Teva announced Monday a definitive agreement to acquire Auspex Pharmaceuticals for $101 per share in cash, or approximately $3.2 billion, strengthening its core central nervous system franchise. The price represents a 42 percent premium to Auspex's closing share price on March 27. Teva CEO Erez Vigodman said the deal "is a significant step in strengthening Teva’s leadership position in CNS and advances us into underserved movement disorder markets."
Vigodman remarked "as we have outlined recently, one of our key priorities for 2015 is to support Teva's mid to long-term growth," adding "this transaction represents a first major step with regards to that commitment and we expect to continue this focus in the future." Teva indicated that the transaction is expected to begin contributing to revenues in 2016 with the anticipated launch of Auspex's SD-809 (deutetrabenazine) for Huntington’s disease.
Auspex reported positive results last year from a Phase III trial of SD-809 in Huntington’s disease, with plans to submit a marketing filing to the FDA by mid-2015. Teva noted that Auspex specialises in applying deuterium chemistry to known molecules to create therapies with improved safety and efficacy profiles. The company's other pipeline candidates include deuterated versions of pirfenidone for idiopathic pulmonary fibrosis and levodopa for Parkinson’s disease.
According to Teva, products from Auspex will generate sales of $2 billion by 2020. The Israeli drugmaker indicated that the deal, which has been unanimously approved by the boards of both companies, will add to earnings per share beginning in 2017 and will be "meaningfully accretive" thereafter. Teva expects the acquisition to close in mid-2015.
Commenting on the transaction, Ori Hershkovitz of Nexthera Capital said "Teva and its competitors are under pressure to do deals for new technologies and the competition is intense." Hershkovitz added "this is a good deal for Teva. It will add to its product line in the central nervous system space and shows that it’s serious about growing its branded business."
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