February 5, 2021

Jazz Pharmaceuticals acquires GW Pharma in $7.2 billion deal

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Jazz Pharmaceuticals announced its acquisition of GW Pharmaceuticals in a US$7.2 billion deal, subject to regulator and shareholder approval.

George Brown


 

The deal will see Jazz Pharmaceuticals will gain control of Epidiolex, the cannabis-based medicine used to treat severe types of epilepsy in children.

Epidiolex was approved by the US FDA in 2018 after extensive clinical trials and was the first approved cannabis-based medicine which only contained CBD, which does not create a ‘high’ for users.

The medicine has been approved for use in the U.S, most of Europe and Australia. Total sales reached US$526 million in 2020 and according to Prohibition Partners’ forecast in The Pharmaceutical Cannabis Report, sales will reach US$940m by the end of this year.

Under terms of the deal, Jazz has agreed to buy GW Pharma for $220 per American Depositary Share, which represents a 50% premium to the stock’s close on Tuesday 2nd February. The transaction, to be paid using a mix of cash and Jazz stock, values GW at $7.2 billion, or $6.7 billion excluding GW’s cash on hand.

In a company statement, Bruce Cozadd, Jazz Pharma CEO, said:

“We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities.”

Compared to Sativex and Dronabinol, Prohibition Partners’ estimates that Epidiolex will see the fastest rate of sales and represent the biggest share of the market over the next four years.

Currently, over 192 million people consume cannabis each year, and according to Prohibition Partners’ polling of people across three continents; around 25% of this use is at least partly for medicinal purposes.

The deal represents the continuation of a trend which has seen an increasing number of pharmaceutical heavyweights enter the cannabis industry such as Novartis, Sanofi and Teva Pharmaceuticals.

These projects underline the excitement and financial backing which is building behind this new class of medications.

Jazz Pharmaceuticals acquires GW Pharma in $7.2 billion deal

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