- Indian drugmaker Sun Pharmaceutical Industries said Thursday it will acquire Concert Pharmaceuticals for $576 million, giving it an experimental hair loss drug that could soon be submitted for U.S. approval.
- Concert, a small, Massachusetts-based biotechnology company, planned to seek U.S. approval of the drug in the first half of 2023 after reporting positive results from late-stage testing, but the company was on pace to run out of money by mid-year.
- Sun Pharma will pay $8 for each share of Concert, a 16% premium to the target’s closing stock on Wednesday. Concert investors will also receive a so-called contingent value right, or CVR, that could pay them an additional $3.50 per share if the hair loss drug hits certain milestones.
Concert’s oral drug, called deuruxolitinib, is part of a race to launch more effective treatments for alopecia areata, an autoimmune condition that causes patchy hair loss. Its positive Phase 3 results in May and August came as Eli Lilly and Incyte won Food and Drug Administration approval in June of the first systemic therapy for the condition. Not far behind, Pfizer in September said it expected decisions in 2023 for regulatory reviews of its treatment in the U.S., U.K., Europe, China and Japan.
All three of the drugs work by blocking proteins known as Janus kinases, or JAKS, which are involved in a range of immune disorders. Other JAK inhibitors are approved to treat arthritis, eczema and ulcerative colitis, but the class of drugs also comes with safety risks, and regulators have limited their use or required warnings, including for Lilly and Incyte’s drug for alopecia areata.
Concert was running out of runway to see its drug through approvals. At the end of September, the company said it held about $150 million in cash and investments — enough to meet its needs through mid-2023.
Sun said its immediate focus would be to follow Concert’s plan to submit the drug for approval in the first half of the year. “We are well-positioned to successfully bring this product to market globally,” said Abhay Gandhi, Sun’s North America CEO, in a statement.
The deal’s inclusion of a CVR has been somewhat of a recent trend, according to data compiled by BioPharma Dive. A trio of biotech buyouts last week included the agreements, as did Indivior’s purchase of Opiant Pharmaceuticals in November. Acquisitions last year of Epizyme, Zogenix, Radius Health and Akouos also included CVRs.
Concert investors’ CVR entitles them to receive $1 per share of common stock if deuruxolitinib net sales exceed $100 million by 2027. They would receive another $2.50 per share if sales exceed $500 million by 2029.
Concert reported a net loss of $90.6 million in the first nine months of 2022, with R&D expenses of about $76 million over that period.