Tetraphase Pharmaceuticals, Inc. (Nasdaq:TTPH), a
biopharmaceutical company focused on commercializing its novel
tetracycline XERAVATM (eravacycline for injection) to treat serious
and life-threatening infections, today announced that it has
entered into a second amendment to the Agreement and Plan of
Merger, dated March 15, 2020, asamended on May 27, 2020, to which
the Company is a party with AcelRx Pharmaceuticals, Inc. (“AcelRx”)
and its merger subsidiary (the “Merger Agreement”), to increase the
consideration payable to Tetraphase shareholders.
Under the amended Merger Agreement, Tetraphase stockholders will
receive, for each share of Tetraphase common stock, (1) $0.5872 in
cash and 0.7409 of a share of AcelRx common stock, representing
approximately $1.70 in upfront per share value, based on the
closing price of AcelRx’s common stock as of the close of trading
on May 28, 2020, in each case subject to downward adjustment in the
event that the Company’s closing net cash is less than $5.0
million, and (2) one contingent value right (“CVR”), which would
entitle the holders to receive potential aggregate payments of up
to $16.0 million in cash upon the achievement of certain future
XERAVA™ net sales milestones starting in 2021. Under the terms of
the Merger Agreement prior to the second amendment, upon the
consummation of the transaction, Tetraphase stockholders were
entitled to receive for each share of Tetraphase common stock, (1)
$0.2434 in cash and 0.7217 of a share of AcelRx common stock, in
each case subject to downward adjustment in the event that the
Company’s closing net cash is less than $5.0 million, and (2) one
CVR, which would have entitled the holders to receive potential
aggregate payments of up to $14.5 million in cash or AcelRx stock,
at AcelRx’s option upon the achievement of future XERAVA™ net sales
milestones starting in 2021.
AcelRx proposed the second amendment to the Merger Agreement in
response to a proposal from Melinta Therapeutics, Inc. (“Melinta”),
on May 27, 2020, to acquire Tetraphase for $34.0 million in cash
(or $1.52 per share of Tetraphase common stock), plus an additional
$16.0 million in cash potentially payable under CVRs upon the
achievement of certain future XERAVA™ net sales milestones starting
in 2021.
The boards of directors of Tetraphase and AcelRx have each
approved the second amendment to the Merger Agreement. Tetraphase’s
board of directors has determined that as a result of the second
amendment to the Merger Agreement with AcelRx, Melinta’s proposal
is not superior and recommends the Merger Agreement, as amended by
the amendment, to its stockholders.
Based on the closing price of AcelRx stock on May 28, 2020, the
total upfront consideration to be received by Tetraphase
equityholders is valued at approximately $37.0 million, with
approximately $18.7 million of this amount allocated to the
Company’s outstanding common stock warrants. In the merger,
Tetraphase stockholders would also be entitled to receive, for each
share of Tetraphase common stock, one non-tradeable CVR, the
holders of which will be entitled to receive potential payments of
up to an additional $16.0 million in cash in the aggregate upon the
achievement of net sales of XERAVA™ in the United States, payable
as follows: (i) $2.5 million upon annual net sales of $20.0 million
during 2021, (ii) $4.5 million upon annual net sales of $35.0
million during any year ending on or before December 31, 2024 and
(iii) $9.0 million upon annual net sales of $55.0 million during
any year ending on or before December 31, 2024.
The special meeting of Tetraphase’s stockholders to approve the
pending transaction is scheduled for June 8, 2020. The transaction
is expected to close in June 2020, subject to specified closing
conditions, including Tetraphase having a minimum amount of net
cash as of the closing and approval by Tetraphase stockholders.
Upon the closing of the transaction, Tetraphase will become a
privately held company and shares of Tetraphase’s common stock will
no longer be listed on any public market. Subject to certain
limited exceptions, the CVRs will be non-transferable.
Janney Montgomery Scott LLC is acting as financial advisor to
Tetraphase and Wilmer Cutler Pickering Hale and Dorr LLP is acting
as legal advisor.
About Tetraphase Pharmaceuticals, Inc.
Tetraphase Pharmaceuticals, Inc. is a biopharmaceutical company
using its proprietary chemistry technology to develop and
commercialize novel tetracyclines for serious and life-threatening
conditions, including bacterial infections caused by many
multidrug-resistant, or MDR, bacteria. There is a medical need for
new antibiotics as resistance to existing antibiotics increases.
