World’s Largest Cannabis Deal Sees UK Firm GW Pharma Bought For $7.2bn IRISH firm Jazz Pharmaceuticals has agreed to purchase UK medical cannabis trailblazer GW Pharmaceuticals for $7.2bn. The GW Pharmaceuticals is undertaking a major research programme in the UK to develop and market distinct cannabis-based prescription medicines [THC:CBD, High THC, High CBD] in a range of medical conditions. The cannabis for this programme is grown in a secret location in the UK. It is expected that the … /PRNewswire/ — Jazz Pharmaceuticals (Nasdaq: JAZZ) today announced the completion of its acquisition of GW Pharmaceuticals plc (Nasdaq: GWPH) ("GW"), a leader…
World’s Largest Cannabis Deal Sees UK Firm GW Pharma Bought For $7.2bn
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 European industry.
The announcement was made on the NASDAQ exchange – where both firms are listed – on Wednesday February 3. 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.
“What you are seeing is the further validation of cannabis-based medicine and the recognition of the impact by traditional Pharma that cannabis will have on healthcare over the next decade.
“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.”
Heralding A New Wave Of Innovation
Gavin Sathianathan, CEO of Cannabis technology firm Alta Flora, said: “Jazz has acquired the gold standard in cannabinoid medicines. Jazz may even have underpaid at $220 per share, given the vast addressable market for cannabinoid medicines and GW’s unique portfolio of IP and FDA-approved drugs.
“GW’s work over the last two decades validating cannabinoid medicines in the pharmaceutical regulatory framework is clearly the pathway that the financial markets value given the multiple that the stock enjoys.
“As a co-founder of Oxford Cannabinoid Technologies, we draw heavily on these lessons; with easier access to capital through the LSE and the UK’s long history of excellence in life sciences, I believe that this acquisition signals the start of a new wave of innovation in the field of cannabinoid therapies.”
Steve Moore, Strategic Counsel at the Centre for Medicinal Cannabis, said: “It’s a vindication 20-plus years approach adopted by GW Pharma. They chose a ‘pure’ pharmaceutical path unlike many other medical cannabis companies who have operated in markets where access is regulated via a so called ‘third highway’.”
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.”
Cannabis-based medicines–GW pharmaceuticals: high CBD, high THC, medicinal cannabis–GW pharmaceuticals, THC:CBD
GW Pharmaceuticals is undertaking a major research programme in the UK to develop and market distinct cannabis-based prescription medicines [THC:CBD, High THC, High CBD] in a range of medical conditions. The cannabis for this programme is grown in a secret location in the UK. It is expected that the product will be marketed in the US in late 2003. GW’s cannabis-based products include selected phytocannabinoids from cannabis plants, including D9 tetrahydrocannabinol (THC) and cannabidiol (CBD). The company is investigating their use in three delivery systems, including sublingual spray, sublingual tablet and inhaled (but not smoked) dosage forms. The technology is protected by patent applications. Four different formulations are currently being investigated, including High THC, THC:CBD (narrow ratio), THC:CBD (broad ratio) and High CBD. GW is also developing a specialist security technology that will be incorporated in all its drug delivery systems. This technology allows for the recording and remote monitoring of patient usage to prevent any potential abuse of its cannabis-based medicines. GW plans to enter into agreements with other companies following phase III development, to secure the best commercialisation terms for its cannabis-based medicines. In June 2003, GW announced that exclusive commercialisation rights for the drug in the UK had been licensed to Bayer AG. The drug will be marketed under the Sativex brand name. This agreement also provides Bayer with an option to expand their license to include the European Union and certain world markets. GW was granted a clinical trial exemption certificate by the Medicines Control Agency to conduct clinical studies with cannabis-based medicines in the UK. The exemption includes investigations in the relief of pain of neurological origin and defects of neurological function in the following indications: multiple sclerosis (MS), spinal cord injury, peripheral nerve injury, central nervous system damage, neuroinvasive cancer, dystonias, cerebral vascular accident and spina bifida, as well as for the relief of pain and inflammation in rheumatoid arthritis and also pain relief in brachial