MALVERN, Pa.—Endo Health Solutions has announced the establishment of a definitive agreement under which it will acquire NuPathe Inc., a specialty pharmaceutical company developing therapeutics for central nervous system diseases. The deal prices NuPathe at $2.85 per share in cash, for an approximate total of $105 million. NuPathe’s shareholders will also receive rights to additional cash payments of up to $3.15 per share if pre-established net sale of ZECUITY are met. Endo expects to realize cost synergies from this deal, which is expected to be accretive to the company’s adjusted diluted earnings per share within the first year after closing. The transaction, which is expected to close early next year, was unanimously approved by NuPathe’s board of directors.
Per the terms of the merger agreement, an Endo affiliate will commence a tender offer to acquire all of NuPathe’s outstanding shares of common stock at $2.85 per share and the right to receive contingent cash consideration payments of up to $3.15 per share if net sales milestone for ZECUITY are reached. Once the tender offer is successfully completed, Endo will acquire all remaining shares not tendered to the offer in a second-step merger at the same share price and contingent cash consideration payments. The tender offer is subject to several conditions, including a minimum tender of a majority of NuPathe’s outstanding shares to the offer, the expiration of any applicable waiting periods and other customary closing conditions.
“The acquisition of NuPathe enhances our branded pharmaceutical portfolio and is well aligned with our strategy of acquiring late-stage products for commercialization,” Rajiv De Silva, president and CEO of Endo, commented in a statement. “We’re excited about the opportunity to launch ZECUITY, a treatment that could be an option for millions of migraine patients, including those with migraine-related nausea. Following the close of the deal, we plan to launch ZECUITY in the first half of 2014 by leveraging our existing commercial expertise in pain and migraine management and the current infrastructure of our branded pharmaceuticals business overall.”
ZECUITY (sumatriptan iontophoretic transdermal system) is the first and only patch to receive U.S. Food and Drug Administration approval for the acute treatment of migraine with or without aura in adults. The disposable, single-use transdermal patch delivers sumatriptan, the most commonly prescribed migraine medication, through the skin, and offers relief for migraine pain and related nausea.
“Our team has worked very hard to develop products that we believe will provide significant clinical advantages over current treatments for patient populations facing diseases of the central nervous system. We believe this acquisition by Endo will increase the potential for ZECUITY to make a meaningful difference for patients we have worked so hard to serve,” Armando Anido, CEO of NuPathe, said in a press release.
In a November announcement of its Q3 financial results, NuPathe reported a net loss of $7.8 million, or 25 cents per diluted share, with operating costs of $7.6 million. The company also noted that September saw the beginning of patient dosing in a Phase 1 study of ZECUITY in adolescents with a history of migraines to determine safety, pharmacokinetics and tolerability in adolescent patients.
Endo brought on Skadden Arps as its legal advisor for this transaction. NuPathe enlisted MTS Securities, LLC, an affiliate of MTS Health Partners, LP, as its financial advisor, with Morgan, Lewis & Bockius LLP serving as its legal advisor.
