Pfizer has entered the cannabis arena

By Nina Zdinjak

Pharmaceutical giant Pfizer Inc. enters cannabis space through its $ 6.7 billion acquisition of Arena Pharmaceuticals, Inc. The two publicly traded companies confirmed on Monday that they have signed a definitive agreement under which Pfizer will purchase all of Arena’s outstanding shares We will acquire $ 100 per share in a cash-only transaction.

Pfizer expects to use existing cash to fund the transaction upon receipt of all necessary approvals.

Photo by Christina Victoria Craft via Unsplash

Arena Pharmaceuticals, headquartered in San Diego, Calif., Is a biotech company with a segment of its drug pipeline focused on cannabinoid-type therapeutics. The core of its cannabis biotech activities is the research and development of its investigational drug called Olorinab. This is a full oral cannabinoid receptor 2 agonist that is being researched to treat various symptoms, primarily focused on visceral pain associated with gastrointestinal disorders.

Other parts of Arena’s drug pipeline are focused on non-cannabinoid drugs, with an emphasis on developing innovative potential therapies for the treatment of multiple immune-inflammatory diseases. Arena’s portfolio includes diverse and promising therapeutic candidates in gastroenterology, dermatology and cardiology.

“The proposed acquisition of Arena complements our capabilities and expertise in inflammation and immunology, a Pfizer innovation driver to develop potential therapies for patients with debilitating immune-inflammatory diseases who need more effective treatment options,” said Mike Gladstone, Global President & General Manager, Pfizer Inflammation and Immunology. “Leveraging Pfizer’s leading research and global development capabilities, we plan to accelerate clinical development of etrasimod for patients with immune-inflammatory diseases.” Etrasimod is Arena’s drug candidate for the treatment of immune-mediated and inflammatory diseases.

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Amit D. Munshi, President and CEO of Arena, is delighted with the acquisition by Pfizer, recognizing “Arena’s potentially best S1P molecule in its class and our contribution to addressing the unmet need in immune-mediated inflammatory diseases.” Pfizer’s capabilities will accelerate our mission to bring our critical medicines to our patients. We believe this transaction is the best next step for both patients and shareholders. “

Big Pharma enters the cannabis room

This is not the first time one of the largest pharmaceutical companies in the world has acquired a stake in a cannabis company. In February 2021, Jazz Pharmaceuticals bought Cannabinoid drug maker GW Pharmaceuticals, known for developing Epidiolex, The first FDA approved CBD drug to treat children with severe forms of epilepsy. The medicine was first approved for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome, and last July to treat seizures related to the tuberous sclerosis complex. Epidiolex sales were more than $ 500 million last year.

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In 2018, Canadian cannabis giant Tilray signed a supply and distribution agreement for medical marijuana with pharmaceutical giant Novartis AG.

Another big pharmaceutical company that was into cannabis was Johnson & Johnson when it included cannabis company Avicanna in its 2017 innovation, JLABS @ Toronto – a 40,000-square-foot life science innovation hub in the MaRS Discovery District. The labs provide a flexible environment for startups to pursue new technology and research platforms to advance medical care without Johnson & Johnson taking any stakes in these companies.

This article originally appeared on Benzinga and was republished with permission.