plexus injury. The UK Government stated that it would be willing to amend the Misuse of Drugs Act 1971 to permit the introduction of a cannabis-based medicine. GW stated in its 2002 Annual Report that it was currently conducting five phase III trials of its cannabis derivatives, including a double-blind, placebo-controlled trial with a sublingual spray containing High THC in more than 100 patients with cancer pain in the UK. Also included is a phase III trial of THC:CBD (narrow ratio) being conducted in patients with severe pain due to brachial plexus injury, as are two more phase III trials of THC:CBD (narrow ratio) targeting spasticity and bladder dysfunction in multiple sclerosis patients. Another phase III trial of THC:CBD (narrow ratio) in patients with spinal cord injury is also being conducted. Results from the trials are expected during 2003. Three additional trials are also in the early stages of planning. These trials include a phase I trial of THC:CBD (broad ratio) in patients with inflammatory bowel disease, a phase I trial of High CBD in patients with psychotic disorders such as schizophrenia, and a preclinical trial of High CBD in various CNS disorders (including epilepsy, stroke and head injury). GW Pharmaceuticals submitted an application for approval of cannabis-based medicines to UK regulatory authorities in March 2003. Originally GW hoped to market cannabis-based prescription medicines by 2004, but is now planning for a launch in the UK towards the end of 2003. Several trials for GW’s cannabis derivatives have also been completed, including four randomised, double-blind, placebo-controlled phase III clinical trials conducted in the UK. The trials were initiated by GW in April 2002, to investigate the use of a sublingual spray containing THC:CBD (narrow ratio) in the following medical conditions: pain in spinal cord injury, pain and sleep in MS and spinal cord injury, neuropathic pain in MS and general neuropathic pain (presented as allodynia). Results from these trials show that THC:CBD (narrow ratio) caused statistically significant reductions in neuropathic pain in patients with MS and other conditions. In addition, improvements in other MS symptoms were observed as well. Phase II studies of THC:CBD (narrow ratio) have also been completed in patients with MS, spinal cord injury, neuropathic pain and a small number of patients with peripheral neuropathy secondary to diabetes mellitus or AIDS. A phase II trial of THC:CBD (broad ratio) has also been completed in a small number of patients with rheumatoid arthritis, as has a trial of High CBD in patients with neurogenic symptoms. A phase II trial has also been evaluated with High THC in small numbers of patients for the treatment of perioperative pain. The phase II trials provided positive results and confirmed an excellent safety profile for cannabis-based medicines. GW Pharmaceuticals received an IND approval to commence phase II clinical trials in Canada in patients with chronic pain, multiple sclerosis and spinal cord injury in 2002. Following meetings with the US FDA, Drug Enforcement Agency (DEA), the Office for National Drug Control Policy, and National Institute for Drug Abuse, GW was granted an import license from the DEA and has imported its first cannabis extracts into the US. Preclinical research with these extracts in the US is ongoing.
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Jazz Pharmaceuticals Completes Acquisition of GW Pharmaceuticals plc
DUBLIN , May 5, 2021 /PRNewswire/ — Jazz Pharmaceuticals ( Nasdaq: JAZZ) today announced the completion of its acquisition of GW Pharmaceuticals plc ( Nasdaq: GWPH) (“GW”), a leader in the science, development and commercialization of cannabinoid-based prescription medicines.
“We are excited to welcome our GW colleagues to Jazz as we mark a transformative milestone in creating an innovative, high-growth, global biopharma leader in neuroscience with a worldwide commercial and operational footprint,” said Bruce Cozadd , chairman and chief executive officer of Jazz Pharmaceuticals. “The addition of GW further diversifies our commerical portfolio and innovative pipeline with therapies that are complementary to our existing business, including Epidiolex, a high-growth commercial product with near-term blockbuster potential. We are fortunate to be combining two companies that share a passion for, and track record of, developing differentiated therapies that advance science and the care of patients with often-overlooked diseases. We look forward to building an even stronger company together and are excited about the greater impact we will continue to drive for patients, customers and shareholders.”
