Vanda Turns Down Cycle, Future Pak Offers as Proposals ‘Undervalue’ Company

Businessman rejecting money in white envelope offered by his partner in the dark, anti bribery concept - panoramic banner

Businessman rejecting money in white envelope offered by his partner in the dark, anti bribery concept - panoramic banner

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Vanda Pharmaceuticals has rejected two unsolicited takeover offers, saying that they are “opportunistic attempts” to acquire the biotech at a heavily discounted price.

Pictured: Businessman rejecting an offer/iStock, Atstock Productions

Vanda Pharmaceuticals on Thursday announced that its board of directors rejected unsolicited takeover offers from Cycle Pharmaceuticals and Future Pak.

After a lengthy and careful review, as well as a consultation with independent financial and legal advisors, Vanda’s board has found that both proposals “substantially undervalue” the biotech and “are not in the best interests of the Company and its shareholders,” according to the announcement.

Vanda said its board considered the business in its entirety, including the development pipeline and growing commercial presence. The board also looked at the company’s ledger, particularly its “significant cash balance” and “robust revenue.”

Taken together, the board’s review found that Vanda is well-positioned for “significant long-term growth” as well as for creating strong value “far in excess” of the acquisition offers. “The proposals are opportunistic attempts to purchase the company’s shares at a discount to Vanda’s intrinsic value,” the biotech said.

The recent scramble to take over Vanda started in March 2024, when Future Pak made several unsolicited proposals to acquire the Washington-based biotech for $7.25 to $7.75 per share. Vanda rejected the offer in April 2024, with its board unanimously agreeing that the offer undervalues the company.

Future Pak made its latest bid in May 2024, offering $7.25 to $7.75 per share plus certain contingent value rights.

Trying to outbid Future Pak, Cycle also proposed buying Vanda for $8 per share last month, an offer that Cycle at the time claimed “delivers immediate, compelling and certain cash value” for Vanda “with a highly attractive premium.” Cycle’s acquisition proposal was for a total cash consideration of $466 million.

In rejecting these offers, Vanda cited its strong market position and potential for growth. However, the biotech is currently embroiled in a regulatory row with the FDA, which in February 2024 turned down Vanda’s application for Hetlioz (tasimelteon) to treat patients with insomnia, as characterized by having a hard time initiating sleep.

Vanda claimed that the FDA cited no deficiencies with its application, blasting the regulator’s decision to deny its application as a “part of an ongoing violation of the Federal Food, Drug, and Cosmetic Act (FDCA).” Under the FDCA, the FDA is required to give companies an opportunity for a hearing within 180 days after filing an application.

Vanda’s application for Hetlioz was filed on May 4, 2023, meaning that it should have been given the chance to petition for hearing by October 2023.

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
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