Sun Pharmaceutical Industries, the world’s fourth-largest specialty generic pharmaceutical company, has signed a definitive agreement to acquire US-based Concert Pharmaceuticals for an equity consideration of $576 million.
The deal will enable the Indian company to advance its treatment of Alopecia Areata, a dermatological disease, which results in hair loss.
Sun Pharma will acquire all outstanding shares of Concert through a tender offer for an upfront payment of $8 per share in cash. Concert stockholders will also get a non-tradeable contingent value right (CVR), entitling them to up to an additional $3.50 per share of common stock in cash, the Indian firm said in a stock exchange update.
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The CVR is payable upon deuruxolitinib (an oral inhibitor for treatment of Alopecia Areata, which is in late-stage development) achieving certain net sales milestones within specified periods. The transaction was approved by the boards of both companies, it added.
The upfront payment of $8 per share is at a premium of about 33% to Concert’s 30-day volume weighted average price as of January 18.
“Sun Pharma is building a global dermatology and ophthalmology franchise and aims to be a preferred development and commercial partner in these therapies worldwide. 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,” Abhay Gandhi, CEO, North America, at Sun Pharma said.
The transaction, which is subject to tender of a majority of outstanding shares of Concert’s common stock and receipt of regulatory approvals, is expected to be completed in the first quarter of 2023.
Following the successful closing of the tender offer, Sun Pharma will acquire all remaining shares of Concert that are not tendered. Further, it would also buy all shares of Concert’s preferred stock through a second-step merger at $8 per share plus one non-tradeable CVR.
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Nasdaq-listed Concert is a late-stage biotechnology firm pioneering the use of deuterium in medicinal chemistry, with a patent portfolio including its lead product candidate, deuruxolitinib.
Concert has completed efficacy and safety evaluation of deuruxolitinib in adult patients with moderate to severe Alopecia Areata in its THRIVE-AA Phase-3 clinical programme. Two open label, long-term extension studies are on in North America and Europe.
Sun Pharma’s immediate focus would be to follow Concert’s plan to submit a New Drug Application to the US Food and Drug Administration in the first half of 2023.
Alopecia Areata is an autoimmune disease in which the immune system attacks hair follicles, resulting in partial or complete loss of hair on the scalp and body. The onset of the disease can occur throughout life and affects both women and men and can be associated with serious psychological consequences, including anxiety and depression. Currently, there are limited treatment options available for the disease.
Moelis & Company was the financial advisor to Sun Pharma, while Davis Polk & Wardwell was the legal advisor. MTS Health Partners and Chestnut Partners were the financial advisors to Concert, and Goodwin Procter was its legal advisor. For the nine-month period ended September 2022, Concert had reported total revenue of $29,000 and a net loss of $90.6 million. As of September 30, Concert had about $148.9 million in cash and investments. Sun Pharma had net cash of $1.6 billion as of September 30, 2022.