Pharmaceutical giant Pfizer is set to join the medical cannabis industry by acquiring a biotech company that has interests in the cannabis space; Arena Pharmaceuticals. The deal is estimated to be signed off at an equity value of $6.7 billion.
Pfizer, a multinational pharmaceutical and biotechnology company, will be joining other multinational pharma companies that have already invested in the cannabis space. This includes Johnson & Johnson which acquired Avicanna in 2017 and Norvatis which partnered with Tilray in 2018. GW Pharmaceuticals received FDA approval in 2018 to manufacture a CBD medicine (Epidiolex) for the treatment of intractable childhood seizures.
The news was shared through a press release from Arena Pharmaceuticals. This proposed deal is subject to further approval from Arena stakeholders as well as regulatory approvals going through.
Arena Pharmaceuticals has created a cannabinoid-based drug that targets diseases that affect the digestive system, specifically the intestines and stomach. The drug, Olorinab (APD371), is not yet approved by the FDA and is, therefore, an investigational drug.
The endocannabinoid system maintains a state of the physiological process in the body. It has several receptors, but type one and type two receptors are the most prominent. The psychoactive cannabinoid delta-9-tetrahydrocannabinol (THC) binds the CB1 receptors with high affinity.
The oral formulation is a full agonist at the type 2 endocannabinoid receptors. It has a limited affinity for type 1 endocannabinoid receptors and will therefore not cause any psychoactive effects. The drug is intended to address visceral pain arising from gastrointestinal conditions such as IBS. Cannabidiol, (CBD) has a weak affinity for both receptors.
Pfizer Pharmaceuticals has been involved in researching inflammation and immunology treatments in the past. This acquisition will serve to complement their capabilities in providing potential therapies for immune disorders and other debilitating immunological conditions.
Big pharma’s interest in the legal cannabis industry is growing at an unprecedented rate. We expect to see other multinational pharmaceuticals joining the space in the near future as cannabis continues to disrupt the pharmaceutical industry.