Opiant Pharmaceuticals, developer of the opioid overdose treatment Narcan, has agreed to be bought by the specialty drug company Indivior in an all-cash deal announced Monday.
The deal has already been approved by the boards of directors of both companies, and is expected to close by the end of March. Terms hold that Indivior will pay $20 up front for each outstanding share of Opiant, reflecting a 111% premium to the target’s share price on Friday.
Opiant investors will also receive so-called contingent value rights, or CVRs, that could be worth as much as $8 per share and bump the deal’s total value to roughly $145 million. Often, biopharma dealmakers use these contingent payments as a way to hedge their bets on a target company and its pipeline of experimental programs. The recent acquisitions of Epizyme, Zogenix, Radius Health and Akouos each included CVRs.
In Opiant’s case, the CVRs payments depend on one of its experimental medicines, OPNT003, hitting certain revenue milestones. OPNT003 is a nasal formulation of nalmefene, a drug used to treat opioid overdose and alcohol dependence.
The Indivior acquisition “provides Opiant shareholders with immediate value in addition to the potential future upside from the CVRs,” said Roger Crystal, Opiant’s CEO, in a statement. “This transaction will also enable us to leverage Indivior’s commercial strength and resources to maximize the value of OPNT003 and our pipeline assets.”
Having gathered positive data from multiple studies, Opiant earlier this year began the process of filing OPNT003 to the Food and Drug Administration for approval. The company said Monday, in a separate announcement detailing its third quarter earnings, that it’s on track to complete the filing by the end of the year.
Opiant, which recorded $174,000 in revenue and a net operating loss of $9.6 million between July and September, could have a new and significant source of income should its medicine gain approval. In a note to clients, Max Herrmann, an analyst at the investment bank Stifel who covers Indivior, wrote that the buyer believes OPNT003 has the potential to deliver $150 million to $250 million in annual net revenue.
“With the low end of Indivior’s peak sales expectations ... almost equating to the upfront fee, let alone upside potential from OPNT003 sales and [Opiant’s] pipeline, we regard this as a financially astute move,” Herrmann wrote.
Alongside nasal nalmefene, Opiant is developing a nasal version of naltrexone as a treatment for alcohol use disorder. It’s also working on OPNT004, a drug for acute cannabinoid overdose.
“Opiant’s portfolio of product candidates is an excellent strategic fit that diversifies and strengthens our offerings, while Indivior’s strong commercial capabilities will propel a combined product pipeline with the potential to help patients along a continuum from addiction and rescue to recovery,” Indivior CEO Mark Crossley said in Monday’s statement.
Based in Virginia, Indivior is focused on treatments for addiction and mental illnesses. The company’s marketed products include the opioid addiction medication Suboxone and the schizophrenia therapy Perseris.
In recent years, Indivior’s business has come under fire amid an epidemic of opioid addiction and overdose deaths. In 2019, for example, a federal grand jury indicted the company for marketing practices surrounding a version of Suboxone administered under the tongue.
Health insurers Humana and Centene have also sued Indivior, claiming the drugmaker impeded generic versions of Suboxone from coming to market. A federal judge dismissed the lawsuits in 2021.