Pfizer gains a foothold in medical cannabis with the acquisition of Arena

Pfizer is entering the medical cannabis market. By acquiring Arena for $6.7 billion in an all-cash, non-stock transaction, the pharmaceutical giant is gaining access to Olorinab, a small part of Arena’s drug portfolio. This drug, currently in the testing phase, acts on the CB2 endocannabinoid receptor, A cannabinoid receptor in the human body that is activated in pain management, a promising treatment for gastrointestinal disorders, particularly Crohn's disease.

«The acquisition of Arena complements our expertise in inflammation and immunology for patients suffering from immuno-inflammatory diseases. We need more effective treatments.», promises one of Pfizer's executives in a press release. Arena's management, for its part, believes that the «Pfizer's capabilities will help accelerate our mission to bring these drugs to market.».

For now, Olorinab still has a long way to go. The drug is still in clinical trials, specifically in Phase II of a three-phase trial. But the latest news wasn’t very good, since the most recent phase, Phase IIb, did not produce the expected results. The specialized media outlet Clinical Trials Arena explains that The probability of market launches is currently only 2 %.

Pfizer joins other giants interested in cannabis

The drug is currently being tested on 273 people, with some patients receiving a placebo and others receiving the actual drug, for three months. So far, the pharmaceutical company has observed that a 50-mg dose appears to be effective in treating moderate to severe pain. However, Olorinab has not «the efficacy we had set for abdominal pain», regrets the company's decision. «These findings are promising", a positive Arena frame.

By acquiring Arena, Pfizer joins other pharmaceutical giants that have invested in cannabis. In fact, this spring, Jazz Pharma acquired GW Pharmaceuticals. GW is the creator of Epidiolex, a high-dose CBD medication primarily used to treat epileptic seizures. In 2017, Johnson & Johnson, the world’s leading pharmaceutical company, also brought a company specializing in cannabis into its research division.

Investors welcomed this decision. In fact, at the close of trading on the New York Stock Exchange, Pfizer’s stock rose 5 % to $55.