Pfizer will enter the medical cannabis industry and bet on a promising cannabis-based treatment for bowel diseases.
Last week, the US multinational pharmaceutical and biotechnology company Pfizer signed an agreement with clinical-stage Arena Pharmaceuticals for a total value of about $6.7 billion.
Under the terms of the agreement, Pfizer acquires all shares for $100 per share in an all-cash transaction. Moreover, the press release it reads that the proposed transaction will be subject to the usual closing conditions, including receipt of regulatory approvals and approval by Arena shareholders.
Arena Pharmaceuticals is a biotechnology company with a single pipeline dedicated to cannabis-type therapies. The core of the Cannabis Process consists of Olorinab (APD371), a fully oral investigational cannabinoid type 2 (CB2) receptor agonist, which is intended to treat patients with diseases of the stomach and intestines. It states that Olorinab is an experimental drug and is not currently approved for use by any health authority.
The Arena team is working to develop this cannabis-based drug with an initial focus on visceral pain associated with digestive disorders. The Arena website reads that this compound, by selecting for CB2 versus CB1, is under investigation for pain relief without adverse psychoactive effects.
CB1 and CB2 receptors bind to the endocannabinoid system, a complex cellular signaling system. These receptors are found throughout the human body. Endocannabinoids, such as THC and CBD, can bind to both receptors to indicate that the endocannabinoid system needs action. However, the effects depend on the endocannabinoid receptor and the interaction of the cannabinoid with the receptor.
“The proposed acquisition of Arena complements our inflammatory and immunology capabilities and expertise, Pfizer’s innovation engine that advances potential treatments for patients with debilitating autoimmune diseases who require more effective treatment options,” said Mike Gladstone, Globally. Head of the Department of Infections and Immunology at Pfizer.
Pfizer’s capabilities will accelerate Arena’s mission to deliver essential medicines to patients, and believes this transaction represents the best next step for both patients and shareholders, said Amit de Munshi, President and CEO (CEO) of Arena.
“We are pleased to announce Pfizer’s proposed acquisition of Arena, recognizing Arena’s best-in-class molecule S1P and our contribution to meeting unmet needs in immune-mediated inflammatory diseases,” he said.
Arena’s portfolio also includes other non-cannabis drug pipelines, with a focus on developing innovative potential therapies to treat a variety of autoimmune inflammatory diseases.
With the acquisition of Arena, Pfizer is entering the medical cannabis industry and joining other Big Pharma companies in the cannabis field.
Big pharmaceutical companies have entered the market through many operations in the past years.
Canadian research and development company Avicanna had become A resident firm at Jonhson & Johnson’s JLabs in Toronto in 2017.
One year later, Canadian Tilray went global by an agreement with the Swiss pharmaceutical company Novartis AG to develop and distribute medical cannabis products in legal jurisdictions around the world.
Like big tobacco Companies, Big Pharma’s interest in the medical cannabis industry is growing with the rapidly developing cannabis industry in the space. Research and development on cannabinoids is yielding exciting results in treatment application. For this reason, it is expected that we will see more pharmaceutical companies participate in the medical cannabis industry in the following years.
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