This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

NuPathe Picks Teva as Merger Partner

Stocks in this article: TEVA PATH ENDP

NEW YORK (The Deal) -- Teva Pharmaceutical Industries (TEVA) won a bid to purchase Malvern, Pa.-based NuPathe (PATH) with an offer that came in at only $9 million more than its M&A rival, Endo Health Solutions (ENDP).

NuPathe said Tuesday it entered into an agreement with Teva for a tender offer in which Teva will make an up-front cash payment of $3.65 per share plus a contingent value right of $3.15 per share, dependent on sales of NuPathe's migraine drug patch Zecuity.

NuPathe needed a commercial organization to launch the drug, a single-use, battery-powered patch. Zecuity was approved by the Food and Drug Administration Jan. 17, 2013.

The bidding war for NuPathe is not surprising, considering analysts have signaled that specialty pharmaceutical companies will be in high demand as M&A candidates in 2014.

Teva is "a recognized leader in the field of diseases of the central nervous system," NuPathe CEO Armando Anido said in a statement. "We believe that Teva is well-positioned to maximize Zecuity's potential."

Anido continued, "Teva's offer represents a premium of $0.80 per share (28%) over the upfront cash consideration offered by Endo, with equal contingent cash consideration."

MTS Securities LLC, advised NuPathe and rendered a fairness opinion. Morgan, Lewis & Bockius LLP provided legal advice. Kirkland & Ellis LLP represented Teva.

NuPathe had agreed in December to the Endo merger, which valued NuPathe's equity at $2.85 per share, or about $105 million. The deal included an additional contingent payment of as much as $3.15 per share, or about $98 million, based on Zecuity sales.

In announcing the decision to go with Teva, NuPathe said that it had terminated its agreement with Endo, and its board had withdrawn the recommendation that stockholders accept Endo's offer to acquire outstanding shares of NuPathe's common stock.

The deal carried a $5 million breakup fee.

Endo said in a statement Tuesday it believed the Teva deals would be good for NuPathe shareholders as it formally withdrew its offer. The rejected suitor's CEO, Rajiv De Silva, said the company would continue to look for other opportunities.

Teva entered its bid for the company Jan. 7. Its contingent cash payments, which will not be publicly traded, include $2.15 per share in cash on net sales of Zecuity of at least $100 million in any four consecutive calendar quarters. Plus, Teva will pay $1.00 per share on net sales of the drug of at least $300 million in any four consecutive calendar quarters. Both contingencies would expire on the 60th day after the ninth anniversary of the first sale of Zecuity.

Consummation of the tender offer is subject to a minimum tender of a majority of outstanding NuPathe shares and other customary conditions. Both boards have approved the merger.

The price of NuPathe shares declined about 7% on the news, trading midday in New York at $4.07 per share, down from their closing price of $4.38 on Friday.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs