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Cipla acquires US-based Avenue Therapeutics for $215 million

13 November, 2018 4:20 PM
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Cipla acquires US-based Avenue Therapeutics for $215 million

Cipla, India's fourth-largest drug maker on November 13, said its subsidiary , InvaGen Pharmaceuticals has entered into definitive agreements to acquire Nasdaq-listed speciality business firm Avenue Therapeutics for up to $215 million.

The acquisition will give Cipla access to specialty drug Tramadol delivered intravenously (IV) to manage post-operative pain.

Avenue is planning to submit a new drug application, or an NDA, for IV Tramadol with USFDA by the end of 2019. The drug is currently in phase-3 trial.

In the first stage, InvaGen will acquire a 33.3 percent stake in New York-based Avenue by buying new shares for $35 million. This stake is likely to consist of 5.83 million shares at $6 apiece.

The first stage is likely to be completed within four months. After the first stage is completed, InvaGen or its affiliates will appoint three directors (including one independent) on Avenue’s seven-member board.

In the second stage, InvaGen or its affiliates will acquire the remaining shares of Avenue’s common stock for up to $180 million for about $13.92 per share, Cipla said. The second stage is likely to be completed before April 2021.

Shares of Avenue closed at $4.16 apiece on the Nasdaq stock exchange on November 12.

The transaction will be subject to Avenue stockholders’ and regulatory approvals, and other closing conditions.

"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," said Umang Vohra, managing director and global chief executive officer at Cipla.

Indian drug makers like Sun Pharma, Lupin, Dr Reddy's and Cadila Healthcare have been spending millions of dollars to buy specialty drugs in US to beat pricing pressure in their generic portfolio.


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