US-based pharmaceutical company Xeris Pharmaceuticals has agreed to acquire Strongbridge Biopharma in a stock and contingent value rights (CVRs) transaction valued at approximately $267m.
Strongbridge is a commercial-stage biopharmaceutical company that develops and commercialises rare disease therapies targeting unmet requirements.
Under the terms of a definitive agreement signed by the companies, Strongbridge shareholders will receive 0.7840 shares of Xeris Biopharma common stock as well as one non-tradeable CVR for each Strongbridge ordinary share.
Subject to customary closing conditions and Xeris and Strongbridge shareholders’ approval, the deal is set to conclude in the fourth quarter of this year.
Upon completion of the deal, Xeris and Strongbridge businesses will operate together under Xeris Biopharma. Existing Xeris shareholders will hold about 60% of the combined company and the remaining 40% will be held by Strongbridge shareholders.
Xeris chairman and CEO Paul Edick said: “This is a very compelling transaction that will create a scalable and diversified biopharmaceutical company increasingly oriented toward more specialty and rare disease products, positioning us for long-term product development and commercial success.
“Strongbridge’s attractive rare disease portfolio and capabilities are highly complementary with Xeris. Building on the continuing prescription growth of Gvoke with an enhanced and diversified growth profile, expanded and scalable salesforce, and expected cost-synergies, the combined company will be well positioned to deliver compelling long-term value to shareholders.”
This transaction is expected to create a rapidly growing biopharmaceutical company by combining the commercial assets and clinical pipeline of the two companies.
The combined company is expected to diversify its revenue base with Xeris’ Gvoke and Strongbridge’s Keveyis, as well as the launch of Recorlev in the first quarter of next year via Xeris’ commercial network.
With a commercial infrastructure focused on rare diseases and endocrinology, the combined entity will include 110 field sales representatives and 50 inside sales and support staff, at closing.
In addition to leveraging formulation technology to develop new products, the company will work to expand currently marketed products into new indications.
Xeris estimates the combined businesses to generate nearly $50m in pre-tax synergies from immediate savings by the end of next year.