Ireland-based biopharmaceutical company Jazz Pharmaceuticals announced the biggest acquisition in the cannabis space to date after it agreed to buy the global leader in developing cannabinoid-based medicines, GW Pharmaceuticals for $7.2 billion last week.

Ireland-based biopharmaceutical company Jazz Pharmaceuticals announced the biggest acquisition in the cannabis space to date after it agreed to buy the global leader in developing cannabinoid-based medicines, GW Pharmaceuticals for $7.2 billion last week.

Following this announcement, GW Pharmaceuticals shares, which rose over 10% in 2020, jumped 49% to a record high of $217.5 on Wednesday. On the other hand, Jazz Pharmaceuticals shares seen its biggest intraday volatility since August 2015.

According to the agreement, Jazz to acquire GW for $220.00 per American Depositary Share (ADS), in the form of $200.00 in cash and $20.00 in Jazz ordinary shares, for a total consideration of $7.2 billion, or $6.7 billion net of GW cash. The deal is expected to close in the second quarter of 2021.

“Cannabis has the potential to cause significant disruption to the traditional medical market, and as more Pharma companies get involved, such as Jazz, we expect to see continued innovation and product development,” said Owen Bennett, equity analyst at Jefferies.

“Second, it raises the possibility of more M&A, with other big Pharma bidding for cannabis companies. Here we would be careful assuming most cannabis players could be subject to an offer.”

GW Pharma‘s Epidiolex, the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration, registered sales of over $500 million for the U.K.-based company in 2020. Market experts forecasts sales to hit $1 billion over the coming months, Reuters reported.

Source: FX EMPIRE