Teva Shells Out $3.2B to Buy Auspex Pharmaceuticals and Boost CNS Business; All Cash, No Debt
March 30, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Israel-based Teva Pharmaceutical Industries Ltd. announced today that it will acquire La Jolla, Calif.-based Auspex Pharmaceuticals , Inc. for approximately $3.2 billion in enterprise value and about $3.5 billion in equity value.
Under the deal, Teva will buy all of the outstanding shares of Auspex’s common stock for $101 per share in cash. Once the tender offer is completed, Teva will buy up all the remaining shares not tendered through a second-step merger at the same price. This will be paid to stockholders that tender their shares in the tender offer.
“The acquisition of Auspex is a significant step in strengthening Teva’s leadership position in CNS and advances us into underserved movement disorder markets,” said Erez Vigodman, president and chief executive officer of Teva in a statement. “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.”
This news follows rumors earlier this month that Teva was considering acquiring Mylan N.V., based in Canonsburg, Penn. Mylan is one of the largest generic and specialty pharmaceutical companies in the world, with about 1,400 different products it markets. Teva also focuses on generics, as well as specialty drugs and active pharmaceutical ingredients. It has a portfolio of more than 1,000 molecules.
Several analysts were skeptical of the Mylan rumors, partly due to limits on Teva’s ability to take on debt and partly because the company hasn’t really focused on the European and French market the way Mylan has. Auspex, on the other hand, focuses on the development and commercialization of drugs for people with movement disorders and other rare diseases, including so-called orphan disease that affect fewer than 200,000 people.
Auspex’s pipeline includes drug candidates for hyperkinetic movement disorders like chorea associated with Huntington’s disease, tardive dyskinesia and Tourette syndrome.
Most recently Auspex announced it had completed target enrollment in its pivotal clinical trial for SD-809 for the treatment of tardive dyskinesia. The disease affects about 500,000 people in the U.S. and is caused by medications used to treat schizophrenia and bipolar disease, as well as by certain drugs used to treat gastrointestinal disorders.
Because Teva is acquiring Auspex with cash, they take on no new debt. The deal is expected to provide the company with mid- to long-term revenue and potential earnings growth. Teva indicates it expects the deal will start adding to revenues in 2016 with the 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.”
“Teva has established itself as a global leader in CNS diseases, characterized by strong management and commercial execution,” said Pratik Shah, president and chief executive officer of Auspex in a statement. “Importantly, the Teva organization has a commitment to patients that matches our own in developing and commercializing treatments for patients who suffer from movement disorders. This transaction will enhance Auspex’s mission by bringing innovative therapies to patients across the world as quickly and efficiently as possible.”