Teva Will Buy NuPathe, Maker of Migraine Patch

$144m acquisition marks victory over rival offer for U.S. company.

Teva Pharmaceuticals said yesterday it would be buying the U.S. drug maker NuPathe for $144 million in cash to expand its portfolio of medicines for treating the central nervous system.

The acquisition marked a victory for Teva as NuPathe announced it had terminated its takeover deal with Endo Health Solutions. NuPathe said Teva’s offer represented a premium of about 28% over the up-front cash payment offered by Endo and an equal amount of milestone-based payments.

The Israeli pharma giant said it would pay $3.65 a share plus up to $3.15 per share in milestone payments if net sales thresholds are achieved for NuPathe’s Zecuity treatment for acute migraine.

The acquisition provides Teva, the world’s largest maker of generic drugs, with access to NuPathe’s proprietary technology, including its transdermal delivery system for patients, and will enable it to expand its portfolio of medicines to treat conditions affecting the central nervous system.

“We believe that Zecuity is a great fit within our existing U.S. CNS business unit, with near-term sales and significant commercial potential,” said Mike Derkacz, general manager of Teva CNS.

Zecuity is the only prescription migraine patch approved by the U.S. Food and Drug Administration for the acute treatment of migraine in adults. A disposable, it is a single-use, transdermal patch that actively delivers sumatriptan, the most widely prescribed migraine medication for relief of migraine headache pain and migraine-related nausea.

Teva shares closed up 2.1% at 158.60 shekels ($45.44) in Tel Aviv Stock Exchange trading on Tuesday.

The acquisition adds to the run of good news for Teva, whose shares have sunk amid a failed strategy to wean the company off its best-selling drug, the multiple sclerosis treatment Copaxone, and a public boardroom battle last year that led to the departure of CEO Jeremy Levin.

Earlier this month the company named Erez Vigodman to lead a revival with deeper cost-cutting plans, and won a suit filed by Purdue Pharma that accused Teva of violating Purdue’s patent rights for the painkiller OxyContin. Since they bottomed out nearly a month ago, Teva TASE’s traded shares have risen more than 16%.

The contingent cash payments include $2.15 a share payable if net sales of Zecuity reaches at least $100 million in any four consecutive quarters, on or before the ninth anniversary of the date of the first commercial sale. Another $1 per share will be paid upon net sales of at least $300 million in any four consecutive quarters, likewise on or prior to the ninth anniversary of the date of Zecuity’s first commercial sale..

The deal is expected to be completed next month. 

Bloomberg
Ofer Vaknin