Arbor Pharmaceuticals, a specialty pharmaceutical company headquartered in Atlanta, Georgia, and XenoPort, a biopharmaceutical company focused on commercializing HORIZANT, have signed a definitive agreement under which Arbor will acquire XenoPort for $7.03 per share in cash, or a total equity value of approximately $467 million. The purchase price per share represents a 60% premium to the closing price of XenoPort shares on May 20, 2016.

“We are pleased to be adding HORIZANT and the XenoPort pipeline to the growing portfolio of Arbor products,” said Ed Schutter, president and chief executive officer of Arbor. “We believe that XenoPort’s lead product HORIZANT offers patients and physicians a valuable treatment option for moderate-to-severe primary restless legs syndrome and postherpetic neuralgia. The XenoPort sales team has done an excellent job of growing HORIZANT, and we look forward to supporting them to continue this significant momentum.”

Vincent J. Angotti, chief executive officer of XenoPort, said, “This transaction provides immediate and substantial value to our stockholders, and we believe that Arbor is well positioned to provide the proper resources for a more expanded commercialization effort of HORIZANT. We evaluated many potential options to maximize the value for stockholders and believe this transaction represents a great outcome for XenoPort stockholders.”

Arbor will commence a tender offer to purchase all of the outstanding shares of XenoPort for $7.03 per share. Following the closing of the tender offer, the agreement provides for the parties to effect, as promptly as practicable, a merger that would result in all shares not tendered in the tender offer being converted into the right to receive $7.03 per share in cash. The transaction, which has been unanimously approved by both the Arbor board of directors and the XenoPort board of directors, is expected to close in the third quarter of 2016.

Closing of the tender offer and merger is subject to certain customary conditions, including the tender of more than 50% of all outstanding shares of XenoPort. The transaction is also subject to review by the U.S. Government under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, as amended, and other customary closing conditions.