NuPathe today terminated its acquisition agreement with Endo Health Solutions and agreed instead to be acquired by Teva Pharmaceutical Industries, which outbid Endo’s original offer and will buy the specialty pharma company for $144 million up front, plus additional millions tied to sales milestones.
NuPathe accepted Teva’s counteroffer, made January 8, to buy all outstanding NuPathe shares of common stock for $3.65 per share up front—28% above the $2.85 per share up front payment offered by Endo last month, and 59% above NuPathe’s closing level on December 13, the last trading day before Endo said it would acquire the company.
Teva’s offer includes Endo’s up-to-$3.15 per share contingent cash 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. Terms for Teva’s contingent-cash consideration payments, which will not be publicly traded, are closer to those set by Endo in its original deal:
- $2.15 per share in cash payable upon net sales of Zecuity of at least $100 million in any four consecutive calendar quarters, on or prior to the 60th day following the ninth anniversary of the date of the first commercial sale of the drug, and
- $1.00 per share in cash payable upon net sales of Zecuity of at least $300 million in any four consecutive calendar quarters, on or prior to the 60th day following the ninth anniversary of the date of the first commercial sale of the drug.
Neither NuPathe nor Teva updated the potential value of the contingent-cash consideration payments, which was earlier reported at $116 million.
“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, vp and gm, Teva CNS, said in Teva’s statement announcing the deal. “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.”
Previously, Teva offered $0.85 per share upon net sales reaching at least $100 million during any four consecutive calendar quarters on or before the 60th day following the ninth anniversary of the first commercial sale of Zecuity; $1.00 per share upon reaching at least $300 million during that same timeframe; and $1.30 per share upon reaching at least $450 million during the same period.
Endo also offered contingent cash consideration payments of up to $3.15 per share by breaking them up into milestones at $2.15 per share and $1 per share—but the sales period for both milestones was any four-quarter period before the ninth anniversary of first commercial sale.
Teva will begin its tender offer “promptly,” with the offer and withdrawal rights expected to expire at 12:00 midnight EST on the 20th business day after the offer is launched, unless extended The acquisition is subject to various conditions, including a minimum tender of a majority of outstanding NuPathe shares on a fully diluted basis, expiration or termination of applicable waiting periods, and other customary conditions.
NuPathe’s board of directors unanimously approved the transaction, which is expected to be completed next month. Endo received a $5 million termination fee from NuPathe and said it would withdraw its tender offer for the specialty pharma.