Compelling Strategic Rationale
- Adds third high-growth commercial franchise: Epidiolex ® (cannabidiol) oral solution is a transformative treatment for childhood-onset epilepsy that provides a critical therapeutic option for refractory seizures. Launched in the U.S. in 2018, Epidiolex exceeded $500 million in annual net sales in 2020. With a recent launch in Europe (under the tradename Epidyolex ® ) and ongoing research in additional indications, the Company believes Epidiolex has near-term blockbuster potential.
- Diversifies pipeline to drive sustainable growth: The Company’s robust pipeline now includes clinical-stage development programs addressing significant unmet patient needs across neuroscience and oncology, including in sleep, movement disorders, psychiatry, hematology and solid tumors.
- Shared culture and exceptional talent advances our goal to support patients: The global teams at Jazz and GW possess unique talents and expertise, as well as a shared commitment to, and proven success in, delivering differentiated therapies to support people with serious, often-overlooked diseases. GW, like Jazz, has a demonstrated history of honoring values that include integrity, collaboration, passion, innovation and the pursuit of excellence, and a culture where diversity, equity, inclusion and belonging are a priority.
- Expected to deliver substantial shareholder value: This transaction is expected to provide accelerated double-digit top-line revenue growth and to be accretive in the first full calendar year of combined operations, and substantially accretive thereafter. Jazz’s strong cash flow profile provides the capability to rapidly deleverage to a target net leverage of less than 3.5x by the end of 2022.
- Chris Tovey , chief operating officer (COO) of GW since 2012, will join Jazz’s executive management as executive vice president, chief operating officer, and managing director Europe & International, reporting to Dan Swisher , president. Mr. Tovey brings over 30 years of commercial and operations experience in the pharmaceutical industry and deep knowledge of GW’s growing global cannabinoid business. In his role, Mr. Tovey will be responsible for commercialization activities outside North America , manufacturing and supply chain, and information systems and security.
- The Company plans to provide 2021 financial guidance for the combined Jazz/GW organization within the next 45 days.
- Under the terms of the agreement, holders of GW ADSs, which each represented 12 GW ordinary shares, will be entitled to receive $220.00 for each GW ADS, consisting of $200.00 in cash and $20.00 in Jazz ordinary shares. The number of Jazz ordinary shares received per GW ADS is 0.12036, based on the volume weighted average price of Jazz ordinary shares on Nasdaq for the 15 consecutive trading day period beginning on the 18 th trading day immediately preceding the closing date of the transaction. Holders of GW ordinary shares that are not in ADS form will be entitled to receive the foregoing consideration divided by 12 per GW ordinary share.
About Jazz Pharmaceuticals plc
Jazz Pharmaceuticals plc (NASDAQ: JAZZ) is a global biopharmaceutical company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases – often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines and novel product candidates, from early- to late-stage development, in neuroscience and oncology. We actively explore new options for patients including novel compounds, small molecules and biologics, and through cannabinoid science and innovative delivery technologies. Jazz is headquartered in Dublin, Ireland and has employees around the globe, serving patients in nearly 75 countries. For more information, please visit www.jazzpharmaceuticals.com and follow @JazzPharma on Twitter.
Caution Concerning Forward Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Jazz Pharmaceuticals’ growth prospects and future financial and operating results, including statements related to the acquisition of GW Pharmaceuticals and the anticipated results and benefits thereof, including the sales prospects for Epidiolex, double-digit increases in top line revenue growth and expectations about the accretive impact of the acquisition; the company’s expected cash flow supporting the company’s rapid de-leveraging and positioning the company to meet its stated leverage targets; and other statements that are not historical facts. These forward-looking statements are based on the company’s current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties.
