In order to gain access to Concert Pharmaceuticals Inc.'s experimental medicines for treating skin conditions, including patchy hair loss, Sun Pharmaceutical Industries Ltd. decided to purchase the US business for $576 million. The principal product candidate for Concert Pharmaceuticals, deuruxolitinib, a late-stage medication for the treatment of alopecia areata, an autoimmune dermatological condition that causes patchy hair loss, has a sizable patent portfolio.
The agreement will assist Sun Pharma's dermatology product line in the US gain momentum. In the first half of 2023, the business indicated its primary emphasis is on submitting a New Drug Application to the US Food and Drug Administration (FDA). Sun Pharma is establishing a global dermatological and ophthalmology franchise with the goal of becoming a top global partner for the research and marketing of these treatments. Deuruxolitinib, a late-stage drug that may be best-in-class for treating alopecia areata, is now available thanks to the Concert acquisition,
according to Sun Pharma CEO Abhay Gandhi. Sun Pharma will acquire all outstanding shares of Concert through a tender offer for an upfront payment of $8 per share of common stock in cash or $576 million in equity value. Concert stockholders will also receive a non-tradeable contingent value right entitling holders to receive up to an additional $3.50 per share of common stock in cash, payable upon the alopecia drug achieving certain net sales milestones within specified periods.
The transaction was approved by the boards of both companies. “We are pleased to enter into this exciting transaction with Sun Pharma, which delivers substantial value to our shareholders and is the outcome of a thorough review process overseen by the Concert board," said Roger Tung, president and chief executive officer of Concert Pharmaceuticals.
The transaction is expected to be completed in the first quarter of 2023. For the nine-month ended 30 September, Concert Pharmaceuticals reported revenue of $29,000 and a loss of $90.6 million. The research and development expense for that nine-month period was $75.7 million.
As of 30 September, Concert Pharmaceuticals had $148.9 million in cash, cash equivalents and investments. Sun Pharma had net cash of $1.6 billion as of 30 September. “I look forward to welcoming the exceptionally talented Concert team who have worked tirelessly to develop the product to bring it to market," said Sun Pharma’s Gandhi.
"There is a sizable unmet need in the alopecia areata arena, and we intend to expand on Concert's dedication to helping the patient population for alopecia areata. We are in a good position to successfully launch this product on a worldwide scale," Gandhi continued. Sun Pharma received legal and financial advice from Davis Polk and Wardwell LLP and Moelis and Co. LLC, respectively. Concert Pharmaceuticals received legal and financial advice from Goodwin Procter LLP, MTS Health Partners L.P., and Chestnut Partners, Inc.
