Shares of Dova Pharmaceuticals opened 38% higher today on news that the firm will be acquired by Swedish Orphan Biovitrum. The deal is reportedly valued at $915 million or $29/share.
This morning Durham, N.C.-based Dova Pharmaceuticals Inc. (DOVA:NASDAQ)announced that it has entered into an agreement and plan of merger with Swedish Orphan Biovitrum AB (SOBI:OMX). The firm states that under the terms of the agreement, an indirect subsidiary of Sobi will commence a tender offer for all outstanding shares of Dova, whereby Dova stockholders will be offered an upfront payment for $27.50 per share in cash, along with one non-tradeable Contingent Value Right (CVR) that entitles them to an additional $1.50 per share in cash upon regulatory approval of Doptelet for the treatment of chemotherapy-induced thrombocytopenia (CIT), representing a total potential consideration of $29.00 per share, or up to $915 million on a fully diluted basis.
The company states that the upfront price of $27.50 per share represents a premium of 36% to Dova's September 27, 2019, closing price and a premium of 59% to the 30-day volume weighted average price. The company advised that that the transaction was unanimously approved by the Boards of Directors of both companies and is expected to close in Q4/19. The firm added that the transaction is subject to customary closing conditions, including the tender of more than 50% of all outstanding Dova shares at the expiration of the offer and termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The non-tradeable CVR will be paid upon the regulatory approval of Doptelet for the treatment of CIT. There can be no assurance such approval will occur or that any contingent payment will be made.
Dova says that it will file a recommendation to shareholders recommending they tender their shares to Sobi, subject to the terms of the definitive merger agreement. Some of the company's major stockholders, including Paul B. Manning, that represent a majority of the outstanding shares have entered into a Tender and Support Agreement committing them to tender their shares into the tender offer. The report notes that Sobi will acquire any shares of Dova not tendered into the tender offer through a merger for the same per share consideration as will be payable in the tender offer.
The proposed transaction is anticipated to enhance Sobi's position as a leader in hematology and orphan diseases and expand its presence in the U.S. Sobi further intends to leverage its strong international presence to maximize the availability and commercial potential of Doptelet globally.
David Zaccardelli, PharmD, president and CEO of Dova, commented, "We are extremely pleased to announce this merger with Sobi, which we believe will continue the expansion of DOPTELET in the U.S., and provide the necessary resources to maximize DOPTELET's availability to patients in both the US and internationally...On behalf of the Board of Directors, I'd like to thank our employees and shareholders for their continued support and dedication to our mission of providing novel and effective therapeutic options for patients with thrombocytopenia; we believe Sobi is ideally positioned to continue that mission."
Sobi's CEO and President Guido Oelkers, PhD, added, "The cadence of upcoming launches and approvals across indications and regions that Doptelet provides, enables us to further accelerate growth in our hematology franchise. There is a large unmet medical need within thrombocytopenia and for us this is a great opportunity to be able to give patients access to new and improved treatments. Furthermore, we are excited to welcome the 125 professionals from Dova who will greatly strengthen Sobi's hematology infrastructure and broaden our value chain in the U.S."
Sobi also announced the merger agreement today, stating that the acquisition of Dova provides it with Doptelet (avatrombopag), a differentiated on-market product in Chronic Immune Thrombocytopenia (ITP), a well established and growing market, for Chronic Liver Disease (CLD) and an ongoing phase 3 trial in Chemotherapy Induced Thrombocytopenia (CIT). The release noted that the acquisition of Dova will broaden the scope of Sobi's product portfolio into hematology and enhance Sobi's commercial presence in the U.S. Sobi claims that Doptelet will further diversify Sobi's revenue base adding a new growth driver and that company will leverage its expertise and existing infrastructure in hematology to grow Doptelet across its indications by expanding patient access outside the U.S.
Dova Pharmaceuticals is based in Durham, N.C., and was founded in 2016 in order to commercialize Doptelet (avatrombopag), a second generation small-molecule thrombopoietin receptor (TPO) agonist used in the treatment of thrombocytopenia by increasing platelet count. Doptelet is approved by both U.S. Food and Drug Administration and European Medicines Agency for treatment of thrombocytopenia (low platelet counts) in adults with chronic liver disease (CLD). Doptelet was also approved in the U.S. for Chronic Immune Thrombocytopenia (ITP) in adult patients who have had an insufficient response to a previous treatment, and filing is expected in early 2020 in Europe. ITP is a rare autoimmune bleeding disorder characterized by a low number of platelets. Chronic ITP is a rare autoimmune bleeding disorder characterized by low number of platelets, affecting approximately 60,000 adults in the U.S.
Sobi is headquartered in Stockholm, Sweden, and states that it is a specialized international biopharmaceutical company that is transforming the lives of people affected by rare diseases. The firm lists that it provides sustainable access to innovative therapies in the areas of a specialized international biopharmaceutical company, immunology and specialty care. Sobi employs approximately 1,300 worldwide and had annual revenues of SEK 9.1 billion in 2018.
Dova Pharmaceuticals started the day with a market capitalization of about $581.5 million. The company has 28.8 million shares outstanding, and as of Friday's close, had a short interest of around 6.1%. The stock has a 52-week price range of $5.62–28.10/share. This morning, DOVA shares opened much higher at $28.00 (+$7.81, +38.68%) over Friday's $20.19 closing price. The stock has traded on more than 12-times average volume today between $27.92 and $28.10/share and at present is trading at $27.97 (+$7.78, 38.53%).
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