Actual results and the timing of events could differ materially from those anticipated in such forward- looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with: risks related to diverting the attention of GW Pharmaceuticals and Jazz Pharmaceuticals management from ongoing business operations; failure to realize the expected benefits of the acquisition; significant transaction costs and/or unknown or inestimable liabilities; the risk that GW Pharmaceuticals’ business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected; risks related to future opportunities and plans for the combined company, including the uncertainty of expected future regulatory filings, financial performance and results of the combined company following completion of the acquisition; GW Pharmaceuticals’ dependence on the successful commercialization of Epidiolex/Epidyolex and the uncertain market potential of Epidiolex; pharmaceutical product development and the uncertainty of clinical success; the regulatory approval process, including the risks that GW Pharmaceuticals may be unable to submit anticipated regulatory filings on the timeframe anticipated, or at all, or that GW Pharmaceuticals may be unable to obtain regulatory approvals of any of its product candidates, including nabiximols and Epidiolex for additional indications, in a timely manner or at all; disruption from the acquisition of GW Pharmaceuticals, making it more difficult to conduct business as usual or maintain relationships with customers, employees or suppliers; effects relating to the consummation of the acquisition on the market price of Jazz Pharmaceuticals’ ordinary shares; the possibility that, if Jazz Pharmaceuticals does not achieve the perceived benefits of the acquisition as rapidly or to the extent anticipated by financial analysts or investors, the market price of Jazz Pharmaceuticals’ ordinary shares could decline; regulatory initiatives and changes in tax laws; market volatility; the ultimate duration and severity of the COVID-19 pandemic and resulting global economic, financial, and healthcare system disruptions and the current and potential future negative impacts to the company’s business operations and financial results; maintaining or increasing sales of and revenue from the company’s oxybate products and other key marketed products; effectively launching and commercializing the company’s other products and product candidates; the time-consuming and uncertain regulatory approval process, including the risk that the company’s planned regulatory submissions may not be submitted, accepted or approved by applicable regulatory authorities in a timely manner or at all; the costly and time-consuming pharmaceutical product development process and the uncertainty of clinical success, including risks related to failure or delays in successfully initiating or completing clinical trials and assessing patients such as those being experienced, and expected to continue to be experienced, by the company as a result of the effects of the COVID-19 pandemic; protecting and enhancing the company’s intellectual property rights; delays or problems in the supply or manufacture of the company’s products and product candidates; complying with applicable U.S. and non-U.S. regulatory requirements; government investigations, legal proceedings and other actions; obtaining and maintaining adequate coverage and reimbursement for the company’s products; identifying and acquiring, in-licensing or developing additional products or product candidates, financing these transactions and successfully integrating acquired product candidates, products and businesses; the company’s ability to realize the anticipated benefits of its collaborations and license agreements with third parties; the company’s ability to achieve expected future financial performance and results and the uncertainty of future tax and other provisions and estimates; and other risks and uncertainties affecting the company and GW Pharmaceuticals, including those described from time to time under the caption “Risk Factors” and elsewhere in Jazz Pharmaceuticals’ and GW Pharmaceuticals’ Securities and Exchange Commission filings and reports, including the company’s Form 10-K for the year ended December 31, 2020 , GW Pharmaceuticals’ Form 10-K for the year ended December 31, 2020 and future filings and reports by either company. In addition, while the company expects the COVID-19 pandemic to continue to adversely affect its business operations and financial results, the extent of the impact on the company’s ability to generate sales of and revenues from its approved products, execute on new product launches, its clinical development and regulatory efforts, its corporate development objectives and the value of and market for its ordinary shares, will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration and severity of the pandemic, governmental “stay-at-home” orders and travel restrictions, quarantines, social distancing and business closure requirements in the U.S., Ireland and other countries, and the effectiveness of actions taken globally to contain and treat the disease. Moreover, other risks and uncertainties of which the company is not currently aware may also affect the company’s forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.
Andrea N. Flynn , Ph.D.
Vice President, Head, Investor Relations
Jazz Pharmaceuticals plc
Ireland +353 1 634 3211
Vice President, Corporate Affairs & Government Relations
Jazz Pharmaceuticals plc
Ireland , +353 1 697 2141
U.S. +1 215 867 4910