Big pharma now has a bigger stake in cannabinoid therapeutics, as Pfizer Inc. (NYSE: PFE) — maker of the Pfizer-BioNTech vaccine — buys Arena Pharmaceuticals, Inc. (Nasdaq: ARNA) in an all-cash deal valued at US$6.7 billion.
The boards of directors of both companies have approved the transaction, Pfizer said in a statement earlier this week.
Arena has a number of development-stage therapeutic candidates, with potential treatments in clinical trials for ulcerative colitis, Chron’s disease, inflammatory bowel disease, atopic dermatitis and acute heart failure.
Among those is olorinab, an orally ingested agonist of the cannabinoid type 2 receptor (CB2), which is in a Phase 2 clinical trial for patients experiencing abdominal pain associated with irritable bowel syndrome (IBS).
Arena says olorinab, through its selectivity for CB2 versus CB1, is being investigated for pain relief without psychoactive effects.
Research has identified CB2 as a therapeutic target for its apparent therapeutic effects on various types of inflammation, without leading to psychoactive effects associated with CB1.
But Arena’s lead therapeutic candidate is etrasimod, which is in a Phase 3 trial for ulcerative colitis, as well s a Phase 2/3 trail for Chron’s disease. Both are chronic, inflammatory bowel diseases that cause ulcers in the digestive tract.
Pfizer also has a candidate in a late-stage clinical trail for ulcerative colitis, oral tofactinib.
“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,” says Mike Gladstone, president and general manager at Pfizer Inflammation and Immunology.
“Utilizing Pfizer’s leading research and global development capabilities, we plan to accelerate the clinical development of etrasimod for patients with immuno-inflammatory diseases,” he said in a statement.
Under the terms of the merger agreement, Pfizer will acquire all of the outstanding shares of Arena common stock for $100 per share in cash, according to a statement.
Pfizer says it expects to finance the transaction with cash on hand.
Company stock soared almost 6 per cent Wednesday to $58.80 on the New York Stock Exchange.