United Kingdom-based GW Pharmaceuticals Plc will be acquired by Jazz Pharmaceuticals Plc in a $7.2 billion cash-and-stock deal, MarketWatch reports. The deal, announced this week, is expected to close sometime in the second quarter of 2021 in hopes of boosting first-year profits after the close and in order to drive additional revenue growth.
GW Pharmaceuticals’ pre-market stock prices soared 46% following the announcement.
GW Pharma is the manufacturer of Epidiolex, an oral solution which in 2018 became the first cannabis-based medication to receive FDA approval for patient use. Jazz Pharma is an Ireland-based biopharmaceutical company founded in 2003.
Epidiolex utilizes CBD to treat seizure symptoms. The medication was originally approved to treat Dravet syndrome, a rare and drug-resistant form of epilepsy, but in August 2020, the FDA also approved the drug as a treatment for seizures resulting from tuberous sclerosis complex.
Nawan Butt, the Portfolio Manager of The MEdical Cannabis and Wellness UCITS ETF (Europe’s first cannabis-focused ETF), said the deal could signal a significant shift in the international cannabis market.
“When [GW] started most global pharma companies were hesitant to do work with this plant ignoring centuries of evidence there were some health benefits,” Butt said. “Today could be a notable turning point… We don’t think this is the last deal we will see in the sector.”