One of the biggest winners on Wednesday was a pharmaceutical companies that also is tied into the cannabis sector. GW Pharma (NASDAQ: GWPH) shot up significantly after it announced it had agreed to a $7 billion-dollar takeover offer from another biotech stock, Jazz Pharmaceuticals (NASDAQ: JAZZ).
According to sources familiar with the matter, Jazz Pharmaceuticals was supposedly thinking about the deal for a while. This includes going back and forth with GW Pharma until officially agreeing on a $7.2 billion price tag.
“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,” said GW Pharma CEO Justin Gover in an official statement on Wednesday. “Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”
Cannabis compounds, such as cannabidiol (CBD), have been exploding in popularity. While oils, tinctures, and creams have already popped up on the market, touting a number of health benefits, there’s only been one CBD-based pharmaceutical drug that’s been approved by the Food and Drug Administration (FDA). Epidiolex, a child epilepsy drug, made news back in 2018 when it became the first CBD-based drug to receive the go-ahead from regulators.
Since then, no other company has done the same thing. At the same time, sales of epidiolex have exploded. GW Pharma reported a staggering $510 million in sales for the drug in 2020 compared to the $296 million reported in 2019. As such, it’s not surprising that GW Pharma ended up getting acquired by another company, although not many guessed that Jazz Pharmaceuticals would be the one making the purchase.
GW Pharma’s stock shot up around 44.5% in response to the news. Investors have been speculating about whether GW Pharma would get bought out for a while now. Over the past 12-months alone, GW Pharma almost doubled in value.
At the same time, shares of other biotech stocks that are working on CBD-based epilepsy treatments soared on Wednesday as well. Zogenix (NASDAQ: ZGNX) also jumped around 9.5% following the news. Another company, Zynerba Pharma (NASDAQ: ZYNE), shot up as much as 38% over the course of the day as well.
Going forward, cannabis stocks are expected to do quite well, thanks to the new Biden administration. With marijuana decriminalization looking ever more likely in the U.S., many traders are expecting pot stocks to explode over the mid-term.
GW Pharma Company Profile
GW Pharmaceuticals PLC is a biopharmaceutical company focused on discovering, developing and commercializing novel therapeutics from its proprietary cannabinoid product platform in a broad range of disease areas. Its business activities are functioned through three reportable segments which are Commercial, Sativex Research and Development and Pipeline Research and Development. The company’s lead product candidate is Epidiolex, which is a liquid formulation of pure plant-derived cannabidiol used for the treatment of a number of rare childhood-onset epilepsy disorders. The company also develops and markets Sativex, an oromucosal spray for the treatment of spasticity due to multiple sclerosis. Geographically its presence can be seen across the region of UK, Europe, US, Canada, and others. – Warrior Trading News
