Jazz Pharmaceuticals has put its proverbial money where its mouth is about expanding its neuroscience pipeline beyond sleep disorders—a goal the company discussed with GEN last month—with its planned $7.2 billion acquisition of cannabinoid-based drug developer GW Pharmaceuticals.

The deal, announced Wednesday, would create a combined company that Jazz said will be focused as strongly on neuroscience beyond sleep medicines as it has been in oncology.

“We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline, and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue, and drive sustainable, long-term value creation opportunities,” Bruce Cozadd, Jazz Pharma’s chairman and CEO, said in a statement.

Jazz agreed to pay $220 per American Depositary Share (ADS) of GW, the equivalent of 12 GW ordinary shares, to consist of $200 in cash and $20 in Jazz ordinary shares. This represents a premium of approximately 50% over GW’s closing stock price on February 2, 2021, of $146.25 and 60% over GW’s 30-day volume weighted average price of $137.17.

The deal is expected to close in the second quarter, subject to the satisfaction or waiver of closing conditions.

London-based GW focuses on discovering, developing, manufacturing, and commercializing novel drugs based on its cannabinoid platform, led by the marketed drug Epidiolex® (cannabidiol or CBD) oral solution, approved in 2018 as the first plant-derived cannabinoid medicine ever approved by the FDA.

GW projected last month that Epidiolex will have generated approximately $148 million in fourth quarter net product sales, and about $526 million in net product sales for all of 2020. That is more than halfway to the forecast restated Wednesday by Ami Fadia, SVB Leerink senior analyst and managing director, biopharma and generics, that Epidiolex could achieve blockbuster-level $1 billion in peak annual sales.

“We believe the deal is an interesting strategic fit with Jazz’s neuroscience focus and adds a platform of innovative cannabinoid product candidates along with a highly specialized manufacturing expertise,” Fadia wrote in a research note.

Epidiolex, which is sold in Europe and the U.K. as Epidyolex®, is marketed by GW’s U.S. subsidiary Greenwich Biosciences, where it is indicated for the treatment of seizures associated with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome, or tuberous sclerosis complex (TSC) in patients ages one and older.

All three rare diseases are characterized by severe early-onset epilepsy. In announcing the GW acquisition, Jazz reasoned that it can pursue “considerable” opportunities to expand the approved indications for Epidiolex within epilepsy, including other treatment-resistant epilepsies where significant unmet needs of patients exist. Jazz envisions epilepsies as a third high-growth commercial franchise after oncology and sleep disorders.

Expanding beyond sleep

Speaking with GEN last month, a Jazz executive said the company is moving toward expanding in neuroscience beyond sleep indications, through a mix of multiple indications for existing products, acquisitions, and internal R&D—an evolution reflected by the GW acquisition.

“Many sleep experts are neurologists and experts in neuroscience, so we’ve wanted to leverage that expertise we have in-house in development and also on the commercial side to take on opportunities more broadly in neuroscience, and we’ve begun to do that,” Robert Iannone, MD, executive vice president, research and development and chief medical officer at Jazz Pharmaceuticals, told GEN in an interview last month, during the J.P. Morgan 39th Healthcare Conference.

“And I would say ‘begun’ because I expect to do more in this area,” Iannone added.

Epilepsy is not currently among the indications within Jazz’ neuroscience portfolio. The portfolio is led by the marketed drug Xywav™ (calcium, magnesium, potassium, and sodium oxybates), which the company launched in November 2020, four months after winning FDA approval in July for the treatment of cataplexy for excessive daytime sleepiness (EDS) in patients ages seven and older with narcolepsy.

Xywav is a successor drug to Jazz’s Xyrem®, which was first approved in 2002 and is similarly indicated. The company has set a goal of shifting its Xyrem patients to Xywav by 2023. Xyrem’s exclusivity has expired in Europe, and the drug has begun losing patent protection in the United States, with eight patents expiring between June 2020 and last month. But Xyrem is still protected by 14 patents listed in the FDA Orange Book, with expirations stretching to 2035.

Adding Epidiolex and other sales-generating drugs is one of several ways the GW acquisition “puts Jazz in a strong position to address the Xyrem LOE [loss of exclusivity],” Fadia of SVB Leerink added.

