NuPathe Picks Teva as Merger Partner

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.

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