The latest deal to shake up the cannabis industry is the acquisition of GW Pharma (NASDAQ 🙂 by a little-known Ireland-based company, Jazz Pharmaceuticals (NASDAQ :), for $ 7.2 billion.
] The acquisition announced last week is the largest acquisition in the marijuana industry and could have major implications for the growing cannabinoid-based drug industry.
GW Pharma is the UK-based company that first launched a drug that used purified CBD – the non-psychoactive compound of cannabis – now used to treat children suffering from severe epilepsy . The drug, Epidiolex, was approved by the United States Food and Drug Administration in 2018. The company is also testing other cannabis-based treatments for multiple sclerosis, autism and schizophrenia.
Jazz Pharmaceuticals markets a number of cancer drugs and a leading treatment for narcolepsy, a chronic sleep disorder that leads to severe daytime sleepiness.
Bruce Cozadd, Chairman and CEO of Jazz Pharmaceuticals said:
"Jazz is proud of our leadership position in sleep medicine and fast-growing oncology businesses. We are excited to add GW & # 39; s leading cannabinoid platform, innovative pipeline and products that will strengthen and broaden our neuroscience portfolio, and our revenues will further diversify and promote sustainable opportunities for long-term value creation. "
The deal points to a broadening of the medical use of cannabis within healthcare, setting the stage for what many in the industry see as a growing market for cannabis-based pharmaceuticals that has gained traction with regulators, especially the European markets.
The sheer size of the deal to acquire GW Pharma almost overshadows another recent industry merger, that of the US $ 3.8 billion deal announced in December in which Tilray ( NASDAQ 🙂 and Aphria (NASDAQ :), two of the biggest names in the cannabis industry, merge.
Aurora Reports Earnings Thursday
Following on from yesterday's earnings reported by Canopy Growth (NASDAQ 🙂 before the opening bubble, the next major quarterly filing in the cannabis industry comes Thursday , when Aurora Cannabis (NYSE 🙂 reveals its second quarter results after market close.
Based on reported forecasts from analysts, the headline will deliver expected earnings per share of $ 0.19, which is not what many investors are hoping for, but better than earnings per share of $ 2.16 for the same quarter of the previous fiscal year.
The shares of Aurora closed yesterday with a profit of 16.2% on the day. They have more than doubled in the past three months, but are still down just over 27% from the year.
In January, the Edmonton-based cannabis grower fired the staff after signing a deal with an outside sales broker, who took over much of the company's sales representatives. Aurora has not disclosed how many employees it cut. In 2020, it also cut around 1,000 positions when it announced it would streamline its operations and close some growing facilities.
