Drug major Cipla Tuesday said its subsidiary InvaGen Pharmaceuticals Inc has entered into definitive agreements to acquire US-based speciality business firm Avenue Therapeutics for up to USD 215 million (around Rs 1,560 crore).
Cipal said it intends to acquire Avenue Therapeutics, Inc, a Fortress Biotech company, in two stages.
Avenue Therapeutics is focused on development and commercialisation of intravenous (IV) Tramadol, a painkiller.
“At the first stage closing, InvaGen or its affiliates will acquire, through the issuance by Avenue of new shares, shares representing a 33.3 per cent stake in Avenue’s capital stock on a fully diluted basis for USD 35 million,” Cipla said in a regulatory filling.
Simultaneously, with the closing of the stock issuance, InvaGen or its affiliates will appoint three members (including one independent) on Avenue’s seven-member board of directors, the company added.
At the second stage, InvaGen or its affiliates will acquire the remaining shares of Avenue’s common stock, for up to USD 180 million in the aggregate.
Cipla said the second stage closing is subject to the certain conditions, including those related to US FDA approval and the absence of any Risk Evaluation and Mitigation Strategy (REMS) or similar restrictions with respect to IV Tramadol.
“Our investment in and proposed acquisition of Avenue establishes our presence in the specialty institutional business in the US… This investment is in keeping with our stated intention to build a specialty pipeline in the US market,” Cipla Managing Director & Global Chief Executive Officer Umang Vohra said.
The transaction will be subject to Avenue stockholders’ and regulatory approvals, and other closing conditions, Cipla added.
Shares of Cipla were trading 0.69 per cent lower at Rs 528.25 apiece on BSE.