IRISH firm Jazz Pharmaceuticals has agreed to purchase UK medical cannabis trailblazer GW Pharmaceuticals for $7.2bn.
The deal will be the biggest ever transaction in the rapidly-emerging global cannabis sector and marks a major milestone for the UK industry.
The announcement was made on the NASDAQ exchange – where both firms are listed – early this morning, New York time. GW’s share price respond sharply to the news rising by over 50% to more than $210.
Jazz Pharmaceuticals is based in Dublin and has a strong presence across western Europe and North America. Its existing drug portfolio is currently targeted at sleep and oncology.
GW is one of the world’s leading medical cannabis companies with its home-grown cannabis going into its licensed drugs Sativex and epilepsy drug Epidyolex. Its first cultivation facility was built over 20 years ago.
Its research operations are based in Kent and its growing facilities are owned and managed by British Sugar in Wissington, Norfolk. They consist almost 2m sq ft of growing space – equivalent to 34 football pitches.
June 1998, And GW’s First UK Licence
The company was established by Dr Geoffrey Guy and Dr Brain Whittle and received its first medical research licence on June 11, 1998, from the UK Home Office.
Mr Guy and colleagues had noted large amounts of evidence that cannabis has beneficial effects on a number of medical symptoms.
At the time Mr Guy was quoted as saying: “My professional view of cannabis as a substance is that it appears to be a remarkably safe substance in comparison to most medicines prescribed today.
“The more I learn about this plant the more fascinated I become. It has through its various constituents multiple effects of therapeutic interest, many of which are now being validated by the enormous growth in basic cannabinoid research.”
Nasdaq Listing In 2016
The company left London’s junior market in 2016 for a listing on Nasdaq and is now the world’s largest medical cannabis company.
Stephen Murphy, Co-founder of leading global data and Canna-tech firm Prohibition Partners, said the deal highlighted the upward trajectory of cannabis and its growing acceptance across the pharmaceutical space.
“The premium paid by Jazz acknowledges the growing change in regulations globally that is providing patients with better access to cannabis-based medicines.
“The volume of clinical trials using cultured cannabinoids confirms what we identified in our recent Pharmaceutical Cannabis Report regarding future M&A within the Pharma sector,” he told BusinessCann.
Alastair Moore, Co-Founder and Director of UK Cannabis consultancy Hanway Associates, likewise, welcomed the deal saying: “This is really important news for the sector, and will make a lot of people pay attention to it for the first time.
A Fascinating Story
“The journey from their first Home Office licence in 1998 as a small British biotech company researching plant-based medicines to becoming a global cannabinoid drug development giant is fascinating.
“Attitudes, laws, and our understanding of cannabis science has changed so much in that period of time.
“I expect that this will have a positive impact on the IPOs lined up for early this year on the UK exchanges, as well as general confidence in the sector. This is a case study for how the sector can create value.
“I really like how it is both a story about really early-movers and a reminder that we are still in the beginning stages of this sector’s journey into the mainstream.”
Jazz Pharma will pay $200 per share in cash and $20 in stock for each share owned, or a premium of about 50% over GW’s Tuesday closing price.
In a joint press release the companies said the transaction had been unanimously approved by the Boards of Directors and is expected to close in the second quarter of 2021.
They said: “Jazz and GW are focused on developing life-changing medicines for people with serious diseases, often with limited or no treatment options.”
For full details on the transaction see this Nasdaq release here.