Sun Pharma to acquire Concert Pharma

Sun Pharma will acquire all outstanding shares of Concert through a tender offer for an upfront payment of $8.00 per share of common stock in cash, or $576 million in equity value. Concert stockholders will also receive a non-tradeable Contingent Value Right (CVR) entitling holders to receive up to an additional $3.50 per share of common stock in cash, payable upon deuruxolitinib achieving certain net sales milestones within specified periods, subject to the terms and conditions contained in a contingent value rights agreement detailing the terms of the CVRs, a statement from Sun Pharma notified yesterday.

Under the terms of the merger agreement, Sun Pharma will commence a tender offer to acquire all outstanding shares of Concert common stock. Concert stockholders will be offered an upfront payment of $8.00 per share of common stock in cash. Concert’s Board of Directors unanimously recommends that Concert stockholders tender their shares in the tender offer, the statement said.

Further, according to the statement, Concert is a late-stage biotechnology company pioneering the use of deuterium in medicinal chemistry. It has an extensive patent portfolio, including its lead product candidate deuruxolitinib – an oral inhibitor of Janus kinases JAK1 and JAK2 for the treatment of Alopecia Areata, an auto-immune dermatological disease – which is in late-stage development. Concert has completed the evaluation of the efficacy and safety of deuruxolitinib in adult patients with moderate-to-severe Alopecia Areata in its Thrive-AA phase-III clinical programme and two open-label, long-term extension studies are ongoing in North America and Europe. Sun Pharma’s immediate focus would be to follow Concert’s plan to submit a New Drug Application (NDA) to the United States Food and Drug Administration (USFDA) in the first half of 2023.

“Sun Pharma is building a global dermatology and ophthalmology franchise and aims to be a preferred development and commercial partner in these therapies worldwide. The acquisition of Concert adds a late-stage, potential best-in-class treatment for Alopecia Areata in deuruxolitinib,” said Abhay Gandhi, CEO, North America, Sun Pharma, in the statement.

Concert stockholders will also receive a non-tradeable CVR, which entitles Concert stockholders to receive up to an additional $3.50 per share of common stock in cash, payable upon deuruxolitinib achieving certain net sales milestones within specified periods, subject to the terms and conditions contained in the contingent value rights agreement detailing the terms of the CVRs. These milestones, subject to terms and conditions as specified in the contingent value rights agreement, include: (i) $1.00 per share of common stock, payable the first time that in any fiscal year between the time of the first commercial sale of deuruxolitinib in the US and 31st March, 2027, net sales of deuruxolitinib is equal to or exceeds $100 million, and (ii) an additional $2.50 per share of common stock, payable the first time that in any period of four consecutive fiscal quarters between the time of the first commercial sale of deuruxolitinib in the US and 31st December, 2029, net sales of deuruxolitinib is equal to or exceeds $500 million. There can be no assurance that any payments will be made with respect to the CVRs, the statement added.

The transaction is expected to be completed in the first quarter of 2023. It is subject to the tender of a majority of the outstanding shares of Concert’s common stock, as well as the receipt of applicable regulatory approvals and other customary closing conditions. Following the closing of the tender offer, Sun Pharma will acquire all remaining shares of Concert that are not tendered into the tender offer and all shares of Concert’s preferred stock through a second-step merger at the same price of $8.00 per share of common stock, plus one non-tradeable CVR. The merger will be effected as soon as practicable after the closing of the tender offer, concluded the statement.