Sun Pharmaceutical Industries said on Thursday that it has agreed to buy US-based Concert Pharmaceuticals for USD 576 million (about Rs 4,688 crore).
Sun Pharma announced in a regulatory filing that it has inked a final agreement under which it would acquire all outstanding shares of Concert through a tender offer for an upfront payment of USD 8 per share of common stock in cash, or USD 576 million in equity value.
The first cash payment of USD 8 per share of common stock reflects a premium of about 33% above Concert’s 30-day volume weighted average price as of January 18, 2023, the final trading day previous to Thursday’s announcement.
Concert investors will also get a non-tradeable contingent value right (CVR) entitling them to an extra USD 3.50 per share of common stock in cash if deuruxolitinib meets specific net sales goals within certain time periods, according to the company.
Concert is a biotechnology business in its late stages that is pioneering the use of deuterium in medicinal chemistry.
Concert has a robust patent portfolio, including its flagship product candidate deuruxolitinib, an oral inhibitor of Janus kinases JAK1 and JAK2 in late-stage development for the treatment of Alopecia Areata, an autoimmune dermatological disorder.
Alopecia Areata is an autoimmune illness that causes the immune system to assault hair follicles, causing partial or full hair loss on the scalp and body.
“There is a significant unmet need in the Alopecia Areata space and we aim to build on Concert’s commitment to supporting the Alopecia Areata patient community. We are well-positioned to successfully bring this product to market globally,” Sun Pharma North America CEO Abhay Gandhi stated.
Sun Pharma will immediately launch a tender offer to acquire all outstanding shares of Concert common stock under the provisions of the merger agreement.
Concert investors will get a cash settlement of USD 8 per share of common stock.
Concert investors should tender their shares in the tender offer, according to the Board of Directors.
The transaction is expected to be completed in the first quarter of 2023. “Our mission at Concert has always been to translate innovative science to clinical solutions in order to meaningfully improve patients’ lives. We are proud to see our team’s accomplishment creating a valuable new drug candidate for a major, underserved disease appropriately recognized and valued by Sun Pharma as a means to expand their ongoing, international commitment to dermatology,” Concert President and CEO Roger Tung stated.
Concert reported overall sales of USD 29,000 and a net loss of USD 90.6 million for the nine-month period ending September 2022.
During the nine-month period, R&D expenses totaled USD 75.7 million. It has around USD 148.9 million in cash, cash equivalents, and assets as of September 30, 2022.
Sun Pharma has USD 1.6 billion in net cash as of September 30, 2022.