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Jan 8, 2014

Teva Offers $9M More Up Front for NuPathe

  • Less than a month after entering into a deal to be acquired by Endo Health Solutions, NuPathe said today it is weighing a bigger offer from another would-be buyer that is offering $9 million more up front for the company.

    Teva Pharmaceutical Industries is offering $3.65 a share up front for NuPathe or $114 million, 28% above the $2.85 per share or $105 million up-front payment offered by Endo, NuPathe disclosed today in a regulatory filing with the U.S. Securities and Exchange Commission.

    Teva retains Endo’s up-to-$3.15 per share or $116 million component of the deal, tied to net sales milestones for Zecuity® (sumatriptan iontophoretic transdermal system), the first and to-date only patch approved by the FDA to treat migraine, NuPathe added. However, Teva offers different terms for smaller contingent payments than the Endo offer:

    • $0.85 per share upon net sales of Zecuity reaching at least $100 million during any four consecutive calendar quarters on or before the 60th day following the ninth anniversary of the date of the first commercial sale of the drug;
    • $1.00 per share upon net sales reaching at least $300 million during that same timeframe, and;
    • $1.30 per share upon net sales reaching at least $450 million during any four consecutive calendar quarters on or before the 60th day following the 12th anniversary of the date of the first commercial sale.

    In all, Teva is offering $230 million vs. $221 million from Endo—yet NuPathe’s board said it is still on board with the Endo deal, announced December 16.

    “At this time, the company board has not made a determination that the Teva Proposal is a superior proposal (as that term is defined in the merger agreement). The company board continues to unanimously recommend that the company’s stockholders accept the offer by purchaser [NuPathe] and tender their Shares pursuant to the offer,” NuPathe stated in a boldfaced paragraph within its filing.

    NuPathe added that after consulting with advisors, the board determined that "the Teva Proposal is reasonably expected to lead to a superior proposal” and agreed unanimously that “not engaging in negotiations or discussions with Teva regarding the Teva proposal, would be inconsistent with the directors’ fiduciary duties to the company’s stockholders under applicable law.”

    Teva’s offer is also 13% above NuPathe’s closing share price yesterday.

    Like NuPathe, its investors appear to be expecting even higher bidding for NuPathe, as shares of the company jumped 30% to $4.21 in premarket trading today—and have risen 40% since announcement of the Endo offer.

    Zecuity, which won approval in January 2013, is a disposable, single-use, battery-powered transdermal patch designed to deliver sumatriptan, the most widely prescribed migraine medication, through the skin. Zecuity is indicated for acute treatment of migraine with or without aura in adults, and intended to deliver relief from both migraine headache pain and migraine-related nausea.

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