Adds Deuruxolitinib, a Potential Best-in-Class
Oral JAK Inhibitor for the Treatment of Alopecia Areata, an
Autoimmune Dermatological Disease
Leverages Sun Pharma’s Global Infrastructure to
Provide Broad Access to Deuruxolitinib for Patients with Alopecia
Areata
Strengthens Sun Pharma’s Global Dermatology
Franchise by Adding a Late-Stage Product in an Area with
Significant Unmet Need
Sun Pharma to Commence Tender Offer to Acquire
All Outstanding Shares of Common Stock of Concert
Upfront Cash Payment of $8.00 per Share of
Common Stock, or Equity Consideration of $576 Million, and
Contingent Value Right for up to $3.50 per Share of Common Stock on
Achievement of Certain Time-Based Net Sales Milestones
Sun Pharmaceutical Industries Limited (Reuters: SUN.BO,
Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715 (together with its
subsidiaries and/or associated companies, “Sun Pharma”)) and
Concert Pharmaceuticals, Inc. (NASDAQ: CNCE) (“Concert”) today
announced that they have executed a definitive agreement under
which 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. The transaction
was approved by the Boards of Directors of both companies.
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The upfront payment of $8.00 per share of common stock in cash
represents a premium of approximately 33% to Concert’s 30-day
volume weighted average price as of January 18, 2023, the last
trading day prior to today’s announcement.
Concert is a late-stage biotechnology company pioneering the use
of deuterium in medicinal chemistry. Concert 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 autoimmune 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 3 clinical program 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 U.S. Food and Drug
Administration (FDA) in the first half of 2023.
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% of the United States and global population during their
lifetime1,2,3. The scalp is the most commonly affected area, but
any hair-bearing site can be affected alone or together with the
scalp. Onset of the disease can occur throughout life and affects
both women and men. Alopecia Areata can be associated with serious
psychological consequences, including anxiety and depression. 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. “There is a significant unmet need in the Alopecia
Areata space and we aim to build on Concert’s commitment to
supporting the Alopecia Areata patient community. We are
well-positioned to successfully bring this product to market
globally. I look forward to welcoming the exceptionally talented
Concert team who have worked tirelessly to develop the product to
bring it to market.”
“We are pleased to enter into this exciting transaction with Sun
Pharma, which delivers substantial value to our shareholders and is
the outcome of a thorough review process overseen by the Concert
Board,” stated Roger Tung, Ph.D., President and CEO of Concert.
“Our mission at Concert has always been to translate innovative
science to clinical solutions in order to meaningfully improve
patients’ lives. We are proud to see our team’s accomplishment –
creating a valuable new drug candidate for a major, underserved
disease – appropriately recognized and valued by Sun Pharma as a
means to expand their ongoing, international commitment to
dermatology. I am confident that this transaction will maximize
value for our shareholders and enhance access to deuruxolitinib for
patients with Alopecia Areata.”
Transaction Terms and Timeline to Closing
Under the terms of the merger agreement, Sun Pharma will
promptly 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.
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 U.S. and March 31, 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 U.S. and
December 31, 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 transaction is expected to be completed in the first quarter
of 2023. The transaction 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 successful 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.
For the nine-month period ending September 2022, Concert
reported total revenue of $29 thousand 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.
Advisors
Moelis & Company LLC is serving as financial advisor to Sun
Pharma, and Davis Polk & Wardwell LLP is serving as legal
advisor. MTS Health Partners, L.P. and Chestnut Partners, Inc. are
serving as financial advisors to Concert, and Goodwin Procter LLP
is serving as legal advisor. In addition, MTS Securities, LLC (an
affiliate of MTS Health Partners, L.P.) provided an opinion to the
Board of Directors of Concert regarding the fairness of the offer
consideration to be received by the holders of Concert common stock
in the transaction, subject to the qualifications and limitations
set forth therein.
