India’s Sun Pharma has acquired Concert Pharmaceuticals Inc, a Nasdaq-listed firm, for $576 mn to step up its presence in the US dermatology market.
Concert Pharma, a biotechnology firm, has an oral drug (deuruxolitinib) for treating Alopecia Areata, an autoimmune dermatological disease, in the late stage of development. The deal size could expand up to $827 mn (roughly Rs 6,800 crore) if the additional milestone based payments are made.
Sun Pharma informed the stock exchanges after-market hours on Thursday that it has executed a definitive agreement to acquire all outstanding shares of Concert Pharma through a tender offer for an upfront payment of $8 per share of common stock in cash. Concert stockholders will also receive up to an additional $3.5 per share upon the drug achieving certain sales milestones. A contingent value rights agreement has also been signed. The transaction was approved by the Boards of Directors of both companies.
The transaction is expected to be completed in the first quarter of 2023.
The upfront payment of $8.00 per share of common stock in cash represents a premium of approximately 33 percent to Concert’s 30-day volume weighted average price as of January 18, 2023, the last trading day prior to today’s announcement.
“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 3 clinical program and two open label, long-term extension studies are ongoing in North America and Europe,” said Sun Pharma’s notification.
Sun Pharma’s immediate focus would be to follow Concert’s plan to submit a New Drug Application (NDA) to the US Food and Drug Administration (FDA) in the first half of 2023. The US market accounts for roughly 30 percent of Sun Pharma’s consolidated business and the company ranks second there in terms of dermatology prescriptions. Sun Pharma has key specialty drugs like Ilumya (plaque psoriasis), Levulan(actinic keratoses), Absorica (acne) and Winlevi (acne vulgaris). In fact, its US pipeline has an under-development drug SCD-044 which is indicated for Psoriasis, Atopic Dermatitis.
The company did not disclose the share of the derma portfolio in its overall US sales.
For the nine-month period ending September 2022, Concert reported total revenue of $29000 and a net loss of $90.6 million. The R&D expense for that nine-month period was $75.7 million. As of September 30, 2022, Concert had approximately $148.9 million in cash, cash equivalents and investments. Sun Pharma had net cash of $1.6 billion as of September 30, 2022.
Alopecia Areata is an autoimmune disease in which the immune system attacks hair follicles, resulting in partial or complete loss of hair on the scalp and body. Alopecia Areata may affect up to 2.5 per cent of the US and global population during their lifetime.
There are currently limited treatment options available for Alopecia Areata.
“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.
Roger Tung, president and CEO of Concert, said the Sun Pharma deal delivers ‘substantial’ value to his company’s shareholders.