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MALVERN, Pa.—NuPathe Inc. has announced the termination of its agreement and intended merger with Endo Health Solutions Inc., having elected to accept a new offer from Teva Pharmaceutical Industries Ltd. instead. NuPathe and Teva have entered into an agreement and plan of merger under which Teva will acquire the company for $3.65 per share in cash, with NuPathe shareholders also standing to receive rights to additional cash payments of up to $3.15 per share if specified net sales of ZECUITY, NuPathe’s migraine treatment, are reached over time. NuPathe’s board of directors has unanimously approved the transaction.
 
Endo’s acquisition offer, which NuPathe announced its acceptance of December 16, 2013, valued NuPathe at roughly $105 million, or $2.85 per share in cash, with rights to receive additional cash payments of up to $3.15 per share if net sales milestones for ZECUITY were met. NuPathe’s board of directors has withdrawn its recommendation that the company’s shareholders accept Endo’s offer to acquire all of NuPathe’s outstanding shares of common stock.
 
“Teva’s offer represents a premium of 80 cents per share (28 percent) over the upfront cash consideration offered by Endo, with equal contingent cash consideration,” Armando Anido, CEO of NuPathe, said in a press release. “As a recognized leader in the field of diseases of the central nervous system, we believe that Teva is well-positioned to maximize ZECUITY’S potential.”
 
Per the terms of the agreement, one of Teva’s affiliates will commence a tender offer to acquire all of NuPathe’s outstanding shares of common stock for $3.65 per share in cash and the right to receive contingent cash consideration payments of up to $3.15 per share is net sales goals for ZECUITY are met. Teva’s affiliate will enter into a separate Contingent Cash Consideration Agreement with American Stock Transfer & Trust Company, with NuPathe’s stockholders standing as third-party beneficiaries under the agreement.
 
“We believe that ZECUITY is a great fit within our existing U.S. CNS Business Unit, with near-term sales and significant commercial potential," Mike Derkacz, vice president and general manager of Teva CNS, commented in a statement. “ZECUITY enables rapid transdermal delivery of sumatriptan and bypasses the GI tract to avoid issues with oral intake, addressing an important, unmet patient need, especially for those with migraine-related nausea. At Teva, we will leverage our unique Shared Solutions infrastructure to support patient utilization of this important new medicine for migraine sufferers.”
 
Should the tender offer be successfully completed, Teva will acquire all remaining shares not tendered to the offer through a second-step merger at the same share price and with the same contingent cash consideration payments set forth in the tender offer. The tender offer and withdrawal rights will expire at midnight on the 20th business day after the initiation of the tender offer unless said offer is extended. The transaction has an expected completion date of February 2014.
 
The completion of the tender offer is subject to various conditions, including a minimum tender of a majority of NuPathe’s outstanding shares on a fully diluted basis, the expiration or termination of any applicable waiting periods under competition laws and other customary closing conditions.
 
NuPathe enlisted MTS Securities, LLC, an affiliate of MTS Health Partners, LP, to serve as its financial advisor and offer a fairness opinion for this transaction, with Morgan, Lewis & Bockius LLP acting as its legal advisor.

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