About Sun Pharmaceutical Industries Limited (CIN -
L24230GJ1993PLC019050)
Sun Pharma is the world's fourth largest specialty generic
pharmaceutical company and India's top pharmaceutical company. A
vertically integrated business and a skilled team enables it to
deliver high-quality products, trusted by customers and patients in
over 100 countries across the world, at affordable prices. Its
global presence is supported by manufacturing facilities spread
across 6 continents and approved by multiple regulatory agencies,
coupled with a multi-cultural workforce comprising over 50
nationalities. Sun Pharma fosters excellence through innovation
supported by strong R&D capabilities across multiple R&D
centers, with investments of approximately 6% of annual revenues in
R&D. For further information, please visit www.sunpharma.com
& follow us on Twitter @SunPharma_Live
About Concert
Concert Pharmaceuticals is a late-stage clinical
biopharmaceutical company that is developing deuruxolitinib, a
novel, deuterated, oral JAK1/2 inhibitor. Concert has successfully
completed two Phase 3 trials with deuruxolitinib in adults with
Alopecia Areata, a serious autoimmune dermatological disease.
Concert is also evaluating the use of deuruxolitinib in other
indications and assessing a number of earlier-stage pipeline
candidates. For more information, please visit
www.concertpharma.com or follow us on Twitter, Instagram or
LinkedIn.
Forward Looking Statements
This communication contains express or implied forward-looking
statements related to Sun Pharmaceutical Industries Ltd. (“Sun
Pharma”), Concert Pharmaceuticals, Inc. (“Concert”) and
the acquisition of Concert by Sun Pharma, including express or
implied forward-looking statements about deuruxolitinib, its
therapeutic benefits and its regulatory development pathway, and
the future operations and performance of Sun Pharma and Concert.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements,
including all statements regarding the intent, belief or current
expectation of the companies and members of their senior management
teams. Words such as “will,” “could,” “would,” “should,” “expect,”
“plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,”
“project,” “potential,” “continue,” “target,” variations of such
words, and similar expressions are intended to identify such
forward-looking statements, although not all forward-looking
statements contain these identifying words. Examples of such
forward-looking statements include, but are not limited to, express
or implied:
- statements regarding the transaction and related matters,
prospective performance and opportunities, post-closing operations
and the outlook for the companies’ businesses;
- statements of targets, plans, objectives or goals for future
operations, including those related to Sun Pharma’s and Concert’s
products, product research, product development, product
introductions and product approvals as well as cooperation in
relation thereto;
- statements containing projections of or targets for revenues,
costs, income (or loss), earnings per share, capital expenditures,
dividends, capital structure, net financials and other financial
measures;
- statements regarding future economic performance, future
actions and outcome of contingencies such as legal proceedings;
and
- statements regarding the assumptions underlying or relating to
such statements.
These statements are based on current plans, estimates and
projections. By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific. Sun Pharma and Concert each caution that a number of
important factors, including those described in this document,
could cause actual results to differ materially from those
contemplated in any forward-looking statements.
Factors that may affect future results and may cause these
forward-looking statements to be inaccurate include, but are not
limited to: uncertainties as to the timing of the tender offer and
merger; uncertainties as to how many of Concert’s stockholders will
tender their stock in the offer; the possibility that competing
offers will be made; the possibility that various closing
conditions for the transaction may not be satisfied or waived,
including that a governmental entity may prohibit, delay or refuse
to grant approval for the consummation of the transaction (or only
grant approval subject to adverse conditions or limitations); the
possibility that the proposed transaction may not be completed in
the time frame expected by Sun Pharma and Concert, or at all;
failure to realize the anticipated benefits of the proposed
transaction in the time frame expected, or at all; the effects of
the transaction on relationships with employees, other business
partners or governmental entities; potential adverse reactions or
changes to business relationships resulting from the announcement
or completion of the proposed transaction; significant or
unexpected costs, charges or expenses resulting from the proposed
transaction; negative effects of this announcement or the
consummation of the proposed acquisition on the market price of Sun
Pharma’s shares or Concert’s common stock and/or Sun Pharma’s or
Concert’s operating results; the difficulty of predicting the
timing or outcome of regulatory approvals or actions; the risks
related to non-achievement of the CVR milestones and that holders
of the CVRs will not receive payments in respect of the CVRs; other
business effects, including the effects of industry, economic or
political conditions outside of the companies’ control; transaction
costs; actual or contingent liabilities; risk of litigation and/or
regulatory actions related to the proposed acquisition; adverse
impacts on business, operating results or financial condition in
the future due to pandemics, epidemics or outbreaks, such as
COVID-19, and their impact on Sun Pharma’s and Concert’s respective
businesses, operations, supply chain, patient enrollment and
retention, clinical trials, strategy, goals and anticipated
milestones; government-mandated or market-driven price decreases
for Sun Pharma’s or Concert’s products; introduction of competing
products; reliance on information technology; Sun Pharma’s or
Concert’s ability to successfully market current and new products;
Sun Pharma’s, Concert’s and their collaborators’ ability to
continue to conduct research and clinical programs; exposure to
product liability and legal proceedings and investigations; and
other risks and uncertainties detailed from time to time in
Concert’s periodic reports filed with the U.S. Securities and
Exchange Commission (the “SEC”) as well as the Schedule
14D-9 to be filed by Concert and the Schedule TO and related tender
offer documents to be filed by Sun Pharma and Foliage Merger Sub,
Inc., a wholly owned subsidiary of Sun Pharma
(“Purchaser”).
