Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) agreed to pay for $7.2 billion in stock and money for Marijuana Derived Epilepsy Drug – Epidiolex produced by GW Pharmaceuticals Plc (NASDAQ: GWPH). The offer is going to be closed in Q2.
As per the pact terms, GW Pharmaceuticals investors will get american shares that are depositary each at $220. The deal includes Jazz stock worth $20 and cash of $200 for each share.
Cures rare forms of the disease
GW Pharmaceuticals Epilepsy drug – Epidiolex, which is based on marijuana, is used to treat rare forms of the disease. According to a communiqué from the companies on Wednesday, Epilepsy drug garnered $510 million in 2020. GW Pharmaceuticals collected $32,500 from each patient as annualized charge in the US in 2018.
Strengthens neuroscience drug pipeline
Jazz strengthens its neuroscience drug pipeline through this deal. Bruce Cozadd, CEO of Jazz, said Epidiolex expects to generate annual sales of $1 billion soon. The cannabinoid-based drugs of GW Pharmaceuticals are tested to treat schizophrenia, autism, and other conditions that are medical
Jazz, that will be located in Dublin, partcipates in the make of medications to take care of diseases that are rare. These drugs generated sales of $1.7 billion in Q3 2020 (up 7.5% YoY). Xyrem, its best-selling drug, helps to cure narcolepsy.
Following the deal, Jazz’s shares declined by 5.1% on Wednesday on concerns that the company pays a higher premium to analysts estimates of GW pharmaceuticals performance that is financial. An SVB Leerink LLC analyst, Ami Fadia, stated the pact is a fit that is strategic Jazz, which focuses on neuroscience.
With this deal, Jazz added products that are cannabinoid-based its products. It’s an move that is aggressive Jazz to takeover GW Pharmaceuticals at a higher price. The shares of GW Pharmaceuticals trade higher at $214.77 (up 46.85%) on March 2, 2021, whereas Jazz, is also rebounding.
Jazz posted revenues of $665 million (up 14.4% YoY) in Q4 2020, exceeding the analysts’ forecasts. The company expects to post sales of $2.7 billion in 2021 as per analysts’ estimates. Jazz provides remedies for indications in hematology-oncology, indications in neuroscience, and problems with sleep. Its drug that is promising Zepzelca a cure for little lung cancer tumors.