Xeris Pharmaceuticals and Strongbridge Biopharma announced that they have entered into a definitive agreement under which Xeris will acquire Strongbridge for stock and contingent value rights (“CVRsâ€).
The agreement, including the maximum aggregate amount payable under the CVRs, values Strongbridge at approximately $267 million based on the closing price of Xeris Shares of $3.47 on May 21, 2021 and Strongbridge's fully diluted share capital.
The transaction, which has been unanimously approved by the boards of directors of both companies, with the exception of Jeffrey W. Sherman, M.D., a director in common to both companies, who abstained from the voting, is expected to close early in the fourth quarter of 2021, subject to the satisfaction of closing conditions.
Upon close of the transaction, the businesses of Xeris and Strongbridge will be combined under a new entity to be called Xeris Biopharma Holdings.
Under the terms of the agreement, at closing, Strongbridge Shareholders will receive a fixed exchange ratio of 0.7840 Xeris Biopharma Holdings Shares for each Strongbridge Share they own.
Based on the closing price of Xeris Shares on May 21, 2021, this represents approximately $2.72 per Strongbridge Share and a 12.9% premium to the closing price of Strongbridge Shares on May 21, 2021.
Strongbridge Shareholders will also receive 1 non-tradeable CVR for each Strongbridge Share they own, worth up to an additional $1.00 payable in cash or Xeris Biopharma Holdings Shares (at Xeris Biopharma Holdings’ election) upon achievement of the following triggering events: (i) the listing of at least one issued patent for KEVEYIS in the U.S. Food & Drug Administration’s Orange Book by the end of 2023 or at least $40 million in KEVEYIS annual net sales in 2023 ($0.25 per Strongbridge Share), (ii) achievement of at least $40 million in RECORLEV® annual net sales in 2023 ($0.25 per Strongbridge Share), and (iii) achievement of at least $80 million in RECORLEV annual net sales in 2024 ($0.50 per Strongbridge Share).
The minimum payment on the CVR is zero and the maximum payment is $1.00 in cash or Xeris Biopharma Holdings Shares at Xeris Biopharma Holdings' election.
Upon close of the transaction, current Xeris Shareholders are expected to own approximately 60% of the combined company, while current Strongbridge Shareholders are expected to own approximately 40%.
“This is a very compelling transaction that will create a scalable and diversified biopharmaceutical company increasingly oriented toward more specialty and rare disease products, positioning us for long-term product development and commercial success,†said Paul R. Edick, Chairman and Chief Executive Officer of Xeris.
“We are excited to combine with Xeris to drive the next phase of our growth,†said John H. Johnson, Chief Executive Officer of Strongbridge. ■