Sunovion Pharmaceuticals and Cynapsus Therapeutics have signed a definitive agreement under which Sunovion will acquire Cynapsus for $40.50 per share in cash. The transaction has received unanimous approval by the board of directors of both companies and values Cynapsus at approximately $624 million (or approximately CAN$820 million).
The acquisition will be funded with cash on hand and is expected to close in the fourth quarter of 2016 (third quarter of Sunovion’s fiscal year). This agreement reflects Sunovion’s global strategy to expand and diversify its portfolio in key therapeutic areas, including neurology.
Through this transaction, Sunovion would acquire Cynapsus’ product candidate, APL-130277, which is designed to be a fast-acting, easy-to-use, on-demand treatment option for managing OFF episodes associated with Parkinson’s disease (PD).
“Parkinson’s disease is a chronic, progressive neurodegenerative disease that affects more than four million people around the world, and there is a significant need for new options to treat the OFF episodes associated with it,” said Nobuhiko Tamura, chairman and chief executive officer, Sunovion. “We believe that APL-130277 is a novel late-stage candidate with the potential to make a real difference for patients and their families.”
“With its leadership in therapies for central nervous system disorders and commercial experience specific to neurology, we believe Sunovion is best suited to advance APL-130277 in the United States and other key markets,” said Anthony J. Giovinazzo, president and CEO, Cynapsus. “This transaction culminates years of dedicated work by the Cynapsus team and represents significant value creation for our securityholders.”
The board of directors of Cynapsus, after consultation with its financial and legal advisors and based, in part, upon the unanimous recommendation of an independent special committee of the board of directors, has determined that the arrangement is in the best interest of Cynapsus and the consideration to be received by shareholders of Cynapsus is fair to such shareholders. The board of directors unanimously recommends that Cynapsus shareholders and warrantholders vote in favor of the transaction at a special meeting expected to be held on or about October 13, 2016.
The proposed sale of Cynapsus follows a full consideration of alternatives aimed at optimizing shareholder value for the company. “We believe that the proposed transaction with Sunovion results in the best outcome for our shareholders,” said Rochelle Stenzler, chair of the board of Cynapsus. “The transaction with Sunovion represents a significant premium to the current share price and we are recommending that our shareholders and warrantholders vote in favor of the transaction.”
The transaction will be completed by way of a plan of arrangement under the Canada Business Corporations Act. The arrangement will require approval of at least two-thirds of the votes cast by Cynapsus shareholders and warrantholders voting together as a single class at a special meeting of such securityholders of Cynapsus. Voting and Support Agreements in support of the transaction have been signed by all directors and officers of Cynapsus and the company’s largest shareholder representing in the aggregate, approximately 18.33% of the Cynapsus securities entitled to vote to approve the transaction.
Headquartered in Marlborough, Massachusetts, Sunovion is an indirect, wholly owned subsidiary of Sumitomo Dainippon Pharma. Sunovion Pharmaceuticals Europe, based in London, England, and Sunovion Pharmaceuticals Canada, based in Mississauga, Ontario, are wholly-owned direct subsidiaries of Sunovion Pharmaceuticals.