A drug derived from marijuana is working for people with a rare form of epilepsy — and the company's stock is taking off

An experimental drug derived from marijuana just passed another critical hurdle toward being approved to treat certain kinds of epilepsy.

A phase 3 trial reported Mondayfound that the drug, Epidiolex, was more effective at reducing the number of seizures in patients with a type of epilepsy called Lennox-Gastaut Syndrome. The drug reduced the number of seizures in a month by 44%, compared with those taking a placebo medication that reduced seizures by 22%. Lennox-Gastaut Syndrome is a rare form of childhood-onset epilepsy that's associated with multiple types of seizures.

In March, a phase 3 trial also showed positive results of the drug in children with Dravet syndrome, a rare, lifelong form of epilepsy that begins in infancy.

GW Pharmaceuticals, the company developing Epidiolex, saw its stock rise by more than 10% on Monday.

If approved, the drug would be the first of its kind to win approval from the US Food and Drug Administration for the treatment of rare forms of childhood epilepsy. Epidiolex contains cannabidiol, one of the active chemical compounds found in marijuana. Unlike marijuana's main psychoactive ingredient, THC, cannabidiol, or CBD, does not cause feelings of euphoria or intoxication, the characteristic "high" that is associated with pot. Cannabidiol has been linked for years with different kinds of pain relief, and it was even studied in several clinical studies.

Treating epilepsy

Epilepsy affects roughly 4.3 million people, but the types of epilepsy and kinds of seizures that people with the illness may experience vary. That means not every person with epilepsy will respond to certain treatments, including those with cannabidiol. In addition to seeking approval for the treatment of Dravet syndrome and Lennox-Gastaut syndrome, GW is also exploring cannabidiol for use in people with tuberous sclerosis complex (a genetic disorder that causes tumors to form in various organs that can lead to seizures) and infantile spasms.

A marijuana leaf displayed at Canna Pi medical marijuana dispensary in Seattle.Thomson Reuters

GW is still exploring how well Epidiolex works in other types of epilepsy.

The hope is that eventually someone taking the drug would be able to reduce the number of seizures they have or even stop them entirely.

But with marijuana (and even just the cannabidiol component of the drug) available on a consumer market in states like Colorado, what's the point of having a prescription version?

Steve Schultz, GW's vice president of investor relations, said the difference would be in the uniformity of the product. "The products that people are using, and purchasing, they're artisanal products," he said. That means they can vary by batch and can be influenced by different fertilizers or pesticides. GW's version wouldn't.

"It will have the hallmarks of a true pharmaceutical medicine," he said.

The challenge of getting approval in the US

Medical marijuana today is legalized on a state-by-state basis. Getting it approved by the FDA as a prescription drug would require the DEA to reschedule it, since marijuana is now considered a Schedule 1 drug with "no currently accepted medical use and a high potential for abuse." The DEA is expected to make a decision regarding rescheduling by mid-2016.

Epidiolex is not the first cannabis-derived drug that the company has brought to market outside the US. Sativex, a treatment for multiple sclerosis and pain related to some cancers, has been approved in at least 27 countries outside the US, but attempts to bring it to the US have fallen flat — the data wasn't good enough to persuade the FDA to give it approval. Schultz said the drug's future in the US was still up in the air.

GW plans to file for approval with the FDA by the end of the year.

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