Cannabis firm valued at £175m on AIM

Geoffrey Guy, the chief executive of GW Pharmaceuticals, will see his paper fortune valued at £47m when the company that develops prescription drugs containing cannabis floats on the junior AIM stock market next Thursday.

The company has raised £25m through placing a 14.3 per cent stake at 182p a share that was six times oversubscribed. It will float with a market capitalisation of £175m.

GW, founded by Dr Guy three years ago, increased the number of new shares it offered to institutions following strong demand. It had orginally hoped to raise £16m of fresh funds.

It will plough the cash into clinical trials of its treatments for multiple sclerosis (MS) and cancer pain. If the trials are a success, GW hopes to apply for regulatory approval from Britain's Medicines Control Agency in 2003 and begin selling the drugs in early 2004.

Dr Guy, who also co-founded the quoted plant medicines company Phytopharm in 1989, owns 27 per cent of GW and is the company's biggest single shareholder.

The company's directors together control 45.8 per cent of GW and have agreed not to sell any shares for at least 12 months after the float and no more than half their holdings for a further six months. Two other shareholders with 10.9 per cent of GW have agreed a 12 month lock-in.