Cannabis Stocks Pop in the Jazz-GW Fusion News

Jazz Pharmaceuticals has agreed to acquire GW Pharmaceuticals, the maker of the first marijuana-derived epilepsy drug, for $ 7.2 billion in cash and stock.

The deal, which brings together the two biopharmaceutical companies, signifies Jazz’s bet on the long-term prospects of cannabis-based therapies.

Jazz will pay $ 200 in cash and $ 20 in shares per share from GW. The transaction is expected to close in the second quarter.

Cannabis stocks jumped on the news, with shares of Cassava Sciences, Sundial Growers and Tilray closing 59%, 16% and 12%, respectively, on Wednesday.

Cannabis investors are also optimistic after three Democratic senators issued a statement supporting the decriminalization of marijuana.

GW’s Epidiolex drug is used to treat rare forms of epilepsy and has had global sales of $ 510 million in two years from its launch in 2018. The deal will strengthen Jazz’s neuroscience portfolio, said Jazz CEO and President Bruce Cozadd.

“We have a shared vision to develop and market innovative drugs that address the significant unmet needs of neuroscience and an approach to putting patients first,” said Justin Gover, CEO of GW. “Together, we will have the opportunity to reach and impact more patients through a broader portfolio of therapies focused on neuroscience than ever before.”

GW’s shares closed up 44.5% in Wednesday’s news, while Jazz’s shares closed down nearly 4%.