Nuvo Pharmaceuticals Inc. completed the acquisition of certain assets from specialty pharmaceutical company Aralez Pharmaceuticals Inc. for $110 million.
Under the terms of the agreement, Nuvo acquired a portfolio of more than 20 products from Aralez, which seeks to wind down its operations. It has acquired Aralez's Canadian specialty pharmaceutical business, which was formerly known as Tribute Pharmaceuticals Canada Inc.
The acquisition gives Nuvo access to its anti-inflammatory drug Cambia, allergy treatment Blexten, migraine treatment Suvexx, as well as Canadian distribution rights to its head lice treatment Resultz. In addition, the acquisition provides Nuvo with a platform to acquire and launch additional commercial products in Canada.
Nuvo has also acquired the worldwide rights and royalties from licensees for arthritis pain reliever Vimovo, heart drug Yosprala and global, excluding U.S. product rights, to MT400, which will be sold as Suvexx in Canada once registered and approved. It is currently sold in the U.S. as Treximet.
The company financed the acquisition through loans provided by certain funds of Deerfield Management Co. LP, a healthcare-specialized investor. The loan arrangements include a six-year amortizing loan of $60 million and an 18-month bridge loan of $6 million.
In addition, the funding includes the issuance by Nuvo to Deerfield of $52.5 million in six-year senior secured convertible notes, which will initially convertible into 19,444,444 common shares of Nuvo at a conversion price of $2.70 and about 25,555,556 million common share purchase warrants, where each such warrant is initially exercisable for one Nuvo common share for a period of six years at an exercise price of $3.53 per share.
The issuance of Nuvo's common shares upon the conversion of the notes and exercise of the warrants is subject to shareholder approval, which Nuvo plans to seek after the closing.
Nuvo said in its Dec. 31 news release that it expects the acquisition to be immediately and significantly accretive to revenue and adjusted EBITDA.
Aralez is currently seeking the approval of the U.S. Bankruptcy Court for the sale of its Toprol-XL franchise for $130 million to Deerfield Management, a lender to the company. The company said in a separate news release that it has completed the sale of the U.S. rights of Bezalip to Intercept Pharmaceuticals Inc. on Dec. 18.
The sale agreements are part of Aralez's decision to wind down operations and file for bankruptcy protection.
Aralez said it and certain of its affiliates will also continue their efforts to sell the assets not being sold in the transactions and intend to wind down their operations immediately following the completion of the sales.