Epidiolex maker GW Pharmaceuticals to be sold to Jazz Pharmaceuticals

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The major cannabis company has seen its stock rise following the announcement of the sale

From its very inception, GW Pharmaceuticals has concentrated its research and development on medical problems and how to cure, or at least treat, them with cannabis-based products. Early on, they came up with a formula that treats children with severe epilepsy called Epidiolex, which was quickly approved by the Food and Drug Administration (FDA) in 2018, after the Farm Act was passed in the US Congress declaring hemp to be a legal and tradable commodity. The FDA approval was a first for the cannabis industry and brought a lot of attention to GW Pharma, which is now reaping even more benefits. The company is being sold to another heavyweight, Jazz Pharmaceuticals.

GW Pharmaceuticals has done very well with Epidiolex. In fact, the sale of this one drug has catapulted the small research company into a major player in the cannabidiol (CBD) industry, having developed and marketed the first drug derived from the marijuana plant to win approval in the US. Jazz Pharmaceuticals has offered a premium price of $7.2 billion in cash and stock to purchase the company and, as a result, GW Pharmaceuticals US-traded shares gained as much as 49% almost overnight following the announcement, while Jazz shares declined 3.7%.

Epidiolex contains CBD (cannabidiol), which produces an anticonvulsant effect through its interaction with prominent components of the nervous system. The plants from which the compound is drawn are bred to be low in tetrahydrocannabinol (THC), which is the chemical associated with getting high.

GW is also in the late-stage trials for yet another cannabis-based product to treat multiple sclerosis and is working on candidates for autism and schizophrenia. GW Pharmaceuticals’ rigorous approach to developing and producing its products has made the company a much-touted example of the potential for cannabis.