Cycle Pharmaceuticals proposes $466m acquisition of Vanda Pharmaceuticals

In a significant development within the pharmaceutical industry, UK-based Cycle Pharmaceuticals has offered to acquire Nasdaq-listed Vanda Pharmaceuticals in an all-cash transaction valued at $466 million. Under this proposal, Cycle Pharmaceuticals plans to purchase shares of Vanda Pharmaceuticals at $8 per share, representing a substantial premium over recent closing prices.

Financial Details and Premiums Offered

The offer by Cycle Pharmaceuticals stands out due to the generous premiums it presents: a 98% increase over Vanda Pharmaceuticals’ closing share price on April 16, 2024, the day before an initial $4.05 per share offer was made public by Future Pak. Additionally, Cycle’s proposal marks a 63% premium above Vanda Pharmaceuticals’ closing price on May 23, 2024, the day before the offer was submitted.

Cycle Pharmaceuticals Offers $466 Million to Acquire Vanda Pharmaceuticals in All-Cash Deal

Background of Both Companies

Vanda Pharmaceuticals, a US-based biopharmaceutical company, is well-known for its dedication to developing and commercializing treatments for significant unmet medical needs. Its product portfolio includes Hetlioz (tasimelteon) for sleep-wake disorders, Fanapt (iloperidone) for schizophrenia, and Ponvory (ponesimod) for multiple sclerosis. On the other hand, Cycle Pharmaceuticals focuses on rare metabolic, immunological, and neurological genetic conditions, with six drugs currently available in the US market including Nityr tablets and Sajazir injections.

Strategic Fit and Future Prospects

Cycle Pharmaceuticals highlighted its extensive operational and distribution capabilities in the US as a key factor making it a strategic fit for acquiring Vanda Pharmaceuticals, particularly for enhancing the commercialization and development of Vanda’s existing therapies and clinical pipeline. The UK-based firm expressed confidence in its ability to quickly and efficiently integrate Vanda’s operations, citing deep industry knowledge and familiarity with Vanda’s product lineup.

Next Steps in the Acquisition Process

Cycle Pharmaceuticals anticipates completing due diligence within two to three weeks after gaining access to necessary information, aiming for a definitive agreement shortly thereafter. Vanda Pharmaceuticals has responded to the offer stating that its board of directors is currently evaluating the proposal to determine the best course of action for the company and its shareholders.

This acquisition could significantly alter the landscape of pharmaceuticals for rare diseases, combining the strengths of both companies to enhance their capabilities and expand their market presence, especially in the US.