Cipla Ltd has signed pacts to acquire Nasdaq-listed speciality pharmaceutical company Avenue Therapeutics Inc. for as much as $215 million (Rs 1,560 crore).
The Indian drugmaker, through unit InvaGen Pharmaceuticals Inc., will make the acquisition in two stages, it said in a stock-exchange filing.
In the first stage, InvaGen or its affiliates will acquire a 33.3% stake in Avenue’s via new shares for $35 million. Based on current assumptions, such stake is expected to consist of 5,833,333 shares of Avenue’s common stock issued at $6.00 per share.
After the first stage is completed, InvaGen or its affiliates will appoint three members (including one independent) on Avenue’s seven-member board of directors.
In the second stage, InvaGen or its affiliates will acquire the remaining shares of Avenue’s common stock for up to $180 million. This is currently expected to represent approximately $13.92 per share, Cipla said.
Shares of Avenue closed at $4.16 apiece on the Nasdaq stock exchange on Monday.
Avenue Therapeutics, a Fortress Biotech company, focuses on the development and commercialization of intravenous Tramadol for managing post-operating pain.
The transaction will be subject to Avenue stockholders’ and regulatory approvals, and other closing conditions.