(Reuters) – UK-based Cycle Pharmaceuticals on Monday reaffirmed its offer to buy Vanda Pharmaceuticals in a deal that values the US drugmaker at $488 million, despite a regulatory setback for its stomach condition drug in September.
Vanda in June rejected takeover offers from Cycle Pharma and a revised bid from contract manufacturer Future Pak.
WHY IT’S IMPORTANT
Cycle has proposed to acquire Vanda for $8 per share, an 80% premium to Vanda’s last closing price. The potential offer follows a 4.5% decline in Vanda’s shares after the U.S Food and Drug Administration declined to approve its drug for a stomach condition that disrupts digestion.
CONTEXT
Vanda in April adopted a shareholder rights plan, known as a “poison pill”, to reduce the likelihood of a hostile takeover.
Vanda has three approved products, sleep disorder treatment Hetlioz, Fanapt for bipolar I disorder and Ponvory to treat multiple sclerosis.
KEY QUOTE
“We stand ready to work immediately with Vanda’s board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all Vanda shareholders,” Cycle Pharma said in a statement.
Vanda did not immediately respond to a Reuters request for comment.
MARKET REACTION
Shares of Vanda are up 12.3% at $4.99.
(Reporting by Sneha S K in Bengaluru; Editing by Vijay Kishore)
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