The stock price of GW Pharmaceuticals PLC (NASDAQ: GWPH) is trading at over 40% pre-market today as of 8:26 AM ET. Investors are responding to an acquisition announcement.

Jazz Pharmaceuticals PLC (NASDAQ: JAZZ) announced it has agreed to buy GW Pharmaceuticals Plc GWPH in a cash-and-stock deal that has a value of $7.2 billion. As part of the deal, Jazz Pharma is going to pay $200 per share in cash and $20 in stock for each share to the company shareholders. This is a premium of about 50% of GW Pharmaceuticals closing price on Tuesday and 60% over the 30-day volume-weighted average price.

GW is a leader in discovering, developing, manufacturing, and commercializing novel, regulatory approved therapeutics from its proprietary cannabinoid product platform to address a broad range of diseases. And the companys lead product Epidiolex (cannabidiol) oral solution is approved in patients one-year and older for the treatment of seizures associated with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome, and Tuberous Sclerosis Complex (TSC) all of which are rare diseases characterized by severe early-onset epilepsy.

Epidiolex was the first plant-derived cannabinoid medicine ever approved by the U.S. Food and Drug Administration (FDA). And this product has also been approved, under the tradename Epidyolex by the European Medicines Agency (EMA) in patients two years of age and older for the adjunctive treatment of seizures associated with LGS and Dravet syndrome in conjunction with clobazam and is under EMA review for the treatment of seizures associated with TSC. Plus there are considerable opportunities to pursue other indications within the epilepsy field, including other treatment-resistant epilepsies where significant unmet needs of patients exist.

The deal is expected to close in the Q2. And it is expected to boost profit in the first year after close along with driving double-digit revenue growth.

KEY QUOTES:

Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business. We are excited to add GWs 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. We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients. This will help facilitate a successful integration and bring added capabilities to Jazz. Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies shareholders and patients. We look forward to welcoming the GW team to Jazz to build an even stronger company.

Bruce Cozadd, chairman and CEO of Jazz Pharmaceuticals

Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline. We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs. 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. Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.

Justin Gover, CEO of GW Pharmaceuticals

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.

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GWPH Stock Price Increases Over 40% Pre-Market: Why It Happened - Pulse 2.0