Sun Pharma to acquire US based Concert for $576 million

Sun Pharmaceutical Industries Limited said on Thursday it will acquire U.S.-based Concert Pharmaceuticals in cash consideration for $576 million. The acquisition would help the company to gain access to an experimental drug for treating patchy baldness.

Concert is developing deuruxolitinib which is being evaluated for treatment for autoimmune condition alopecia areata, which results in patchy hair loss.

Sun Pharma said it will commence a tender offer to acquire Concert at $8 per share, a premium of 16% to the stock's last close.

"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," said the company in its regulatory filing.

Concert stockholders will also receive a non-tradeable CVR, which entitles Concert stockholders to receive up to an additional $3.50 per share 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.

Concert is a late-stage biotechnology company pioneering the use of deuterium in medicinal chemistry.

"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 filing stated.

The transaction is expected to be completed in the first quarter of 2023.

The company's scrip closed trading 0.24 per cent down at ₹1,037.05 on BSE.