Sun Pharmaceutical Industries has announced an agreement to acquire Checkpoint Therapeutics, a Nasdaq-listed commercial-stage immunotherapy and targeted oncology company.
Checkpoint has received approval from the U.S. Food & Drug Administration (FDA) for UNLOXCYT (cosibelimab-ipdl) to treat adults with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) who are not candidates for curative surgery or radiation.
Dilip Shanghvi, Chairman and Managing Director of Sun Pharma, said, “Combining UNLOXCYT, an FDA-approved anti-PD-L1 treatment for advanced cutaneous squamous cell carcinoma, with Sun Pharma’s global presence means patients with cSCC may soon have access to an important, new treatment option. The acquisition further bolsters our innovative portfolio in onco-derm therapy.”
James Oliviero, President and Chief Executive Officer of Checkpoint, said, “I am proud of the dedication and passion of our team at Checkpoint that allowed us to achieve the first and only FDA-approved anti-PD-L1 treatment for patients with advanced cSCC, and we are excited to enter this transaction with Sun Pharma as the next step to bringing UNLOXCYT to cSCC patients in need of a differentiated immunotherapy treatment option. Sun Pharma is aligned with Checkpoint’s commitment to improving the lives of skin cancer patients, and I believe this transaction will maximize value for our stockholders and provide accelerated access to UNLOXCYT in the United States, Europe and other markets worldwide.”
Upon completion of the transaction, Sun Pharma will acquire all outstanding shares of Checkpoint. Checkpoint stockholders will receive an upfront cash payment of $4.10 per share, without interest, and a non-transferable contingent value right (CVR) of up to $0.70 per share, subject to the approval of cosibelimab in the European Union or select European countries. The upfront payment represents a 66.0 per cent premium to Checkpoint’s closing share price on March 7, 2025.
Checkpoint, Sun Pharma, and Fortress Biotech, Checkpoint’s controlling stockholder, have entered into a royalty agreement. Following the closing, Fortress will receive royalty payments on future sales of cosibelimab in lieu of previous royalty rights.
Checkpoint’s board of directors formed a special committee of independent directors to review strategic alternatives and negotiate the transaction. The special committee, assisted by independent financial and legal advisors, determined that the cash consideration and CVRs offered superior risk-adjusted value compared to other options. The committee recommended the deal, and Checkpoint’s board unanimously approved the transaction.
The transaction is expected to close in the second quarter of 2025, subject to regulatory approvals and stockholder approval. Fortress, holding a majority of Checkpoint’s voting power, has agreed to vote in favour of the acquisition.
For the nine-month period ending September 2024, Checkpoint reported $0.04 million in revenue and a net loss of $27.3 million. Research and development expenses for the period were $19.3 million. As of September 30, 2024, Checkpoint had a cash balance of $4.7 million, outstanding accounts payable and accrued expenses of $15.6 million, and outstanding accounts payable and accrued expenses – related party of $2.0 million.
Barack Ferrazzano Kirschbaum & Nagelberg LLP and Allen Overy Shearman Sterling US LLP are advising Sun Pharma. Locust Walk is acting as exclusive financial advisor to Checkpoint. Cooley LLP and Morris, Nichols, Arsht & Tunnell LLP are legal advisors to the special committee, with Kroll, LLC as its financial advisor. Alston & Bird LLP is providing legal counsel to Checkpoint.