Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) announced today that it will buy NuPathe for $144 million upfront, with the possibility of adding on approximately $124 million more if NuPathe achieves certain sales goals.

NuPathe's main draw is its migraine treatment medication ZECUITY, the only FDA-approved prescription migraine patch for adults with or without aura , which would expand Teva's medicine portfolio for treating central nervous system problems. Not only will Teva now include ZECUITY in its own line-up, but it will also have access to NuPathe's proprietary technology, including its transdermal delivery system for patients.

Teva's offer is for $3.65 per share in cash with perhaps up to $3.15 per share more if sales targets are met.

To snag NuPathe, Teva beat out Endo Health Solutions' (NASDAQ:ENDP) previously standing merger agreement. NuPathe CEO Armando Anido noted in a statement that "Teva's offer represents a premium of $0.80 per share (28%) over the upfront cash consideration offered by Endo, with equal contingent cash consideration. As a recognized leader in the field of diseases of the central nervous system, we believe that Teva is well-positioned to maximize ZECUITY'S potential."

For Endo Health Solutions, it will leave the transaction with a $5 million termination fee paid by NuPathe. "We believe that the agreement NuPathe has signed with Teva is positive news for NuPathe stockholders and as a result we accepted the termination fee and are now proceeding to withdraw our tender offer," said Rajiv De Silva, President and CEO, in a statement. "We believe our offer represented fair value for NuPathe. We will remain disciplined in our approach to M&A and will look to deploy capital on other opportunities to create value for our shareholders."

Barring any regulatory holdups, the Teva-NuPathe deal is expected to be closed next month.


Fool contributor Justin Loiseau has no position in any stocks mentioned. The Motley Fool recommends Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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