NuPathe fell 7.5% to $4.05 and Teva gained 2.3% to $45.29 on the news.
The deal will see Teva pay $3.65 in cash for each share of NuPathe. NuPathe shareholders can also receive cash payments of up to $3.15 per share if certain net sales of NuPathe's ZECUITY migraine treatment are met over time.
As part of the deal shareholders will receive $2.15 per share in cash after net sales of ZECUITY reach at least $100 million in any four consecutive calendar quarters. The other $1 per share will be paid when net sales of the migraine treatment reach at least $300 million in any four consecutive calendar quarters. Both payment agreements are only active until "the 60th day following the ninth anniversary of the date of the first commercial sale of ZECUITY."
Due to acquisition by Teva, NuPathe has ended its agreement and plan to merge with Endo Health Solutions (ENDP).
TheStreet Ratings team rates Teva as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TEVA PHARMACEUTICALS (TEVA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow."