Cycle Pharmaceuticals has proposed to acquire all issued and outstanding shares of Vanda Pharmaceuticals for $8 per share in cash, valuing the deal at $466m.
With a significant US presence and distribution network, Cycle sees a strong strategic alignment for Vanda’s marketed therapies and development pipeline.
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The offer represents a 98% premium over Vanda’s closing share price before the initial proposal from US-based CDMO Future Pak on 17 April 2024.
Future Pak had sought to purchase Vanda for between $7.25 and $7.75 per share.
Vanda’s shares have not reached the offered price since January 2023, at times dipping as low as $3.30.
Cycle’s advisors are ready to engage with Vanda’s management to expedite a definitive agreement.
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By GlobalDataVanda’s board will review Cycle’s unsolicited proposal to determine the best course for the company and its shareholders.
Cycle, which has a robust cash position, is confident that, after due diligence, the necessary financing will be secured to execute the deal.
Any debt financing will be fully underwritten before signing a definitive merger agreement, ensuring no financing contingencies.
Founded in 2012, Cycle focuses on developing drug treatments and related services for rare diseases such as rare metabolic, immunological and neurological genetic conditions, with an emphasis on multiple sclerosis.
In May 2024 the company launched its sixth product in the US market. The company also reported net sales of $109m and an operating profit of $40m in 2023.
Cycle Pharmaceuticals stated: “Cycle’s proposal represents a better outcome for shareholders (Vanda), who would receive all-cash upfront value exceeding that of Future Pak’s cash portion of its latest offer announced on 7 May 2024.
“It would also benefit patients, as Cycle has a proven commercial strategy in the US, a strong distribution footprint and an established track record of delivering medicines and individualised support to patients suffering from conditions with high unmet medical need.
“While we would have preferred to reach an agreement privately, Cycle is publicly disclosing our proposal for the benefit of Vanda shareholders and to encourage Vanda shareholders to express their views on this proposal to the independent directors of the Vanda board of directors.”
In December 2023, Vanda acquired rights to Actelion Pharmaceuticals’ (Janssen) Ponvory (ponesimod) to treat adults with relapsing forms of multiple sclerosis.
