Pfizer is entering the medicinal marijuana industry after betting on a cannabis-based bowel disease treatment.
The biotechnology corporation signed an agreement with Arena Pharmaceuticals, a clinical-stage company, to acquire a total equity valued at roughly $6.7 billion.
Pfizer will gain all shares at $100 per share via an all-cash deal, per the agreement, according to a press release.
Arena Pharmaceuticals has a pipeline dedicated to cannabis-based therapeutics, with the Olorinab (APD371) at its core.
The Olorinab (APD371) is an oral, investigational, full agonist for the cannabis type 2 receptor, according to Arena Pharmaceuticals.
The aim is to use the treatment to address patients with diseases of the stomach and intestine, but it is not authorized for service by any health authority, according to a report.
"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," Mike Gladstone, global president of inflammation and immunology at Pfizer, said in the press release.
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The deal is subject to all closing conditions, including approval by Arena's shareholders and regulatory approvals, the report noted.