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Cannabidiol Drug Maker Acquired in $7.2B Deal

Cannabis plant

Cannabis plant (Michael Fischer, Pexels.com)

4 Feb. 2021. A developer of treatments for rare neurological diseases derived from cannabis is being acquired by Jazz Pharmaceuticals in a $7.2 billion deal. Jazz Pharmaceuticals plc in Dublin, Ireland is purchasing GW Pharmaceuticals plc in London for $220.00 a share, in a combination cash and stock transaction.

GW Pharma develops oral formulations of cannabidiol or CBD derived from the Cannabis sativa plant that the company says does not produce an emotional high associated with marijuana, also a derivative of cannabis. The National Library of Medicine in the U.S. says some 80 chemicals, known as cannabinoids, are associated with these plants. One of those chemicals, cannabidiol, a non-intoxicating derivative, makes up about 40 percent of cannabis extracts and has been studied extensively for a range of disorders.

GW Pharma’s lead product is Epidiolex, an oral form of cannabidiol approved by the Food and Drug Administration in June 2018 as a treatment for seizures associated with Lennox-Gastaut syndrome and Dravet syndrome in patients two years of age or older. Lennox-Gastaut syndrome is a rare, severe form of epilepsy marked by multiple types of seizures and intellectual disability, while Dravet syndrome is also a rare form of epilepsy, marked by frequent or prolonged seizures that begin in the first year but can continue throughout a lifetime.

As reported by Science & Enterprise, the drug is marketed in Europe branded as Epidyolex. In September 2019, the European Commission endorsed a European Medicines Agency recommendation to approve Epidyolex as a supplemental treatment for Lennox-Gastaut syndrome and Dravet syndrome along with the epilepsy drug Clobazam for patients age 2 years or more. The EC’s endorsement of that decision applies to all 28 countries of the European Union, as well as Norway, Iceland, and Liechtenstein.

Growing portfolio of neurology drugs

Another GW Pharma cannabis-derived drug, nabiximols branded as Sativex, is already approved outside the U.S. as a treatment for spasticity due to multiple sclerosis. The company says a late-stage clinical trial is set to begin in the U.S. for testing nabiximols as a treatment for spasticity from multiple sclerosis and spinal cord injury. GW Pharma says it is also developing therapies for other neurological disorders including Rett syndrome, autism spectrum disorder, and schizophrenia.

Jazz Pharma is a developer of drugs for mainly for cancer but also a growing number of treatments for neurological conditions, starting with sleep disorders. The GW Pharma acquisition, says Jazz Pharma’s chairman and CEO Bruce Cozadd in a statement, “will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities.”

The agreement, valued at $7.2 billion, calls for Jazz Pharma to pay GW Pharma stockholders $220.00 per share, consisting of $200.00 in cash and $20.00 equivalent in Jazz stock. The shares in this case are American depositary shares, equity shares in a non-U.S. company held by American banks. GW Pharma’s closing share price on 2 February was $146.25.

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