Any forward-looking statements speak only as of the date of this
communication and are made based on the current beliefs and
judgments of Sun Pharma’s and Concert’s management, and the reader
is cautioned not to rely on any forward-looking statements made by
Sun Pharma or Concert. Unlisted factors may present significant
additional obstacles to the realization of forward-looking
statements. Unless required by law, each of Sun Pharma and Concert
is under no duty and undertakes no obligation to update or revise
any forward-looking statement after the distribution of this
communication, whether as a result of new information, future
events or otherwise.
Additional Information And Where To Find It
The tender offer referenced in this document has not yet
commenced. This communication is for informational purposes only
and is neither an offer to purchase nor a solicitation of an offer
to sell securities of Concert, nor is it a substitute for any
tender offer materials that Sun Pharma, Concert or Purchaser will
file with the SEC. A solicitation and an offer to buy shares of
Concert will be made only pursuant to an offer to purchase and
related materials that Sun Pharma intends to file with the SEC. At
the time the tender offer is commenced, Sun Pharma and Purchaser
will file a Tender Offer Statement on Schedule TO with the SEC, and
Concert will file a Solicitation/Recommendation Statement on
Schedule 14D-9 with the SEC with respect to the tender offer.
CONCERT’S STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE
TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED
LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER DOCUMENTS) AND
THE SOLICITATION/RECOMMENDATION STATEMENT BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE TENDER OFFER. The Offer to
Purchase, the related Letter of Transmittal and certain other
tender offer documents, as well as the Solicitation/Recommendation
Statement, will be sent to all stockholders of Concert at no
expense to them. The Tender Offer Statement and the
Solicitation/Recommendation Statement will be made available for
free at the SEC’s web site at www.sec.gov. Additional copies may be
obtained for free by contacting Sun Pharma or Concert. Free copies
of these materials and certain other offering documents are
available by contacting Sun Pharma’s Investor Relations Department
at abhi.sharma@sunpharma.com, Concert’s Investor Relations
Department at ir@concertpharma.com, or by directing requests for
such materials to the information agent for the offer, which will
be named in the Tender Offer Statement. Copies of the documents
filed with the SEC by Concert will be available free of charge
under the “Investors” section of Concert’s internet website at
www.concertpharma.com.
In addition to the Solicitation/Recommendation Statement,
Concert files annual, quarterly and current reports and other
information with the SEC. You may read and copy any reports or
other information filed by Concert at the SEC public reference room
at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference
room. Concert’s filings with the SEC are also available for free to
the public from commercial document-retrieval services and at the
website maintained by the SEC at www.sec.gov.
1 Benigno M. A Large Cross-Sectional Survey Study of the
Prevalence of Alopecia Areata in the United States, Clinical,
Cosmetic and Investigational Dermatology 2020. 2 Lee HH et al. J Am
Acad Dermatol. 2020 Mar; 82(3):675-682. 3 Villasante et al. Clin
Cosmet Investig Dermatol. 2015 Jul 24;8:397-403.
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version on businesswire.com: https://www.businesswire.com/news/home/20230119005447/en/
Sun Pharma: Investors Dr. Abhishek Sharma +91 22
4324 2929 abhi.sharma@sunpharma.com Media (Global) Gaurav
Chugh +91 22 4324 5373 gaurav.chugh@sunpharma.com Media
(USA) Janet Metz Janet.Metz@sunpharma.com Concert:
Investors Justine Koenigsberg (781) 674-5284
ir@concertpharma.com
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