Brussels, Belgium. 21st December 2020. Exterior view of Pfizer Pharmaceutical company's offices.
GETTY Pfizer is to enter the medical cannabis industry betting on a promising cannabinoid-based bowel disease treatment.
Last week, American multinational pharmaceutical and biotechnology corporation Pfizer signed an agreement with the clinical-stage company Arena Pharmaceuticals for a total equity value of around $6.7 billion.
Under the agreement terms, Pfizer acquires all shares for $100 per share in an all-cash transaction. Moreover, the press release reads that the proposed transaction will be subject to customary closing conditions, including receipt of regulatory approvals and approval by Arena's stockholders.
Arena Pharmaceuticals is a biotech company with one pipeline dedicated to cannabinoid-type therapeutics. The core of its cannabis operation consists of Olorinab (APD371), an investigational, oral, full agonist of the cannabinoid type 2 receptor (CB2), which aims to treat patients with diseases affecting the stomach and intestine. As Arena's website states, Olorinab is an investigational drug and is not currently approved for use by any health authority.
Arena's team is developing this cannabinoid-based drug with an initial focus on visceral pain associated with gastrointestinal disorders. Arena's website reads that this compound, through its selectivity for CB2 versus CB1, is under investigation for pain relief without psychoactive adverse effects.
CB1 and CB2 receptors bind to the endocannabinoid system, a complex cell-signaling system. These receptors are present throughout the human body. Endocannabinoids, such as THC and CBD, can bind to both receptors to signal that the endocannabinoid system needs to take action. However, the effects depend on the endocannabinoid receptor and the cannabinoid's interaction with the receptor.
"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," said in the press release Mike Gladstone, Global President of Inflammation & Immunology at Pfizer.
Amit D. Munshi, President and Chief Executive Officer (CEO) of Arena, said that Pfizer's capabilities would accelerate Arena's mission to deliver essential medicines to patients and believes this transaction represents the best next step for both patients and shareholders.
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"We're delighted to announce Pfizer's proposed acquisition of Arena, recognizing Arena's potentially best in class S1P molecule and our contribution to addressing unmet needs in immune-mediated inflammatory diseases," he said.
Arena's portfolio also includes other non-cannabinoid drug pipelines, focusing on developing innovative potential therapies to treat several immuno-inflammatory diseases.
By acquiring Arena, Pfizer enters the medical cannabis industry and joins other Big Pharma companies in the cannabis space.
Big pharmaceutical companies have entered the market through several operations in the past years.
Canadian research and development (R&D) company Avicanna became a resident company at Jonhson & Johnson's JLabs in Toronto in 2017.
One year later, Canadian Tilray went global through an agreementwith Swiss pharmaceutical company Novartis AG to develop and distribute its medical cannabis products in legal jurisdictions worldwide.
In May 2021, global biopharmaceutical company Jazz Pharmaceutical completed the acquisition of GW Pharmaceuticals, the developer of Epidiolex, the first FDA-authorized CBD medicine for treating children with Lennox-Gastaut and Dravet syndromes.
Like Big Tobacco companies, Big Pharma's interest in the medical cannabis industry grows with the space's fast-evolving cannabinoids industry. R&D on cannabinoids is achieving exciting results in the treatment application. For this reason, it is expected to see further involvement of pharmaceutical companies in the medical cannabis industry in the following years.