Company has been holding out on takeover since $4 per share unsolicited offer was first made in July.
CNS disorders drug firm Cypress Bioscience has agreed to be taken over by Ramius V&O Acquisition and affiliates of Royalty Pharma through a $6.50 per share cash-based deal that values its acquired equity at some $255 million on a fully diluted basis.
Ramius already owns 9.9% of Cypress and has been making a play for the rest of the firm since July. The finally agreed-upon $6.50 per share cash purchase price represents a premium of about 63% over Ramius’ original unsolicited $4 per share acquisition offer six months ago, and an approximately 160% premium on the company’s unaffected share price in mid July, the day before Ramius’ initial bid was made public. Just last week Ramius had upped incrementally increasing past offers for Cypress to $5.50 per share.
“For more than two months, Cypress’ board of directors undertook a comprehensive evaluation of the company’s strategic alternatives,” notes Daniel H. Petree, lead independent director of Cypress’ board of directors. “After thorough and extensive analysis with our financial advisors, Cypress’ board unanimously concluded that this transaction with Ramius and Royalty Pharma provides significant cash value to our stockholders and is in the best interests of our stockholders, customers, and employees.”
In October Cypress sold its diagnostics business to Exagen Diagnostics for up to $8 million in up-front and milestone payments, plus future royalties. The deal includes all Cypress’ testing services, IP, and inventory. Exagen has also taken over the lease for Cypress’ laboratory operations at the current San Diego, California location.
Cypress and partner Forest Laboratories’ fibromyalgia management therapy, Savella™ (milnacipran HCl), was approved in the U.S. in January 2009. The drug is a selective serotonin and norepinephrine dual reuptake inhibitor. Cypress’ development pipeline is headed by CYP-1020, to which it negotiated North American development and commercialization rights in June from BioLineRx. CYP-1020 is a first-in-class GABA-enhanced antipsychotic in development for the treatment of schizophrenia. One Phase IIb study (termed Eagle) has been successfully completed, and Cypress is planning a second Phase IIb study.
An earlier-stage clinical candidate, carbetocin, was acquired by Cypress in August 2010. The intranasal drug has completed Phase I development for the treatment of autism, and a Phase IIa proof-of-concept study is planned for 2011. Carbetocin is a synthetic oxytocin, and was originally developed and marketed outside the U.S. in parenteral form by Ferring Pharmaceuticals for the treatment of postpartum hemorrhage. The intranasal formulation of the drug, for the potential treatment of autism, was subsequently developed by Marina Biotech.