Mumbai-based Sun Pharmaceutical Industries has entered into an agreement with Checkpoint Therapeutics Inc, to acquire the immunotherapy and targeted-oncology company for a consideration of up to $355 million (Rs 3088 crore).
This is Sun Pharma’s second large transaction in two years, after it acquired US-based Concert Pharmaceuticals for $ 576 million (2023); besides being among its large overseas transactions after acquisition of Israeli drugmaker Taro Pharma. It also comes at a time the US administration runs a strident “America First” campaign.
Sun Pharma will make an upfront cash payment of $4.10 per share, or a consideration of up to $355 million, the companies said in a joint statement. And the transaction is expected to be completed, subject to regulatory and other approvals, in the second calendar quarter of 2025.
Checkpoint is a Nasdaq-listed commercial-stage company focused on developing novel treatments for patients with solid tumor cancers, they said, adding that Checkpoint has an approval from the US Food and Drug Administration for Unloxcyt (cosibelimab-ipdl) for the treatment of adults with metastatic cutaneous squamous cell carcinoma (cSCC) or locally advanced cSCC, who are not candidates for curative surgery or curative radiation.
Dilip Shanghvi, Sun Pharma Chairman and Managing Director said, “The acquisition further bolsters our innovative portfolio in onco-derm therapy.” Integrating the product into Sun Pharma’s global portfolio would give patients a treatment option, he added. James Oliviero, President and Chief Executive Officer, Checkpoint said, the transaction would “maximize value for our stockholders and provide accelerated access to Unloxcyt in the United States, Europe and other markets worldwide.”
Deal details
On completion of the transaction, Sun Pharma will acquire all outstanding shares of Checkpoint and its stockholders will receive, for each share of common stock they hold, an upfront cash payment of $4.10, without interest, and a non-transferable contingent value right (CVR) – entitling the stockholder to receive up to an additional $0.70 in cash, without interest, if cosibelimab is approved prior to certain deadlines in the European Union, subject to the centralized approval Procedure; or in Germany, France, Italy, Spain or the United Kingdom, subject to the terms and conditions in the contingent value rights agreement, the note said.
The upfront cash payment of $4.10 per share of common stock represents a premium of approximately 66 percent to Checkpoint’s closing share price on March 7, 2025, the last trading day prior to today’s announcement, it added.
Checkpoint, Sun Pharma and Fortress Biotech Inc (Checkpoint’s controlling stockholder) have entered into a royalty agreement, under which following the closing of the transaction Fortress would receive royalty payments based on future sales of cosibelimab during a specified term.
For the nine-month period ending September 2024, Checkpoint reported $0.04 million in revenue and a net loss of $27.3 million. Its research expense for the nine-month period was $19.3 million. As of September 30, 2024, Checkpoint had a cash balance of $4.7 million, outstanding accounts payable and accrued expenses of $15.6 million, and outstanding accounts payable and accrued expenses – related party of $2.0 million, the note said.
Review of alternatives
In connection with the evaluation of Checkpoint’s strategic alternatives, the Checkpoint board of directors formed a special committee of independent and disinterested directors, which led the review and negotiations for this transaction. “The Special Committee, with the assistance of its independent financial and legal advisors, conducted a
comprehensive review of potential strategic alternatives available to Checkpoint and ultimately determined that the compelling and certain cash consideration and meaningful upside presented by the CVRs in this transaction provides superior risk-adjusted value relative to Checkpoint’s standalone prospects and other available alternatives,” the note said.
The Special Committee unanimously approved, and recommended that Checkpoint’s Board approve, the proposed transaction, it added. Fortress, which holds a majority of Checkpoint’s outstanding voting power, has agreed to vote in favor of the transaction, it said.
