NuPathe Inc. today announced that it has terminated its agreement and plan of merger with Endo Health Solutions Inc. and its Board has withdrawn its recommendation that stockholders accept Endo's offer to acquire all outstanding shares of NuPathe common stock. NuPathe has also entered into an agreement and plan of merger with Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) under which Teva will acquire NuPathe for $3.65 per share in cash. In addition to the upfront cash payment, NuPathe stockholders will receive rights to receive additional cash payments of up to $3.15 per share if specified net sales of NuPathe's migraine treatment, ZECUITY®, are achieved over time.
"Teva's offer represents a premium of $0.80 per share (28%) over the upfront cash consideration offered by Endo, with equal contingent cash consideration," stated Armando Anido, chief executive officer of NuPathe. "As a recognized leader in the field of diseases of the central nervous system, we believe that Teva is well-positioned to maximize ZECUITY'S potential."
Under the terms of the agreement, an affiliate of Teva will promptly commence a tender offer to acquire all outstanding shares of NuPathe's common stock for $3.65 per share in cash and the right to receive contingent cash consideration payments of up to $3.15 per share if specified net sales thresholds for NuPathe's ZECUITY are achieved. The contingent cash consideration payments, which will not be publicly traded, are as follows:
•$2.15 per share in cash payable upon net sales of ZECUITY of at least $100 million in any four consecutive calendar quarters, on or prior to the 60th day following the ninth anniversary of the date of the first commercial sale of ZECUITY; and
•$1.00 per share in cash payable upon net sales of ZECUITY of at least $300 million in any four consecutive calendar quarters, on or prior to the 60th day following the ninth anniversary of the date of the first commercial sale of ZECUITY.
The affiliate of Teva that consummates the tender offer will enter into a separate Contingent Cash Consideration Agreement with American Stock Transfer & Trust Company. The stockholders of NuPathe will be third party beneficiaries under this agreement. Pursuant to the terms of the Contingent Cash Consideration Agreement, Teva will guarantee the obligations of its affiliate to make the payments.
Following the successful completion of the tender offer, Teva will acquire all remaining shares not tendered in the tender offer through a second-step merger at the same price and with the obligation to make the same contingent cash consideration payments as to stockholders tendering their shares in the tender offer. The tender offer and withdrawal rights are expected to expire at 12:00 midnight, New York City time on the 20th business day after the launch of the tender offer, unless extended in accordance with the merger agreement and the applicable rules and regulations of the U.S. Securities and Exchange Commission.
The consummation of the tender offer is subject to various conditions, including a minimum tender of a majority of outstanding NuPathe shares on a fully-diluted basis, the expiration or termination of any applicable waiting periods under applicable competition laws, and other customary conditions. The board of directors of NuPathe unanimously approved the transaction.
The transaction is expected to be completed in February 2014.