Jazz Pharmaceuticals said Wednesday that it is acquiring GW Pharma, adding an approved childhood epilepsy medicine derived from marijuana to its stable of neuroscience products.

Under terms of the deal, Jazz has agreed to buy GW Pharma for $220 per American Depositary Share, which represents a 50% premium to the stock’s close on Tuesday. The transaction, to be paid using a mix of cash and Jazz stock, values GW at $7.2 billion, or $6.7 billion excluding GW’s cash on hand.

By acquiring GW, Jazz gains control of Epidiolex, a cannabinoid-based medicine approved for three severe types of epilepsy in children. Epidiolex is approved in the U.S. and Europe. Sales totaled $526 million in 2020 and is expected to reach $714 million this year, according to analysts’ consensus forecast.

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When Epidiolex was approved by the Food and Drug Administration in 2018, it was the first medicine made of cannabidiol, or CBD, a component of marijuana that does not give users a high.

“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,” Jazz CEO Bruce Cozadd said in a statement.

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Jazz is a specialty drug maker largely known for its medicines that treat sleep and movement disorders. It also sells certain cancer treatments. Jazz has not yet announced 2020 financial results, but total revenue is expected to be $2.3 billion.

The acquisition of GW is expected to accelerate double-digit revenue growth and be accretive to earnings in the first full year of combined operations, Jazz said.

Source: STATNEWS.COM

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