Shares of GW Pharmaceuticals PLC - ADR GWPH soared Wednesday from around $83 per share to close at $104.03 after Reuters reported the company is in talks with an investment banks to consider strategic alternatives.
GW Pharmaceuticals is a developer of marijuana-based epilepsy treatments. The company was said to have been approached by other drugmakers and hired investment bankers at Morgan Stanley to help handle the overtures.
Reuters noted that companies that could have an interest in acquiring GW Pharmaceuticals include its partners who distribute its drug, Sativex. Current partners include Novartis, Bayer and Almirall.
GW Pharmaceuticals is also overseeing late-stage clinical trials for Epidiolex, a drug that uses cannabis-based compounds to treat epilepsy.
Alan Brochstein, a founding partner at New Cannabis Ventures and Founder of 420 Investor, told Benzinga he found the timing of any M&A action to be earlier than he expected.
Brochstein noted that GW Pharmaceuticals has yet to share full data from two ongoing Phase 3 clinical trials, so the rumor "seems a bit premature."
He added that the company does have a "big opportunity" ahead and has been preparing to to market Epidiolex on its own.
"I would expect potential acquisition interest to increase after the company files its NDA for Epidiolex in 4-10 months," Brochstein also said.
Shares of Zynerba Pharmaceuticals Inc ZYNE also spiked up in sympathy, closing at $10.26. It was up another 6 percent to $10.98 in the pre-market session.
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