The company’s commercial product, XERAVATM (eravacycline), a fully
synthetic fluorocycline, is an intravenous, or IV, antibiotic that
is approved for use as a first-line empiric monotherapy for the
treatment of MDR infections, including those found in complicated
intra-abdominal infections, or cIAI.
Additional Information and Where to Find it
In connection with the proposed transaction between Tetraphase
and AcelRx, AcelRx filed with the Securities and Exchange
Commission (the “SEC”) the Registration Statement containing a
document constituting a prospectus of AcelRx and a proxy statement
of Tetraphase. The Registration Statement was declared effective by
the SEC on April 24, 2020, and Tetraphase commenced mailing the
definitive proxy statement/prospectus to stockholders of Tetraphase
on April 28, 2020. Tetraphase and AcelRx also plan to file other
relevant documents with the SEC regarding the proposed transaction.
Investors and security holders are urged to read the definitive
proxy statement/prospectus and other relevant documents filed with
the SEC carefully and in their entirety because they contain
important information.
Investors and security holders can obtain free copies of the
proxy statement/prospectus and other documents filed with the SEC
by Tetraphase or AcelRx through the web site maintained by the SEC
at www.sec.gov. In addition, investors and security holders can
obtain free copies of the proxy statement/prospectus from
Tetraphase by written request to Tetraphase Pharmaceuticals, Inc.,
480 Arsenal Way, Watertown, Massachusetts 02472, Attn: Secretary or
by calling (617) 715-3600.
No Offer or Solicitation
This press release does not constitute an offer to sell, or the
solicitation of an offer to buy, any securities, nor a solicitation
of any vote or approval, with respect to the proposed transaction
or otherwise. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Participants in the Solicitation
Tetraphase and its directors and executive officers may be
deemed to be participants in the solicitation of proxies from
Tetraphase stockholders in respect of the transactions contemplated
by the AcelRx Merger Agreement. Information about Tetraphase’s
directors and executive officers is included in Tetraphase’s Annual
Report on Form 10-K for the year ended December 31, 2019, which was
filed with the SEC on March 12, 2020. Other information regarding
the participants in the solicitation of proxies in respect of the
transactions contemplated by the AcelRx Merger Agreement, and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in any registration
statement, prospectus, proxy statement and other relevant materials
to be filed with the SEC if and when they become available.
Forward-Looking Statements
Statements in this press release contain various forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements include, but
are not limited to, those regarding the transactions contemplated
by the AcelRx Merger Agreement, the expected timetable for
completing the transaction with AcelRx, future financial and
operating results, benefits and synergies of the transactions,
future opportunities for the combined company and any other
statements about future expectations, plans and prospects for
Tetraphase. The words “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “plan,” “potential,”
“predict,” “project,” “should,” “target,” “would” and similar
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words.
The following factors, among others, could cause actual results
to differ materially from those described in these forward-looking
statements: the risk that the transactions contemplated by the
AcelRx Merger Agreement may not be completed in a timely manner, or
at all, which may adversely affect Tetraphase’s business and the
price of its common stock; the failure to satisfy all of the
closing conditions of the transactions contemplated by the AcelRx
Merger Agreement, including the approval of the AcelRx Merger
Agreement by Tetraphase’s stockholders; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the AcelRx Merger Agreement; the effect of the
announcement or pendency of the transactions contemplated by the
AcelRx Merger Agreement on Tetraphase’s business, operating
results, and relationships with customers, suppliers, competitors
and others; risks that the transactions contemplated by the AcelRx
Merger Agreement may disrupt Tetraphase’s current plans and
business operations; risks related to the diverting of management’s
attention from Tetraphase’s ongoing business operations; the
outcome of any legal proceedings that may be instituted against
Tetraphase related to the AcelRx Merger Agreement or the
transactions contemplated by the AcelRx Merger Agreement; risks
relating to Tetraphase’s ability to successfully commercialize
XERAVA; concerns with or threats of, or the consequences of,
pandemics, contagious diseases or health epidemics, including
COVID-19; general economic and market conditions and the risk
factors set forth under the caption “Risk Factors” in Tetraphase’s
Quarterly Report on Form 10-Q for the period ended March 31, 2020
filed with the SEC on May 7, 2020 and in any other subsequent
filings made by Tetraphase with the SEC. Any forward-looking
statements contained in this press release speak only as of the
date hereof, and Tetraphase specifically disclaims any obligation
to update any forward-looking statements, whether as a result of
new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20200529005335/en/
Media and Investors: Argot Partners Maeve Conneighton
212-600-1902 maeve@argotpartners.com
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