Home Brand News Cipla Announces Acquisition Agreement with Avenue Therapeutics

Cipla Announces Acquisition Agreement with Avenue Therapeutics

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InvaGen (a Cipla subsidiary) Announces
Acquisition Agreement with Avenue Therapeutics
for Specialty Hospital Business in the US.

Upon first stage closing, InvaGen Pharmaceuticals Inc., a Cipla subsidiary
(“InvaGen”), to acquire shares representing a 33.3% stake in Avenue
Therapeutics Inc. (“Avenue”) on a fully diluted basis for $35 million (currently
expected to be 5,833,333 shares at $6.00 per share)
 Upon second stage closing, InvaGen to purchase the remaining issued and
outstanding shares of Avenue pursuant to a merger transaction for up to $180
million in the aggregate (currently expected to be approximately $13.92 per
share), subject to certain terms to be outlined in the 8-K and proxy
 Post second stage closing, Avenue shareholders to receive certain contingent
value rights relating to certain annual net sales and gross profit targets of IV
Tramadol
Mumbai, India & New York, USA, November 13, 2018: InvaGen Pharmaceuticals Inc.
(“InvaGen”), a subsidiary of the leading global pharmaceutical company Cipla
Limited, today announced that it has entered into definitive agreements with two
closing stages for a proposed acquisition of Avenue Therapeutics, Inc. (NASDAQ: ATXI)
(“Avenue”), a Fortress Biotech (NASDAQ: FBIO) company focused on the
development and commercialization of intravenous (IV) Tramadol. The transaction
will be subject to Avenue stockholders’ and regulatory approvals, and other closing
conditions.
At the first stage closing, InvaGen or its affiliates will acquire, through the issuance by
Avenue of new shares, shares representing a 33.3% stake in Avenue’s capital stock on
a fully diluted basis for $35 million. Based on current assumptions, such stake is
expected to consist of 5,833,333 shares of Avenue’s common stock issued at $6.00 per
share. Simultaneously with the closing of the stock issuance, InvaGen or its affiliates will
appoint three members (including one independent) on Avenue’s seven-member
Board of Directors.
At the second stage closing, InvaGen or its affiliates will acquire the remaining shares
of Avenue’s common stock, pursuant to a reverse triangular merger with Avenue
remaining as the surviving entity, for up to $180 million in the aggregate, which is
currently expected to represent approximately $13.92 per share, subject to certain
terms to be outlined in the Form 8-K and proxy statement to be filed by Avenue with
the SEC in connection with the proposed transactions. The second stage closing is
subject to the satisfaction of certain closing conditions, including conditions
pertaining to US FDA approval, labeling, scheduling and the absence of any REMS or
similar restrictions in effect with respect to IV Tramadol.
Umang Vohra, Managing Director & Global Chief Executive Officer, Cipla, said: “Our
investment in and proposed acquisition of Avenue establishes our presence in the
specialty institutional business in the US. The novel intravenous drug delivery method
of Tramadol addresses extremely crucial and hitherto unmet needs in pain
management. This investment is in keeping with our stated intention to build a
specialty pipeline in the US market, and reinforces Cipla’s innovation-led approach
and commitment to caring for the life of patients.”
Lucy Lu, M.D., President & Chief Executive Officer, Avenue, said: “We are very pleased
to partner with InvaGen to accelerate the Phase 3 clinical development and
potential commercialization of IV Tramadol in the United States. IV Tramadol offers a
novel mechanism of action among intravenous analgesics and could be an
important new therapy that fills a significant gap in pain management. We believe
that this transaction creates significant value for our shareholders and creates a path
to maximize their return on investment.”
Torreya Capital LLC is acting as exclusive financial advisor to Avenue. Oppenheimer
& Co, Inc. provided a fairness opinion on the transaction to Avenue’s Board of
Directors. Alston & Bird LLP and Richards, Layton & Finger, P.A. served as legal counsel
to Avenue, and Hughes Hubbard & Reed LLP served as legal counsel to Cipla.

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