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Elanco Closes Acquisition of Pet Therapeutics Company Aratana Therapeutics
Friday 19 July 2019

19 July 2019 - US-based Elanco Animal Health (NYSE: ELAN) has closed the acquisition of pet therapeutics company Aratana Therapeutics (NASDAQ: PETX) in a stock deal worth USD 234m, the company said.
Aratana is focused on developing and commercialising innovative therapeutics for dogs and cats, and developer of the first-of-its-kind canine NSAID for osteoarthritis, Galliprant.
Elanco has also signed a development and commercialisation agreement with VetDC for Tanovea-CA1, the first US Food and Drug Administration conditionally approved canine lymphoma treatment.
In conjunction with these agreements, Elanco also announced the formation of a commercial team dedicated to the veterinary specialty business focused on bringing new and innovative products to the growing veterinary specialty category.
If the transaction is approved, the Aratana field force would transition into this commercial team.
Elanco has been a strong supporter of Aratana since its beginning, including investing as a limited partner in Cultivian, one of the venture capital funds that participated in Aratana's early financing rounds.
The relationship continued in 2016 with a global agreement for the exclusive rights to develop, manufacture and commercialize Galliprant, a first-of-its-kind canine NSAID osteoarthritis medicine.
This transaction would allow Elanco to capture the full value of this important, growing product. Aratana further contributes two additional marketed products to Elanco's portfolio: Entyce, the only FDA-approved veterinary therapeutic to stimulate appetite in dogs, and Nocita, a long-acting local anesthetic that provides up to 72 hours of post-operative pain relief following certain surgeries in dogs and cats.
The acquisition is structured as a stock-for-stock transaction, with a cash contingent value right of USD 0.25 to be granted to Aratana shareholders as of the closing date if capromorelin achieves certain sales levels before the end of 2021.
Subject to the terms of the agreement, upon the closing of the transaction, Aratana shareholders will receive 0.1481 shares of Elanco and one CVR for each share of Aratana.
Shares to be issued for the acquisition represent approximately 2% of Elanco shares outstanding.
Based on the exchange ratio and the closing prices from April 24, 2019, Aratana's shareholders would receive the number of Elanco shares equivalent to an implied value of USD 4.75 per Aratana share, representing a premium of approximately 40%, plus one CVR per Aratana share.
This stock portion of the deal is valued at approximately USD 234m, excluding the potential CVR payment, or up to USD 245m with the CVR payment.
Based in Ft. Collins, Colo., VetDC is a spinoff from Colorado State University established to identify, develop and commercialize oncology therapies for pets. Cancer is one of the leading causes of death in older dogs, and among the top concerns for pet owners.
Elanco and VetDC have reached an agreement for the commercialisation of Tanovea-CA1, the first FDA conditionally approved treatment for lymphoma in dogs.
It is an easy-to-administer, well-tolerated chemotherapy specifically designed to target and kill canine lymphoma cells via up to five 30-minute IV treatments.
While full FDA approval is pending, the initial response in a clinical study has been significant with a 100% response rate when used as a first-line treatment and 64% response rate for relapsed dogs.
Elanco (NYSE: ELAN) is a global animal health company that develops products and knowledge services to prevent and treat disease in food animals and pets in more than 90 countries.
Jefferies LLC is acting as the financial advisor and Bryan Cave Leighton Paisner LLP is acting as the legal advisor to Elanco on the Aratana transaction.
Details
Date Published: 19/07/2019
Target: Aratana Therapeutics
Country: USA
Deal Size: 234m (USD)
Sector: Pharmaceuticals
Type: Corporate acquisition
Financing: Stock
Status: Closed
Vendor:
Buyer: Elanco Animal Health
Buyer Advisor: Jefferies , Bryan Cave Leighton Paisner
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