Tetraphase Pharmaceuticals, Inc. (Nasdaq:TTPH), a
biopharmaceutical company focused on commercializing its novel
tetracycline Xerava™ (eravacycline for injection) to treat serious
and life-threatening infections, today announced that its Board of
Directors has determined that the latest proposal from Melinta
Therapeutics, Inc. (“Melinta”) to acquire the Company is a
“Superior Offer” under the terms of the Agreement and Plan of
Merger, dated March 15, 2020, to which the Company is a party with
AcelRx Pharmaceuticals, Inc. (“AcelRx”) and its merger subsidiary
(the “AcelRx Merger Agreement”). In connection with this
determination and in accordance with the terms of the AcelRx Merger
Agreement, the Company has given notice to AcelRx of such
determination and of its intention to consider changing its
recommendation of the AcelRx Merger Agreement or terminating the
AcelRx Merger Agreement unless AcelRx proposes revisions to the
terms of the AcelRx Merger Agreement or makes another proposal on
or prior to Friday, May 29, 2020 that, if accepted, would result in
the Melinta proposal ceasing to be a Superior Offer.
Under the AcelRx Merger Agreement, Tetraphase stockholders will
receive, for each share of Tetraphase common stock, 0.6303 of a
share of AcelRx common stock, and one 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. Based on the closing price of AcelRx stock on March 13, 2020,
the last trading day prior to execution of the AcelRx Merger
Agreement, the stock consideration to be received by Tetraphase
equityholders under the AcelRx Merger Agreement was valued at
approximately $14.4 million, with approximately $7.4 million of
this amount allocated to the Company’s outstanding common stock
warrants. Based on the closing price of AcelRx common stock on May
21, 2020, the stock consideration to be received by Tetraphase
equityholders under the AcelRx Merger Agreement at closing is
valued at approximately $20.4 million, with approximately $10.5
million of this amount allocated to the Company’s outstanding
common stock warrants.
Under the latest proposal from Melinta, Melinta has offered to
acquire Tetraphase for $27.0 million in cash, plus an additional
$12.5 million in cash potentially payable under contingent value
rights (“CVR”) to be issued in the proposed acquisition. Under the
latest proposal from Melinta, the upfront cash consideration would
be as follows: (i) $1.21 per share of Tetraphase common stock
(including common stock underlying restricted stock units,
performance-based stock units and pre-funded warrants), subject to
downward adjustment in the event that the Company’s closing net
cash is less than $3.0 million, (ii) $1.75 per share of Tetraphase
common stock underlying the common stock warrants issued by the
Company in 2019, and (iii) $1.75 per share of Tetraphase common
stock underlying the common stock warrants issued by the Company in
2020. The Melinta proposal is not subject to any financing
contingencies. The definitive terms and conditions of a merger
agreement detailing the Melinta proposal have been fully
negotiated. If the Melinta proposal continues to constitute a
Superior Offer through Friday, May 29, 2020, the Tetraphase Board
will consider terminating the AcelRx Merger Agreement and entering
into the merger agreement with Melinta.
At this time, the Tetraphase Board has not changed its
recommendation with respect to the pending transaction with AcelRx,
and the Tetraphase Board (1) continues to recommend the AcelRx
Merger Agreement to its stockholders, (2) is not modifying or
withdrawing its recommendation with respect to the AcelRx Merger
Agreement and the merger, or proposing to do so, and (3) is not
making any recommendation with respect to the Melinta proposal or
the proposed merger agreement with Melinta.
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, Xerava™ (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, AcelRx and/or Melinta
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. If a negotiated transaction between Tetraphase
and Melinta is agreed, Tetraphase and Melinta will prepare
filing(s) related to the proposed transaction (including a tender
offer statement on Schedule TO, including an offer to purchase, a
related letter of transmittal and other tender offer documents
related to the transaction and any amendments thereto, and
Tetraphase would file a recommendation statement on Schedule 14D-9
with the SEC and any amendments thereto), and Tetraphase will
provide the filing(s) to its stockholders. Tetraphase, and possibly
Melinta, may also file other documents with the SEC regarding the
proposed transaction. This document is not a substitute for any
tender offer document or any other document which Tetraphase or
Melinta may file with the SEC in connection with the proposed
transaction. If a negotiated transaction between Tetraphase and
Melinta is agreed, investors and security holders are urged to read
the filing(s) and the other relevant materials with respect to the
proposed transaction with Melinta carefully in their entirety when
they become available before making any voting or investment
decision with respect to any proposed transaction with Melinta,
because they will contain important information about any proposed
transaction with Melinta.
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 or the Melinta proposal. 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, or the transactions contemplated by the Melinta
proposal, as applicable, 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 and any proposed transaction
contemplated by Melinta, the expected timetable for completing the
transactions, 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 determinations made by the Board regarding the
Melinta proposal; actions of AcelRx or any other party in response
to any discussions with Melinta; the results of discussions with
Melinta; the impact of actions of other parties with respect to any
discussions and the potential consummation of the proposed
transactions with AcelRx or Melinta; the outcome of any legal
proceedings that could be instituted against Tetraphase or its
directors related to the discussions, the Melinta proposal or the
AcelRx Merger Agreement; changes in the proposal from Melinta; the
risk that the transactions contemplated by the AcelRx Merger
Agreement or the Melinta proposal 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, or with respect to
any definitive agreements for the Melinta proposal; 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 or the definitive agreements for the
Melinta proposal on Tetraphase’s business, operating results, and
relationships with customers, suppliers, competitors and others;
risks that the transactions contemplated by the AcelRx Merger
Agreement or the Melinta proposal 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 or the Melinta proposal or the transactions contemplated
thereby; 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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