Are Pfizer buying Arena pharmaceuticals to get into the cannabis space or are they just wanting IBS and digestive issues?

Pfizer intends to buy a biotech company to manufacture cannabinoid-type therapeutics. Pfizer Inc, a global pharmaceutical giant, is a household name. The company recently announced it would acquire Arena Pharmaceuticals Inc. in a $ 6.7 billion deal. This move will make Pfizer a force to be reckoned with in the medical cannabis industry.

Both companies have confirmed that a definitive agreement has been reached and signed. All outstanding Arena shares will be transferred to Pfizer as part of this cash deal at $ 100 per share.

Once all the necessary approvals are in place, Pfizer will fund all transactions with available cash.

About Arena Pharmaceuticals

Arena Pharmaceuticals, based in San Diego, California, is a biotech company with a cannabinoid therapeutics segment in its pipeline. Research and development of olorinab, an investigational drug candidate, is at the heart of its cannabis biotech activities (APD371). This is an oral cannabinoid receptor-2 full agonist that is being studied to treat a variety of symptoms, with an emphasis on visceral pain associated with gastrointestinal disorders.

According to the company’s website, olorinab is not approved for use by any health authority. It is an experimental drug that is still in clinical trials.

The website also states that the drug will be improved to make sure it doesn’t have any negative psychoactive effects on patients. The drug has a selectivity for CB2 over CB1. The CB1 and CB2 receptors bind to the endocannabinoid system, a complex cell signal system. These receptors can be found throughout the human body. Endocannabinoids, including THC and CBD, can bind to both receptors to signal the endocannabinoid system that it is time to act. However, the drugs are dependent on the endocannabinoid receptor and the interaction of the cannabinoid with the receptor.

The company’s drug pipeline also focuses on other drugs that are not derived from cannabis. The main goal of the company is to develop efficient and innovative therapies that can be used to cure, treat or treat specific immune-inflammatory diseases. While the cannabis industry made headlines that Big Pharma was buying its way into the marijuana industry, some have claimed that the IBS and gastric medicine niche is becoming so competitive that Pfizer was only interested in the drugs, not because they were trying to get in to enter the industry in the cannabis space. This may be a case when you are buying a group of drugs for anti-inflammatory stomach problems, and not just to buy weed.

About Pfizer Pharmaceuticals

Pfizer is a pharmaceutical company that makes over 350 different drugs. It is a publicly traded global pharmaceutical company headquartered in New York City with sales of over $ 50 billion in 2019 alone. Popular drugs like Eliquis, Enbrel, EpiPen, Depo-Provera, Dimetapp, Neosporin, Xeljanz, and Zithromax / Zmax are all manufactured by Pfizer. It specializes in cancer, heart, and diabetes treatments, as well as vaccines. It also makes drugs for endocrine (hormone) and nervous system disorders.

The company is owned by its shareholders and operates in 180 countries. The company’s research headquarters are located in Groton, Connecticut. It employs over 96,000 people around the world.

The new deal

Mike Gladstone, global president and general manager of Pfizer Inflammation and Immunology, said the acquisition of Arena aligns with the company’s capabilities and expertise in immunology and inflammatory diseases.

Over the years Pfizer has successfully created an engine of innovation developing potential drugs for patients worldwide with chronic and debilitating immune-inflammatory diseases. The company recognizes the urgent need to explore other high potential treatment options and this is where Arena’s cannabinoid drug pipeline comes in.

Pfizer plans to accelerate the clinical development of etrasimod for patients with inflammatory immune diseases by leveraging Pfizer’s world-class research and development capabilities (Arena’s drug candidate for the treatment of immune-mediated and inflammatory diseases is etrasimod).

Arena President and CEO Amit D. Munshi announced that this transaction is the best next step for both patients and shareholders. “Pfizer’s capabilities will help us fulfill our mission of getting vital medicines to patients faster,” said Munshi.

He added that Arena is happy to be acquired by Pfizer. This means that Arena’s contribution to meeting the medical needs of various immune and inflammatory diseases is felt. He also mentioned that Arena is one of the best S1P molecules in its class.

According to the press release, the proposed transaction is subject to customary closing conditions such as B. Regulatory Approvals and Shareholder Approvals.

Other big pharma also rely on the cannabis sector

Pfizer isn’t the only major pharmaceutical company in the cannabis industry, nor is it the first to venture into the field. Large pharmaceutical companies like Jazz Pharmaceuticals, Johnson & Johnson, and Tilray acquired stakes in cannabis-related companies back in 2017. The drug’s widespread acceptance during and after the height of the pandemic has educated many companies about the medicinal potential of cannabis.

Jazz Pharmaceuticals acquired GW Pharmaceuticals, a cannabinoid drug company known for developing Epidiolex, the first FDA-approved CBD drug for the treatment of children with severe epilepsy, in February 2021. Last year Epidiolex had sales of more than $ 500 million. The drug was first approved for the treatment of seizures associated with Lennox-Gastaut syndrome and Dravet syndrome. It was recently approved for the treatment of seizures related to the complex of tuberous sclerosis.

In 2017, Johnson & Johnson brought cannabis company Avicanna to a Toronto-based innovation hub. The 40,000 square foot innovation center for life writers is located in the Mars Discovery District. The labs provide a flexible environment for startups looking to develop new technologies and research platforms to advance medical care without Johnson & Johnson taking a significant stake in these companies. Medical cannabis company Novartis AG is another large pharmaceutical company diving into the cannabis industry. The company has signed a supply and distribution agreement with Canadian cannabis giant Tilray.

Bottom line

Big Pharma’s interest in the medical cannabis industry, like Big Tobacco’s, is growing along with the area’s rapidly evolving cannabinoid industry. Cannabinoid research has shown promising results in the field of treatment. As a result, pharmaceutical companies are expected to become more involved in the medical cannabis industry in the coming years.

As an American multinational pharmaceutical and biotechnology company, Pfizer sets an example for other large pharmaceutical companies across the country. The success of this endeavor, as well as the approval of better cannabis policies, would bring more innovation to the cannabis industry.

On Monday morning, Pfizer shares were up at least 5% at $ 55.43 per share. This increase is due to the announcement to enter the cannabis industry.

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