Shares in GW Pharmaceuticals, which makes cannabis-based medicines, plummeted in early trading as its Sativex cannabis drug failed to meet trial expectations.

The trial for central neuropathic pain is one of three Phase III trials of the drug scheduled for this year.

Although Sativex reduced pain by at least 30 per cent in half of patients, an “unexpectedly large placebo response” meant that this was not statistically significant.

Some analysts believe this may be a fault of the trial design rather than the drug.

Ibraheem Mahmood, analyst at Investec, said: “We believe this was down to the challenges of designing trials in conditions such as pain and MS, which are innately variable and subjective.”

The company, which has special permission from the UK government to use cannabis for medicines, said it will now focus on getting Sativex approved in cancer pain and multiple sclerosis-related spasticity. It hopes to file the drug for use in MS spasticity in the first quarter of next year in Europe, and for cancer pain in the US in early 2010. Trials in the US are sponsored by its partner Otsuka Pharmaceuticals, a Japanese drugs company.

Steven Wright, head of research and development at GW Pharmaceuticals, said that the company was already planning a new trial of the drug in the central neuropathic pain indication.

Justin Gover, managing director of GW Pharmaceuticals, said: “We have done a range of clinical trials and are constantly reporting results. Overall, these have shown tremendous benefits for patients.”

Analysts were split over whether the results spelt disaster for Sativex.

Paul Cuddon, analyst at KBC Peel Hunt, said: “While valid, this indicates that the effect of Sativex is marginal, and we retain our doubts as to whether the product will ever prove a commercial success

Mr Mahmood said: “In our view, this is an excellent result, and as far as we are aware unprecedented in this desperate patient group who suffer intractable pain. We recommend waiting for further phase III results before investing.”

Shares were down 20 per cent, or 15p, to 56p in morning trade.

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