Avenue Therapeutics shares surge after acquisition interest from Cipla subsidiary InvaGen
Avenue Therapeutics Inc (NASDAQ:ATXI) shares jumped double digits after announcing that it was in talks to be acquired by InvaGen Pharmaceuticals Inc, a subsidiary of Indian drug giant Cipla.
The acquisition will take place in two stages, but the total deal value amounts to $215 million.
Shares of Avenue Therapeutics surged more than 30% to $5.49 in Tuesday pre-market trading.
InvaGen is looking to makes its mark on the US special hospital business.
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“This investment is in keeping with our stated intention to build a specialty pipeline in the US market, and reinforces Cipla’s innovation-led approach and commitment to caring for the life of patients,” said Umang Vohra, managing director and global chief executive officer at Cipla, in a company press release.
In first stage closing, InvaGen plans to acquire a 33.3% stake in Avenue Therapeutics, or around 5.83 million shares priced at $6 each, for a total of $35 million.
InvaGen will then purchase the remaining shares of the Fortress Biotech Inc (NASDAQ:FBIO) company’s common stock for up to $180 million.
The second stage closing will be subject to closing conditions, including approval by the Food and Drug Administration and other regulatory approval.
Avenue Therapeutics has been developing Tramadol, an intravenous painkiller.
“The novel intravenous drug delivery method of Tramadol addresses extremely crucial and hitherto unmet needs in pain management,” Vohra added.
Avenue Therapeutics’ seven-member board will also have to make room for three of InvaGen’s members, including one that will be independent.
Shareholders of Avenue Therapeutics will receive “certain contingent value rights” related to the net sales and gross profit targets of IV Tramadol, an intravenous painkiller being developed.
Contact Lenore Fedow at [email protected]
Follow her on Twitter: @LenoreMariee
Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/209103/avenue-therapeutics-shares-surge-after-acquisition-interest-from-cipla-subsidiary-invagen-209103.html
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