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The Canadian specialty pharmaceutical company disclosed that it has reached an agreement to acquire the global rights and operations for Natroba, a leading treatment for lice and scabies, from ParaPRO. The total value of the acquisition is $89.5 million, which has led to a notable increase in Cipher’s stock price, rising 18% to 10.25 Canadian dollars ($7.41) in early trading on the Toronto Stock Exchange.
The acquisition encompasses not only the U.S. operations for Natroba but also the global product rights. This includes both the branded and generic versions of Spinosad, the active ingredient in the treatment. Natroba’s market position is strengthened by the absence of generic alternatives, giving Cipher a unique opportunity to dominate a niche market. Furthermore, the product has exclusivity for its scabies indication with the U.S. Food and Drug Administration (FDA), and this exclusivity is expected to remain in place for about nine more years, providing a stable revenue stream for Cipher.
In addition to acquiring the product rights, Cipher will integrate ParaPRO’s sales and marketing team, which consists of 50 employees. This team’s expertise and existing market relationships are anticipated to enhance Cipher’s ability to effectively market and distribute Natroba, ensuring a smooth transition and continued success in the dermatology segment.
The financial structure of the deal involves $80 million in cash along with $9.5 million in common shares issued to ParaPRO. This strategic acquisition not only broadens Cipher Pharmaceuticals’ portfolio but also strengthens its position in the dermatology market.