UK-based Cycle Pharmaceuticals has offered its second, non-binding all-cash proposal to buy Nasdaq-listed Vanda Pharmaceuticals for $488m.
In June this year, Cycle Pharmaceuticals made a proposal to acquire 100% of Vanda’s issued and outstanding shares for a cash consideration of $8.00 per share, representing a total cash consideration of $466m.
The British pharmaceutical company said the latest offer of $8.00 per Vanda share is intended to benefit Vanda shareholders amid ongoing board refusal to engage.
Cycle’s renewed proposal offers an 80% premium over Vanda’s 11 October 2024, share price, up from a 58% premium on 05 June 2024, when Cycle’s initial offer was disclosed.
In the latest move, the UK-based pharma sent a letter to Vanda’s Board expressing interest in a transaction.
Vanda responded on 30 September, indicating a two-week review period for the proposal.
On 3 October, the Board of US-based Vanda Pharmaceuticals amended its bylaws to entrench its position, limiting stockholder meetings and nominations.
Two business days later, Vanda’s board rejected the proposal despite its active premium offer, Cycle Pharmaceuticals claimed.
Vanda Pharmaceuticals, on the other hand, said that the second proposal is identical to the previously rejected offer.
The firm’s Board concluded that the proposal undervalues the company and is not in the best interests of Vanda or its shareholders. As a result, the Board has decided not to pursue this proposal.
Cycle Pharmaceuticals, in a statement, said: “We urge Vanda shareholders to express their views on this proposal to the independent directors of the Vanda Board of Directors.
“We stand ready to work immediately with Vanda’s Board and management team to reach an agreement that would provide a compelling premium and certain cash value today for all Vanda shareholders.”
The offer comes after the US Food and Drug Administration (FDA) refused to approve Vanda’s New Drug Application (NDA) for Tradipitant in gastroparesis.
The rejection followed a failed Phase 3 trial, in which tradipitant failed to meet its primary endpoint and performed no better than a placebo.
Furthermore, the Washington-based drug maker plans to submit a separate NDA for tradipitant later this year, targeting motion sickness.
