AcelRx to Acquire Tetraphase in an all-stock
transaction
Tetraphase equity holders to own 14.6% of the
combined company and receive Contingent Value Rights worth up to
$12.5 Million
Acquisition Expected to Close in Q2 2020
Companies Enter into a Co-Promotion
Agreement
Tetraphase Pharmaceuticals, Inc. (Nasdaq: TTPH), a
biopharmaceutical company focused on commercializing its novel
tetracycline XERAVA to treat serious and life-threatening
infections, today announced the execution of a definitive merger
agreement pursuant to which AcelRx Pharmaceuticals (Nasdaq: ACRX)
would acquire Tetraphase in a stock for stock transaction. Under
the terms of the agreement, Tetraphase stockholders will receive,
for each share of Tetraphase common stock, 0.6303 of a share of
AcelRx common stock, valued at approximately $14.4 million as of
the close of trading on March 13, 2020, and one contingent value
right (CVR), which would entitle the holders to receive aggregate
payments of up to $12.5 million for the achievement of future
XERAVA™ net sales milestones starting in 2021. The transaction was
unanimously approved by both the AcelRx and Tetraphase boards of
directors and is expected to close in the second quarter of 2020.
Select Tetraphase stockholders and warrant holders, including
Armistice Capital, LLC, holding in the aggregate approximately 31%
of Tetraphase’s outstanding common stock, have signed voting
agreements in favor of the transaction.
Concurrently with signing the merger agreement, Tetraphase and
AcelRx entered into a co-promotion agreement to market and promote
XERAVA™ for the treatment of complicated intra-abdominal infections
(cIAI) and DSUVIA® for the treatment of acute pain in medically
supervised settings. The co-promotion agreement will allow the
AcelRx and Tetraphase teams to benefit immediately from the
promotion of multiple products, leverage each company’s customer
relationships, and create efficiencies among commercial teams. The
combined sales team will cover in excess of 70% of each company’s
originally targeted hospitals.
“This transaction is an important move forward for Tetraphase
and more importantly, for XERAVA and the patients who need this
treatment,” said Larry Edwards, President and Chief Executive
Officer of Tetraphase. “We are excited to collaborate with AcelRx,
a partner whose strategic goals complement our own. We continue to
believe that XERAVA is a key addition to the hospital
anti-infective armamentarium, and believe that together with AcelRx
we will be able to more effectively bring new treatments to
patients in healthcare institutions.”
“We are excited to have reached agreement with Tetraphase, a
company with a well-established U.S. salesforce and a high-growth
hospital product that complements AcelRx’s commercial strategy,”
said Vince Angotti, Chief Executive Officer of AcelRx. “This
transaction highlights our focus on efficiently commercializing
DSUVIA with a salesforce promoting multiple products and is the
first step in our plan to create a growth platform to further
consolidate hospital-focused pharmaceutical companies and products.
We look forward to integrating XERAVA and the existing Tetraphase
commercial infrastructure with our own as we strengthen our
position on promoting innovative products to healthcare
institutions allowing patients access to new and improved
treatments.”
Based on the closing price of AcelRx stock on March 13, 2020,
the stock consideration to be received by Tetraphase equityholders
is valued at approximately $14.4 million, with approximately $7.4
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 payments of up to an additional $12.5 million in the
aggregate upon the achievement of net sales of XERAVA™ in the
United States of at least (i) $20 million during 2021, (ii) $35
million during any year ending on or before December 31, 2024 and
(iii) $55 million during any year ending on or before December 31,
2024. The total cost synergy expectation from the combined company
exceeds 90% of the Tetraphase operating expenses and are expected
to be fully realized in 2021.
Closing of the transaction is 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 is acting as financial advisor to
Tetraphase and has rendered a fairness opinion to Tetraphase’s
board of directors in connection with the transaction. Wilmer
Cutler Pickering Hale and Dorr LLP is acting as legal advisor to
Tetraphase in connection with the transaction.
About XERAVATM
XERAVA (eravacycline for injection) is a tetracycline class
antibacterial indicated for the treatment of complicated
intra-abdominal infections (cIAI) in patients 18 years of age and
older. XERAVA was investigated for the treatment of cIAI as part of
the Company's IGNITE (Investigating Gram-Negative Infections
Treated with Eravacycline) Phase 3 program. In the first pivotal
Phase 3 trial in patients with cIAI, twice-daily intravenous (IV)
XERAVA met the primary endpoint by demonstrating statistical
non-inferiority of clinical response compared to ertapenem and was
well-tolerated. In the second Phase 3 clinical trial in patients
with cIAI, twice-daily IV XERAVA met the primary endpoint by
demonstrating statistical non-inferiority of clinical response
compared to meropenem and was well-tolerated. In both trials,
XERAVA achieved high cure rates in patients with Gram-negative
pathogens, including resistant isolates.
XERAVATM Important Safety Information
XERAVA is a tetracycline class antibacterial indicated for the
treatment of complicated intra-abdominal infections in patients 18
years of age and older.
XERAVA is not indicated for the treatment of complicated urinary
tract infections.
To reduce the development of drug-resistant bacteria and
maintain the effectiveness of XERAVA and other antibacterial drugs,
XERAVA should be used only to treat or prevent infections that are
proven or strongly suspected to be caused by susceptible
bacteria.
XERAVA is contraindicated for use in patients with known
hypersensitivity to eravacycline, tetracycline-class antibacterial
drugs or to any of the excipients. Life-threatening
hypersensitivity (anaphylactic) reactions have been reported with
XERAVA.