Xywav is one of three drugs Jazz launched in 2020. The company also brought to market Sunosi® (solriamfetol), a dopamine and norepinephrine reuptake inhibitor indicated to improve wakefulness in adults with excessive daytime sleepiness associated with narcolepsy or obstructive sleep apnea (OSA).

Also launched last year was Zepzelca™, an alkylating drug for adults with metastatic small cell lung cancer (SCLC) with disease progression on or after platinum-based chemotherapy. Jazz plans to expand Zepzelca beyond second-line SCLC by initiating a Phase III trial this year assessing the drug plus immunotherapy in first-line SCLC patients.

Two launches planned

For 2021, Jazz has two launches planned. One is a second indication for Xywav of idiopathic hypersomnia (IH) in adults. In December 2020, Jazz initiated a rolling supplemental NDA submission to the FDA two months after announcing positive Phase III topline data. Jazz said last month it has targeted the fourth quarter for the launch in IH.

Jazz’s second launch this year is planned in oncology. Jazz has begun a BLA submission for JZP-458, a recombinant Erwinia asparaginase indicated as part of a multi-agent chemotherapeutic regimen in the treatment of children and adults with acute lymphoblastic leukemia (ALL) or lymphoblastic lymphoma (LBL) who are hypersensitive to E. coli-derived asparaginase products. Jazz hopes to launch JZP-485 in mid-2021.

“We now have a very robust pipeline across two major therapeutic areas, diverse in terms of the assets and have demonstrated the ability to move programs from the earliest preclinical space through approval. And we really are committed to continuing to do that, to grow that pipeline end to end,” Iannone said.

In neuroscience, Jazz’ pipeline goes beyond Xywav and Xyrem to include several preclinical candidates for undisclosed targets, and three candidates that have reached the clinic:

  • JZP-385, a highly selective modulator of T-type calcium channels set to start a Phase IIb trial in the second half of this year for the potential treatment of essential tremor
  • JZP-150, a fatty acid amide hydrolase (FAAH) inhibitor that Jazz acquired for up to $410 million from SpringWorks—which licensed from Pfizer the drug once known as PF-04457845 in October 2020. Jazz plans to develop JZP-150 for post-traumatic stress disorder (PTSD), with a Phase II trial planned to begin later this year.
  • JZP-324, a Phase I low sodium, extended-release oxybate formulation with the potential for once-nightly dosing for some narcolepsy patients.

During the third quarter, Jazz resumed clinical trials for JZP-385 and JZP-324 after temporary suspensions the company carried out, citing the need for volunteer safety due to COVID-19.

“Really rich and growing” pipeline

“We now have what I think is a really rich and growing pipeline of products—not just a portfolio of products, but a pipeline of development products, and that pipeline spans from the early preclinical space all the way through Phase IV,” Iannone said. “It’s also not only a balance between oncology and neuroscience now but a balance between products that we already have approval for which we are seeking new indications, but also very novel pipeline assets.”

Besides Epidiolex, GW’s neuroscience pipeline includes nabiximols, (Sativex® outside of the U.S.), an oromucosal spray of a formulated cannabis extract that contains the principal cannabinoids CBD and delta-9-tetrahydrocannibinol (THC), as well as other minor cannabinoids and non-cannabinoid components.

Nabiximols is recruiting patients for two of a planned five planned pivotal Phase III trials in spasticity due to multiple sclerosis (MS). The first trial, a placebo-controlled approximately 450-participant study (NCT04203498) in spasm frequency launched in November.  A second trial is evaluating nabiximols as adjunctive therapy compared with placebo on velocity-dependent muscle tone in the lower limbs (NCT04657666).

GW said last month it aims to announce data from at least one of those trials this year, to be followed by an NDA submission if the data proves positive.

Three additional Phase III trials in MS spasticity are set to start by the end of the first half. GW also plans to develop Naximols for spasticity due to spinal cord injury, and for PTSD and other neurological conditions.

GW’s pipeline plans for 2021 also include an ongoing Phase IIb study of a cannabidiol formulation for schizophrenia; placebo-controlled trials with both Cannabidivarin (CBDV) and cannabidiol (CBD) in autism; advancement of a Neonatal Hypoxic-Ischemic Encephalopathy (NHIE) intravenous CBD program; and the completion of a Phase I trial for its novel botanical drug candidate GW541, being developed for neuropsychiatry indications.

“We have a shared vision of developing and commercializing innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first,” stated Justin Gover, CEO of GW Pharmaceuticals. “Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”