Pfizer Enters Medical Cannabis Sector With $6 Billion Acquisition
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The pharmaceutical company Pfizer has taken its first step into the cannabis market.
The company and producer of the Pfizer coronavirus vaccine announced on Monday, December 13, that it had entered into an agreement to acquire Arena Pharmaceuticals, a San Diego-based company currently developing, among other drugs, a cannabinoid therapeutic called Olorinab.
According to Arena, Olorinab acts as an agonist to the cannabinoid type 2 receptor (CB2) and is being developed as a possible treatment for visceral pain associated with irritable bowel syndrome (IBS) and other gastrointestinal disorders.
Under the terms of the agreement between Arena and Pfizer, the latter will acquire all the outstanding shares of Arena for $100 per share, an all-cash transaction that will approximately total $6.7 billion.
“The proposed acquisition of Arena complements our capabilities and expertise in Inflammation and Immunology, a Pfizer innovation engine developing potential therapies for patients with debilitating immuno-inflammatory diseases with a need for more effective treatment options,” Mike Gladstone, global president and general manager of Pfizer’s inflammation and immunology division, said in a statement.
The acquisition has been welcomed by some in the cannabis industry as an encouraging sign that the pharmaceutical industry is now embracing the medical potential of cannabis chemicals.
Commenting on the news, Nawan Butt, a portfolio manager for the Medical Cannabis and Wellness UCITS ETF index, said, “This acquisition displays the interest big pharma is taking in the fast-evolving world of cannabinoids.”
“We are encouraged by the acquisition as it provides more resources and a wider platform for pharmaceutical development of cannabinoids.”