It is not normal to see the larger bulge bracket brokerage firms issue analyst price targets on stocks that imply upside of 100% or more. So, what are investors supposed to make of a Bank of America Merrill Lynch call that shows GW Pharmaceuticals PLC (NASDAQ: GWPH) being worth over 100% more than the current value?

GW Pharma was reiterated as Buy by Merrill Lynch’s Tazeen Ahmad. The firm’s prior $150.00 price objective was already north of 100% upside, given the $72.72 close from Friday. But now the price objective was raised to $172.00, at the top of all analyst call targets, for implied upside of some 136% if Merrill Lynch’s price objective comes to fruition.

Ahmad believes that the positive Dravet’s trial validates GW Pharma’s cannabis-based platform. Epidiolex achieved its primary endpoint of median reduction in seizure frequency in patients with Dravet Syndrome, and the higher rating is based on a higher chance of approval for Epidiolex in Dravet Syndrome.

While $172 is at the highest rung of analyst price targets, the Merrill Lynch report suggests that upside to its price objective may be drawn from positive data in another form of epilepsy, which may be seen in the second quarter of 2016. Merrill Lynch’s report said:

The study demonstrated a significant reduction in median seizure frequency (39%) vs placebo (13%, p=0.01). This trial was the first to study Epidiolex vs. PBO and we believe these results validate GW’s cannabisbased platform. … We increase our likelihood of approval in Dravet Syndrome to 60% (from 40%) and raise our price objective to $172.

Merrill Lynch said that Lennox-Gastaut Syndrome is another major catalyst, and the top-line study data is due mid-year. The studies have over-enrolled and data from the expanded access program released thus far showed higher efficacy rates in Lennox-Gastaut Syndrome relative to Dravet Syndrome response rates.

Merrill Lynch’s investment rationale is as follows:

We rate GWPH shares Buy. Our valuation is mainly driven by our view on Epidiolex, for which the company has presented positive proof of concept data. We see value in investing in GW based on the potential for a scientifically validated cannabinoid therapy to have wide utility over both orphan and non-orphan indications.

GW Pharma’s $72.72 close is within a 52-week range of $35.83 to $133.98, and the consensus analyst price target is $148.83.

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