The use of XERAVA during tooth development (last half of
pregnancy, infancy and childhood to the age of eight years) may
cause permanent discoloration of the teeth (yellow-gray-brown) and
enamel hypoplasia.
The use of XERAVA during the second and third trimester of
pregnancy, infancy and childhood up to the age of eight years may
cause reversible inhibition of bone growth.
Clostridium difficile associated diarrhea (CDAD) has been
reported with use of nearly all antibacterial agents and may range
in severity from mild diarrhea to fatal colitis.
The most common adverse reactions observed in clinical trials
(incidence ≥ 3%) were infusion site reactions, nausea, and
vomiting.
XERAVA is structurally similar to tetracycline-class
antibacterial drugs and may have similar adverse reactions. Adverse
reactions including photosensitivity, pseudotumor cerebri, and
anti-anabolic action which has led to increased blood urea
nitrogen, azotemia, acidosis, hyperphosphatemia, pancreatitis, and
abnormal liver function tests, have been reported for other
tetracycline-class antibacterial drugs, and may occur with XERAVA.
Discontinue XERAVA if any of these adverse reactions are
suspected.
To report SUSPECTED ADVERSE REACTIONS, contact Tetraphase
Pharmaceuticals Inc., at 1-833-7-XERAVA (1-833-793-7282) or FDA at
1‑800‑FDA-1088 or www.fda.gov/medwatch.
Please see full prescribing information for XERAVA.
About Tetraphase Pharmaceuticals, Inc.
Tetraphase Pharmaceuticals, Inc., is a biopharmaceutical company
using its proprietary chemistry technology to create novel
tetracyclines for serious and life-threatening conditions,
including infections caused by many of the multidrug-resistant
bacteria highlighted as urgent public health threats by the World
Health Organization and the Centers for Disease Control and
Prevention. The Company has created more than 3,000 novel
tetracycline compounds using its proprietary technology platform.
Tetraphase's lead product XERAVA™ is approved for the treatment of
complicated intra-abdominal infections by the U.S. Food and Drug
Administration and the European Medicines Agency. The Company’s
pipeline also includes antibiotics TP-271 and TP-6076, which are
Phase 2 ready, and TP-2846, which is in preclinical testing for
acute myeloid leukemia. The Company intends to out license its
pipeline candidates. Please visit www.tphase.com for more company
information.
Important Information for Investors and Stockholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. It does not constitute a prospectus or
prospectus equivalent document. In connection with the proposed
transaction between AcelRx and Tetraphase, AcelRx and Tetraphase
will file relevant materials with the Securities and Exchange
Commission (the “SEC”), including an AcelRx registration statement
on Form S-4 that will include a proxy statement of Tetraphase that
also constitutes a prospectus of AcelRx, and a definitive proxy
statement/prospectus will be mailed to stockholders of Tetraphase.
INVESTORS AND SECURITY HOLDERS OF TETRAPHASE ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders will be able to obtain free copies
of the registration statement and the proxy statement/prospectus
(when available) and other documents filed with the SEC by AcelRx
or Tetraphase through the website maintained by the SEC at
www.sec.gov. Copies of the documents filed with the SEC by
Tetraphase will be available free of charge on the
“Investors—Financials and Filings” portion of Tetraphase’s internet
website at www.tphase.com.
Tetraphase and its directors and executive officers may be
deemed to be participants in the solicitation of proxies in respect
of the transactions contemplated by the merger agreement.
Information regarding Tetraphase’s directors and executive officers
is contained in Tetraphase’s Annual Report on Form 10-K for the
year ended December 31, 2019, filed with the SEC on March 12, 2020.
Additional information regarding the direct and indirect interests
of Tetraphase’s directors and executive officers in the proposed
transaction will be included in the proxy statement when it is
filed with the SEC.
Forward-Looking Statements
Statements in this press release regarding the proposed
transaction between AcelRx and Tetraphase, the expected timetable
for completing the transaction, future financial and operating
results, benefits and synergies of the transaction, future
opportunities for the combined company and any other statements
about Tetraphase management’s future expectations, beliefs, goals,
plans or prospects constitute forward‑looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Any statements that are not statements of historical fact
(including statements containing “believes,” “anticipates,”
“plans,” “expects,” “may,” “will,” “would,” “intends,” “estimates”
and similar expressions) should also be considered to be
forward‑looking statements. There are a number of important factors
that could cause actual results or events to differ materially from
those indicated by such forward‑looking statements, including the
risk that the proposed merger 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 proposed merger, including the
adoption of the merger agreement by Tetraphase’s stockholders; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the merger agreement; the effect of
the announcement or pendency of the proposed merger on Tetraphase’s
business, operating results and relationships with customers,
suppliers, competitors and others; risks that the proposed merger
may disrupt Tetraphase’s current plans and business operations;
potential difficulties retaining employees as a result of the
proposed merger; 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 merger agreement or the proposed merger;
risks relating to product development and commercialization, demand
for Tetraphase’s products and limited number of customers; risks
associated with competition and other commercial and other risk
factors discussed in the "Risk Factors" section of our annual
report on Form 10-K for the year ended December 31, 2019, filed
with the SEC on March 12, 2020. In addition, the forward-looking
statements included in this press release represent our views as of
March 16, 2020. We anticipate that subsequent events and
developments will cause our views to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing Tetraphase’s views as of any later date.
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version on businesswire.com: https://www.businesswire.com/news/home/20200316005257/en/
Media and Investor Contact: Argot Partners Maeve
Conneighton 212-600-1902 maeve@argotpartners.com
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