Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has reported to the TASE that it is to acquire Auspex Pharmaceuticals Inc. (Nasdaq: ASPX). Teva is to buy all the outstanding shares of Auspex at $101.00 per share in cash for a total consideration of $3.2 billion in enterprise value. This is a 41% premium on Auspex's market cap of $2.26 billion at close of trade yesterday.
Teva said that the deal will enhance its revenue and earnings growth profile and strengthen its core central nervous system (CNS) franchise with the addition of Auspex’s portfolio of innovative medicines for people with movement disorders. The transaction has been unanimously approved by the boards of directors of both Teva and Auspex, and key shareholders of Auspex have entered into agreements indicating their support for the transaction.
Auspex is an innovative biopharmaceutical company specializing in applying deuterium chemistry to known molecules to create novel therapies with improved safety and efficacy profiles. Its lead investigational product, SD-809 (deutetrabenazine), which leverages Auspex’s deuterium technology platform, is being developed for the potential treatment of chorea associated with Huntington’s disease, tardive dyskinesia, and Tourette syndrome, with a pharmacokinetic profile that allows for lower doses resulting in a favorable safety profile.
In 2014, Auspex reported positive results from its Phase III clinical trial for SD-809 in Huntington’s disease, with plans to submit a New Drug Application (NDA) for this indication by mid-2015. SD-809 has been granted orphan drug designation for the treatment of Huntington's disease by the United States Food and Drug Administration (FDA), and Auspex expects regulatory approval and commercial launch for this indication in 2016 in the US. Topline results for Auspex’s Phase III ARM-TD study of SD-809 as a potential treatment for tardive dyskinesia, a disorder for which there are no approved therapies, are also expected in mid-2015. Other pipeline candidates include deuterated versions of pirfenidone for idiopathic pulmonary fibrosis and levodopa for Parkinson’s disease. Auspex has an additional 60 molecules in its patent portfolio.
Teva president and CEO Erez Vigodman said, "The acquisition of Auspex is a significant step in strengthening Teva’s leadership position in CNS and advances us into underserved movement disorder markets. We look forward to accelerating the development and commercialization of the Auspex portfolio based on our infrastructure, capabilities and strong commercial and R&D position in CNS."
Financial implications for Teva
Teva expects the deal to begin contributing to revenue in 2016 with the anticipated launch of SD-809 for Huntington’s disease and to be accretive to non-GAAP EPS beginning in 2017. with minimal dilution to non-GAAP EPS in the second half of 2015 and 2016. The transaction is expected to be funded with cash and is not subject to any financing contingencies, Teva added.
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2015
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