Teva Strengthens its CNS Portfolio with its $3.2 Billion Acquisition of Auspex

Today, Teva Pharmaceutical Industries Ltd. announced that it has agreed to acquire central nervous system (CNS) drug developer Auspex Pharmaceuticals, Inc. for about $3.2 billion.

The companies said that they have entered into a definitive merger agreement, under which Teva will commence a tender offer for all of the outstanding Auspex shares at $101 per share in cash, representing a total consideration of approximately $3.2 billion in enterprise value and approximately $3.5 billion in equity value. Teva is paying a 42 percent premium on Auspex’s Friday close.

The deal is expected to strengthen Teva’s core CNS franchise with the addition of Auspex’s portfolio of innovative medicines for people with movement disorders, including Auspex’s lead candidate SD-809 (deutetrabenazine), which is in development for treatment of chorea associated with Huntington’s disease, tardive dyskinesia, and Tourette syndrome. The drug has already demonstrated positive results in a late-stage study in Huntington’s disease and in 2014, Auspex announced plans to submit a New Drug Application (NDA) for this indication by mid-2015. The US Food and Drug Administration (FDA) has granted orphan drug designation to SD-809 for chorea associated with Huntington’s disease, and Auspex expects regulatory approval and commercial launch for this indication in the US in 2016. Additionally, topline results from a Phase III study of the drug as a potential treatment for tardive dyskinesia, a disorder which there are no approved therapies, are also expected in mid-2015.

The transaction has been unanimously approved by both companies’ Boards of Directors. Teva said that the deal, which is projected to close in mid-2015, is expected to add to Teva’s per-share earnings, excluding one-time items, starting in 2017.

“The acquisition of Auspex is a significant step in strengthening Teva’s leadership position in CNS and advances us into underserved movement disorder markets. 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. As we have outlined recently, one of our key priorities for 2015 is to support Teva’s mid to long-term growth and create value for our shareholders with business development opportunities that are closely aligned with our core therapeutic areas. This transaction represents a first major step with regards to that commitment and we expect to continue this focus in the future,” said Teva’s President and CEO Erez Vigodman.

Auspex specializes in applying deuterium chemistry to known molecules to create novel therapies with improved safety and efficacy profiles. The company’s pipeline also includes SD-560, being developed for idiopathic pulmonary fibrosis (IPF), and SD-1077, being developed for Parkinson’s disease.

“We believe that the application of Auspex’s deuterium platform to known pharmaceuticals holds great promise across a wide spectrum of neurological diseases and associated movement disorders, including Huntington’s disease, tardive dyskinesia and Tourette syndrome. Auspex’s lead candidate, SD-809, offers compelling efficacy and safety benefits to patients, as demonstrated by the impressive Phase 3 topline data in Huntington’s disease announced in December 2014,” said Michael Hayden, MD, PhD, Teva’s President of Global R&D and Chief Scientific Officer. “Teva is well positioned to realize the robust IP potential of these investigational products with Auspex’s deuterated technology which could represent a significant breakthrough for patients who often have no sustainable symptom relief from their disease.”

Source: Teva Pharmaceutical Industries Ltd.

Last updated: 3/30/15; 11:40am EST


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