Cannabis shares appear on news of Jazz-GW merger

Jazz Pharmaceuticals has agreed to acquire $ 7.2 billion in cash and supplies from GW Pharmaceuticals, the maker of the first epilepsy drug extracted from marijuana.

The agreement, which combines the two bio-pharmaceutical companies, points to Jazz’s bet on the long-term prospects of cannabis-based therapies.

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

Cannabis shares came to the fore, with shares in 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 drug Epidiolex is used to treat rare forms of epilepsy and sold $ 510 million worldwide within two years of its 2018 launch. The agreement will strengthen Jazz’s neuroscience portfolio, said Jazz CEO Bruce Cozadd.

“We have a shared vision to develop and commercialize innovative medicine that satisfies significant unmet needs in neuroscience, and an approach to putting patients first,” said GW CEO Justin Gover. ‘Together we will have the opportunity to reach more patients and make an impact on them with a broader portfolio of neuroscience-oriented therapies than ever before. ‘

Shares in GW rose 44.5% on Wednesday, while shares in Jazz closed up nearly 4%.