GW Pharmaceuticals, which makes cannabis-based medicine for treating the symptoms of multiple sclerosis, said today it had raised $11.2 million by selling new shares to two institutions.

US-based Great Point Partners, which made an unsolicited request to take a significant stake in the company, is to subscribe for 7.6 million new shares at 78 pence per share.

In addition, GW has signed an agreement with M&G Investment Management, its largest institutional shareholder, to buy another 0.9 million shares at the same price to maintain its shareholding percentage.

GW shares closed at 76p yesterday.

"Great Point has been following GW for some time and has identified it as a compelling investment opportunity, particularly following the recent strong clinical data on Sativex," David Kroin, a founder of Great Point, said in a statement.

Clinical trials have shown GW's drug Sativex, which is sprayed under the tongue, reduces spasticity in multiple sclerosis patients who do not respond adequately to existing therapies. The medicine is also being developed for cancer pain.

If it is approved, Sativex will be marketed in Britain by Germany's Bayer and in the rest of Europe by Spain's Almirall.

Further clinical trials need to be completed before the medicine is ready for submission for approval in the United States, where GW's partner is Otsuka.

Sativex -- extracted from marijuana plants grown at secret locations in the English countryside - became the world's first cannabis medicine to win regulatory approval when it was approved in Canada in 2005.