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Teva Expands CNS Specialty Business With Acquisition Of NuPathe

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) today announced that it has entered into a definitive agreement under which Teva will acquire NuPathe Inc. (Nasdaq:PATH) for $3.65 per share in cash, or approximately $144 million. In addition to the upfront cash payment, NuPathe shareholders will receive rights to receive additional cash payments of up to $3.15 per share if specified net sales of NuPathe’s migraine treatment, ZECUITY®, are achieved over time.

ZECUITY is the first and only prescription migraine patch approved by the FDA for the acute treatment of migraine with or without aura in adults. ZECUITY is a disposable, single-use, iontophoretic transdermal patch that actively delivers sumatriptan, the most widely prescribed migraine medication, through the skin. ZECUITY provides relief of both migraine headache pain and migraine-related nausea . ZECUITY was approved based upon an extensive development program with phase 3 trials that included 793 patients using nearly 10,000 ZECUITY patches. In these trials, ZECUITY demonstrated a favorable safety profile and was effective at relieving migraine headache pain and migraine-related nausea two hours after patch activation.

With the addition of NuPathe’s ZECUITY, Teva is expanding its portfolio of medicines that treat conditions affecting the central nervous system (CNS). Teva will now have access to NuPathe’s proprietary technology including its transdermal delivery system for patients.

“We believe that ZECUITY is a great fit within our existing U.S. CNS Business Unit, with near-term sales and significant commercial potential" stated Mike Derkacz, Vice President and General Manager, Teva CNS. “ZECUITY enables rapid transdermal delivery of sumatriptan and bypasses the GI tract to avoid issues with oral intake, addressing an important, unmet patient need, especially for those with migraine-related nausea. At Teva, we will leverage our unique Shared Solutions infrastructure to support patient utilization of this important new medicine for migraine sufferers.”

Under the terms of the agreement, an affiliate of Teva will promptly commence a tender offer to acquire all outstanding shares of NuPathe’s common stock for $3.65 per share in cash and the right to receive contingent cash consideration payments of up to $3.15 per share if specified net sales thresholds for NuPathe’s ZECUITY are achieved. The contingent cash consideration payments, which will not be publicly traded, are as follows:

  • $2.15 per share in cash payable upon net sales of ZECUITY of at least $100 million in any four consecutive calendar quarters, on or prior to the ninth anniversary of the date of the first commercial sale of ZECUITY; and
  • $1.00 per share in cash payable upon net sales of ZECUITY of at least $300 million in any four consecutive calendar quarters, on or prior to the ninth anniversary of the date of the first commercial sale of ZECUITY.

The affiliate of Teva that consummates the tender offer will enter into a separate Contingent Cash Consideration Agreement with American Stock Transfer & Trust Company. The stockholders of NuPathe will be third party beneficiaries under this agreement. Pursuant to the terms of the Contingent Cash Consideration Agreement, Teva will guarantee the obligations of its affiliate to make the payments.

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