UK cannabis therapy firm GW agrees £5.3bn takeover by Jazz Pharmaceuticals
The deal will see Jazz grow its portfolio of neuroscience therapies at a time when the medical cannabis industry is taking off.
Wednesday 3 February 2021 17:35, UK
A UK-based pharmaceutical firm that specialises in a cannabis-derived treatment for epilepsy has agreed to be bought in a $7.2bn (£5.3bn) takeover.
GW Pharmaceuticals said the cash and stock deal with Jazz Pharmaceuticals - best known for its portfolio of sleep medicines - would create a neuroscience therapy powerhouse.
The deal will allow Jazz, which is based in Ireland, to move beyond treatments for sleep disorders and cancer by adding GWs' Epidolex, which brought in sales of $132m (£97m) in the latest reported quarter.
The cannabis-based drug was approved in the US in 2018 for use in patients aged two years and older with rare childhood-onset forms of epilepsy.
GW, which is listed in New York, has been the subject of bid speculation for many years.
Jazz said the offer price represented a 50% premium to GW's closing share price on Tuesday.
The terms of the deal, expected to close within months subject to shareholder and regulatory approval, will see Jazz pay $220 per share, with $200 of that in cash and the rest in shares.
The tie-up is attractive for the company because the US medical cannabis industry is estimated to grow at pace - beyond $16bn (£11.7bn) in annual sales by 2025, according to New Frontier Data reported by the Reuters news agency.
Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals, said: "Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business.
"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."