Biotechnology company Halozyme Therapeutics, Inc. (Nasdaq: HALO) is set to acquire pharmaceutical company Antares Pharma, Inc. (Nasdaq: ATRS) in a deal that will “create a leading drug delivery and specialty product company” and diversify revenue, SEC filings say.
Pursuant to the agreement, Halozyme will acquire Antares for $5.60 per share in cash, for a total valuation of approximately $960 million. This will be funded with existing cash on hand and new sources of debt.
As stated in the filings, the transaction will have financial and strategic benefits. In particular, the deal will have immediate revenue and non-GAAP earnings accretion and it will have long-term financial benefits; new business development will enhance long-term growth consistent with strategic goals and priorities; there will be opportunities for large market expansion in high-revenue sectors; Antares’ products are high-growth and durable with a “proven track record”; and the companies have complementary platforms.
According to Antares’ website, its medicines include Xyosted, “the first and only weekly auto-injector testosterone therapy”; Tlando, “an oral treatment for testosterone replacement therapy”; and Nocdurna is “the first and only sublingual tablet for the treatment of nocturia due to nocturnal polyuria in adults who wake up at least 2 times per night to urinate.”
“The addition of Antares, particularly with its best-in-class auto injector platform and specialty commercial business, augments Halozyme’s strategy, further strengthens our position as a leading drug delivery company and extends our strategy to include specialty products,” Dr. Helen Torley, president and chief executive officer of Halozyme, said in a press release.
Accordingly, the deal is expected to accelerate Halozyme’s top- and bottom-line growth through 2027, with additional drivers of growth past 2027 like new products, therapies and partnerships. As noted in the filings, Antares’ “business consists of a best-in-class, differentiated, royalty revenue generating auto injector platform business that offers broad licensing opportunity, and a commercial business, with three proprietary commercial products.” Halozyme will purportedly expand these opportunities via its ENHANZE platform.
Furthermore, Halozyme anticipates expanding Antares’ core platform and capabilities to drive growth and revenue, as well as adding intellectual property protections. Additionally, Antares’ “auto injector platform is suitable for use with a broad range of medications.” As a result, this versatility “enables a highly licensable business with significant revenue upside.”
“We are pleased to have reached this agreement with Halozyme, as this transaction showcases the value of Antares highly complementary business, provides our shareholders with attractive and certain value, and brings together industry-leading expertise and drug delivery platforms to accelerate growth and create new opportunities,” Robert F. Apple, president and chief executive officer of Antares, said in a statement.
Upon completion, Halozyme expects a “strong balance sheet with less than 3.5x net debt-to-EBITDA ratio at the time of transaction close” this ratio is expected to decrease after consummation.
The reverse triangular merger has been unanimously approved by both companies’ respective board of directors.
The April 13 deal is subject to customary closing conditions and expected to close in the first half of 2022.
Antares is represented by Skadden, Arps, Slate, Meagher & Flom LLP and its financial advisor is Jeffries LLC. Halozyme is represented by Weil, Gotshal & Manges LLP and its financial advisors are BofA Securities and Wells Fargo Securities LLC.
Prior to the announcement, Halozyme and Antares’ stock was valued at $41.62 and $3.74, respectively on April 12. When it was announced on April 13, Halozyme and Antares’ stocks were valued at $41.46 and $5.58, respectively. A few days later, on April 18, Halozyme’s stock closed at $41.74 and Antares’ stock closed at $5.57.
