Pharmaceutical giant Pfizer Inc. is getting involved in the medical cannabis industry through the $6.7 billion, all-cash acquisition of Arena Pharmaceuticals, a California-based company specializing in autoimmune and cardiovascular treatments, who also has a cannabinoid medication currently in their pipeline.
The two publicly traded companies confirmed the deal last week. As per the agreement, Pfizer will own all outstanding shares of Arena, which they purchased for a total of $100 per share. This marks their eighth major acquisition over the last 20 years.
Like with most other beneficial compounds, big pharma is looking to take over cannabis too. Only, when pharma comes in, you get much less of the natural healing compounds and a whole lot of synthetics and derivatives. That said, now is the time to shop for products, while we still can. For more articles like this one, and for exclusive deals on flowers, vapes, edibles, and other legal products, remember to subscribe to The THC Weekly Newsletter for deals on legal cannabis products, as well as all the latest news and industry stories. Also save big on Delta 8, Delta 9 THC, Delta-10 THC, THCO, THCV, THCP & HHC products by checking out our “Best-of” lists!
Pfizer and their rise to fame
Pfizer Inc. is a multinational, American-headquartered, pharmaceutical and biotech corporation based in Manhattan, New York City, NY. The company was founded by two German immigrants in 1849, Charles Pfizer and his cousin Charles F. Erhart.
By the 1950s, Pfizer was now a global company with offices in Canada, Belgium, Brazil, Cuba, Mexico, Panama, Puerto Rico, and the United Kingdom, as well as many locations throughout the United States. In 1960, their major US research facility was moved from New York City to Groton, Connecticut.
In 1980, Pfizer released its first billion-dollar product – Feldene (piroxicam), a prescription-only anti-inflammatory treatment. Their next major product to receive approval was Diflucan (fluconazole) in 1981, an oral medication used to treat several types of fungal infections including candidiasis, blastomycosis, coccidiodomycosis, cryptococcosis, histoplasmosis, dermatophytosis, and pityriasis versicolor.
In 1989, Pfizer accidentally created one of their most popular medications, Viagra. Initially intended to treat high blood pressure and angina, early trials showed it was not effective for these conditions. It did, however, have an interesting side effect. Trial volunteers reported increased erections after taking the medicine. It was patented for this purpose and received approval from the FDA in March 1998. By the end of 1999, Pfizer had already made $1 billion off Viagra sales.
Along with Viagra, Pfizer also released Zoloft around the same time. Zoloft is a highly controversial anti-depressant that has been the central focus of hundreds of lawsuits. At the heart of many cases was an increased risk of violent behavior, mania, aggression, and even suicidal tendencies; the exact conditions a medication like this is supposed to alleviate. These symptoms were common at the start of treatment or anytime the patients’ doses were changed.
Additional side effects of Zoloft include: agitation, hallucinations, fever, overactive reflexes, tremors; nausea, vomiting, loss of appetite, feeling unsteady, loss of coordination; trouble concentrating, memory problems, weakness, fainting, seizure, shallow breathing, or breathing that stops.
COVID-19 Vaccine
Despite their long list of existing – albeit sometimes questionable – medications and practices, it wasn’t until the start of this year that Pfizer truly became a household name in nearly every country on earth, following the development of their mRNA COVID-19 vaccine. As controversial as this vaccine may be, there is one thing that no one can deny – it’s a serious money maker.
By June, the company had already made roughly $11.3 billion off the vaccine, based on their Q1 and Q1 reports. Now that the booster is available, Pfizer expects its Covid-19 vaccines to bring in roughly $33.5 billion in revenue by the end of 2021, which would make it one of their best-selling medications, ever.
According to a review of 120,000 COVID-19 hospitalizations between June and September 2021, 15 percent are breakthrough cases, and that number is expected to rise significantly with the omicron variant. Some experts believe that soon, most Covid cases will be breakthroughs. A “breakthrough” case refers to new covid cases in vaccinated patients.
Considering the short-lived efficiency of the vaccine, and the fact that pharmaceutical companies are pushing for boosters every six months, there’s certainly a lot of money to be made in the vaccine game, for those who were able to get a foot in early on.
Who is Arena Pharmaceuticals?
Arena Pharmaceuticals is a biotechnology company based San Diego, California and founded in 1997. Their main area of study, up until now, has been in the fields of autoimmune, cardiovascular, and gastrointestinal diseases and they’ve been working on different small molecule medicines for these conditions.
The cannabinoid medication they’re formulating is called Olorinab (APD371). It’s an oral medication that will function as a full agonist of the CB2 receptors. They are researching the effectiveness of this treatment against numerous different health conditions and symptoms, but they are focused primarily on visceral pain associated with gastrointestinal illness.
In other, non-cannabinoid areas of the pipeline, Arena has been working on medications for the treatment of many different immuno-inflammatory diseases, heart conditions, gastroenterology, and dermatology. Currently, all their drugs are still in the development stage.
About the $6.7 billion all-cash deal
“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,” stated Mike Gladstone, global president & general manager, 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 added. Etrasimod is Arena’s prime future treatment option for immune-mediated inflammatory disease.
President and CEO of Arena Pharmaceuticals, Amit D. Munshi, stated that they are “thrilled” to have been acquired by Pfizer, and remarked on “Arena’s potentially best in class S1P molecule and our contribution to addressing unmet needs in immune-mediated inflammatory diseases. Pfizer’s capabilities will accelerate our mission to deliver our important medicines to patients. We believe this transaction represents the best next step for both patients and shareholders.”
Big Pharma Entering Cannabis Space
As big of news as this is, it’s not the first example of a large pharmaceutical company getting involved in cannabis, and it certainly won’t be the last. Most recently, earlier this year, Jazz Pharmaceuticals purchased GW Pharmaceuticals, a cannabinoid drug company from the UK that developed Epidiolex, the first FDA-approved CBD medication. It has also earned approval in Japan and most of Europe. Epidiolex is used to treat two rare forms of childhood epilepsy, Lennox-Gastaut Syndrome and Dravet Syndrome.
Back in 2018, Tilray, a major Canadian-based cannabis corporation, finalized a supply and distribution deal with Novartis AG, a Swiss multinational pharmaceutical company. Johnson & Johnson is also eyeing the industry, and has even allowed cannabis company Avicanna to utilize their 40,000-square-foot research facility, Innovation JLABS@Toronto. This type of setup can provide startups with flexible and stable labs to test products, without the “investor” actually taking a financial stake in the company.
Final Thoughts
The main takeaway here is that big pharma is very familiar with the benefits of cannabis, and once it’s federally legal, large pharmaceutical companies will be making major moves in the medical sector. With companies like this, it’s all about the money, and they’re just waiting for the right time to pull the plug. But keep in mind that the minute real THC (not synthetic) is used in a pharmaceutical drug, it can no longer be sold as a wellness supplement or recreational product. So if the day ever comes that pharmaceutical companies start using plant-extracted THC in their formulations, the industry as we know it will cease to exist.
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Disclaimer: Hi, I’m a researcher and writer. I’m not a doctor, lawyer, or businessperson. All information in my articles is sourced and referenced, and all opinions stated are mine. I am not giving anyone advise, and though I am more than happy to discuss topics, should someone have a further question or concern, they should seek guidance from a relevant professional.
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