GW Pharmaceuticals Shares Gain 46% on $7.2 Billion Acquisition by Jazz Pharmaceuticals

Source: Streetwise Reports   02/03/2021

Shares of GW Pharmaceuticals reached a new 52-week high after the company reported it agreed to be acquired by Jazz Pharmaceuticals in a combination cash and stock deal for $220.00 per share.

Biopharmaceutical firm GW Pharmaceuticals Plc (GWPH:NASDAQ), which utilizes its proprietary cannabinoid product platform to develop and commercialize new medicines across a broad range of disease areas, and global biopharmaceutical company Jazz Pharmaceuticals Plc (JAZZ:NASDAQ), announced that the companies have entered into a definitive agreement for Jazz Pharmaceuticals to acquire GW Pharmaceuticals.

The companies stated that “the combined company will be a leader in neuroscience with a global commercial and operational footprint well positioned to maximize the value of its diversified portfolio.”

The report advised that the agreement terms provide that Jazz will acquire GW for $220.00 per American Depositary Share (ADS) for $200.00 in cash and $20.00 in Jazz ordinary shares, which equates to a total purchase price of $7.2 billion. Both companies respective Boards of Directors have already unanimously approved the transaction, which is expected to close in Q2/21. The companies advised that the offer price represents about a 50% premium over GW’s $146.25 closing stock price on February 2, 2021. The firms indicated that the transaction remains subject to approval by GW shareholders, other customary closing conditions and various regulatory approvals including sanction by the High Court of Justice of England and Wales.

GW is a large manufacturer and marketer of new regulatory approved therapeutics created from using its proprietary cannabinoid product platform to address a wide range of diseases. GW’s lead product, Epidiolex® (cannabidiol) holds the distinction of being “the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA).”

In addition to Epidiolex, the company’s product pipeline includes nabiximols. The company is presently active in Phase 3 studies for these potential drugs and is investigating and seeking FDA approval for use in the treatment of spasticity associated with multiple sclerosis and spinal cord injury. The firm also is developing earlier-stage cannabinoid product candidates for autism and schizophrenia treatment applications.

GW Pharmaceuticals CEO Justin Gover commented, “Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline. We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs…We have a shared vision of developing and commercializing innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first. Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”

Jazz Pharmaceuticals’ Chairman and CEO Bruce Cozadd remarked, “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…Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients.”

For Jazz Pharmaceuticals, the benefits of acquiring GW is that this will serve to add a third high-growth commercial franchise: that enhances product diversification in its key areas of addressing sleep disorders, oncology and epilepsies. Specifically, the GW acquisition will build upon Jazz’s growing neuroscience business by adding Epidiolex which offers near-term blockbuster potential. The company noted that within two years after commercial launch, Epidiolex now brings in around $510 million in annual sales.

Jazz Pharmaceuticals is a global biopharmaceutical company headquartered in Dublin, Ireland. The firm’s portfolio of medicines and product candidates are concentrated in the areas of neuroscience such as sleep and movement disorders and oncology including hematologic malignancies and solid tumors. JAZZ serves patients in greater than 90 countries and has market cap of approximately $9 billion.

GW Pharmaceuticals is a biopharmaceutical company that uses its proprietary cannabinoid product platform to develop novel medicines to address unmet medical needs in a broad range of disease areas. The firm’s Epidiolex oral solution has been approved in the EU for adjunctive treatment of seizures associated with Lennox-Gastaut syndrome (LGS) or Dravet syndrome in conjunction with clobazam in patients two years and older and is under EMA review for the treatment of tuberous sclerosis complex (TSC).

GW Pharmaceuticals began the day with a market capitalization of around $4.6 billion with approximately 31.18 million shares outstanding and a short interest of about 8.3%. GWPH shares opened 47% higher today at $215.00 (+$68.75, +47.01%) over yesterday’s $146.25 closing price and reached a new 52-week high this morning of $217.50. The stock has traded today between $212.15 and $217.50 per share and is currently trading at $212.88 (+$66.63, +45.56%).

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