W Pharmaceuticals, the Cambridge-based medicinal cannabis pioneer behind epilepsy treatment Epidolex, has been snapped up by rival healthcare group Jazz in a $7.2billion (£5.3billion) deal.
The $220-a-share offer, of which $200 will be paid in cash and $20 in stock, sent GW’s share-price up 46% to a high of $216.01 as the Nasdaq opened in New York. It is the biggest ever acquisition of a UK biotech company, according to the BioIndustry Association.
Jazz, headquartered in Dublin with offices in Oxford and California, said the deal would help bolster its neuroscience unit which generated more than three-quarters of its $600 million sales in the third quarter.
The takeover could unlock a fortune for tycoon Geoffrey Guy, GW’s founder and chairman – nicknamed Doctor Pot – whose stake is now thought to be worth around $90 million (£65million).
Epidolex, is a liquid formulation of pure plant-derived cannabidiol (CBD), was the first to be approved in the United States in 2018.
It is used in patients with Dravet Syndrome and Lennox-Gastaut Syndrome, rare childhood-onset forms of epilepsy among the most resistant to treatment.
It saw sales of $132 million in the latest reported quarter, while the US medical cannabis industry is estimated to hit $16 billion in annual sales by 2025.
GW was launched more than 20 years ago by Guy, and is a pioneer in the medical benefits of marijuana. Its 2010 drug Sativex, to treat the symptoms of multiple sclerosis, has been approved in 30 countries.
The company, which listed on the Nasdaq in 2016, and is the UK’s largest cultivator and exporter of products derived from marijuana.
Justin Gover, GW’s chief executive who saw the value of his holding in the firm rise to around $40 million, said “We have a shared vision of developing and commercialising innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first.
The deal, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2021. Jazz’s stock price fell by almost 5%.
Steve Bates, CEO of the BioIndustry Association said: “GW Pharma is a great example of a fantastic UK life sciences business that British entrepreneurs have built in our ecosystem.
“Over the last two decades they have pioneered Cannabinoid research and product development for the world and I’m particularly delighted to see the commitment to the merged company having ‘a significant presence in the United Kingdom, which is expected to remain an important part of the combined enterprise’.”
— to www.standard.co.uk