as Canada,
Australia and New Zealand.

"Bayer is a very good pharmaceutical company which is highly respected
around the world.

"That's what we want from a partner," said GW Pharmaceuticals' executive
chairman, Geoffrey Guy.

The US is not included in the deal. Mr Guy indicated his company would take
a cautious approach, which could mean several years before it attempts a
foray into America.

The US may be the biggest market, but it is also one of the most difficult
for a small company to enter, he argues.

"It may be an enticing market but we will be very careful. You can lose
your shirt trying to get into the US."

Bayer, which is wrestling with lawsuits following the recall of its
cholesterol-lowering drug, Baycol, in August 2001, said it regarded the
market for Sativex as a significant one.

"For a special kind of patient it is a very, very useful drug -for example
for patients with severe pain," said a spokeswoman.

She said the two companies hoped to have final approval for the drug by the
end of the year. Once that was achieved, she expected that the drug would
become available very quickly, she added.