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Teva outbids Endo to secure $144m NuPathe takeover

By Zachary Brennan , 22-Jan-2014

Teva's $144m NuPathe takeover a headache for Endo?
Teva's $144m NuPathe takeover a headache for Endo?

Teva Pharmaceutical Industries has agreed to acquire NuPathe for $144m (€106m) and gain access to the company’s transdermal patch.

With the purchase, Teva will gain the first and only prescription migraine patch, known as Zecuity, which is a disposable, single-use, battery-operated iontophoretic transdermal patch that delivers sumatriptan – a widely used migraine treatment.

Endo in December announced it would acquire NuPathe  for $105M (€76M), though that deal seems to be dead in the water as Teva’s offer is considerably higher.

Teva will now have access to NuPathe’s proprietary technology including its transdermal delivery system for patients. However, Teva said they do not yet know whether they will be able to use this transdermal patch for other currently marketed drugs.

Under the terms of the agreement, an affiliate of Teva will commence a tender offer to acquire all outstanding shares of NuPathe’s common stock for $3.65 per share in cash and the right to receive contingent cash consideration payments of up to $3.15 per share if specified net sales thresholds for NuPathe’s Zecuity are achieved.

Zecuity was approved based upon Phase III trials that included 793 patients using nearly 10,000 patches. The drug demonstrated a favorable safety profile and was effective at relieving migraine headache pain and migraine-related nausea two hours after patch activation.

The contingent cash consideration payments, which will not be publicly traded, are as follows:

§     $2.15 per share in cash payable upon net sales of Zecuity of at least $100m in any four consecutive calendar quarters; and $1 per share in cash payable upon net sales of Zecuity of at least $300m in any four consecutive calendar quarters, on or prior to the ninth anniversary of the date of the first commercial sale of Zecuity.

Mike Derkacz, VP and General Manager of Teva CNS in the US, said, “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.”

The consummation of the tender offer is subject to various conditions, though the board of directors of NuPathe unanimously approved the transaction, which is expected to be completed in February 2014.

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