GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) finished 23% higher on seven times its typical volume Wednesday after buyout rumors emerged.
GWPH reportedly is working with an investment bank after several companies expressed interest in a transaction.
According to Reuters, the investment bank in question is Morgan Stanley (NYSE:MS), which GWPH hired to oversee a possible acquisition after the firm was contacted by M&A-hungry drugmakers.
So what would a potential suitor want with GW Pharma?
GWHP creates cannabinoid prescription medicines — such as Sativex in 27 countries and Epidolex, a cannabis-based epilepsy drug — to treat cancer pain, multiple sclerosis spasticity and, yes, epilepsy. The company is hoping to treat a wider range of conditions — including oncology, type 2 diabetes, psychiatric disorders and inflammation — as it researches the therapeutic applications of more than 60 cannabinoid compounds.
And there are quite a few companies out there dying to get their hands on cannabinoid-based medicine. This list includes Allergan plc Ordinary Shares (NYSE:AGN) and Biogen Inc (NASDAQ:BIIB). Both companies are hoping to score a treatment for the central nervous system and to light a fire under their research and development departments.
If approved (Epidolex is currently undergoing late-stage clinical trials), Epidolex has the potential to rake in $800 million a year. Currently, and because it’s not FDA-approved stateside, Sativex is only hitting about $2 million in annual revenue.
Similar companies, such as Insys Therapeutics Inc (NASDAQ:INSY), are also up today. INSY stock ended higher by 5.2%.
According to Reuters, GW isn’t “currently interested in a sale, and there is no certainty that any deal will occur.”
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
