Drug developer SteadyMed has been building momentum to take on the established seller of a therapy for a rare lung disease. But the rivalry could be over before it even started. Instead of competing against the United Therapeutics line-up of therapies for pulmonary arterial hypertension, SteadyMed’s lead drug is now in line to join them.
United Therapeutics (NASDAQ: UTHR) announced Monday that it has reached a deal to acquire San Ramon, CA-based SteadyMed (NASDAQ: STDY) for $4.46 per share, which amounts to $141 million cash. That offer is a 68.3 percent premium over SteadyMed’s closing price on Friday. Under the deal, SteadyMed could gain up to $75 million more, tied to commercialization milestones for its drug.
Investors cheered the news, boosting SteadyMed’s stock price to $4.72, a more than 78 percent jump.
Pulmonary arterial hypertension (PAH) is a rare condition characterized by the development of high blood pressure in the arteries carrying blood to the lungs. Symptoms include shortness of breath, chest pain, and fainting. PAH is treated with treprostinil, an off-patent drug that can be administered in various ways. United Therapeutics, which splits its operations between Silver Spring, MD, and Research Triangle Park, NC, sells trepostinil under the name Remodulin in three different forms: injection, inhaled solution, and extended-release tablets. The drug is United Therapeutics’ top seller. Its $670.9 million in 2017 sales represented approximately 39 percent of the company’s $1.7 billion in total revenue.
SteadyMed’s lead therapeutic candidate is Treyvent, a product that administers treprostinil via a disposable pump and skin patch system that was developed to offer a steady flow of the drug for 48 hours. In its securities filings, SteadyMed says its technology can offer advantages compared to the United Therapeutics products, such as convenience, predictable and steady dosing, and reduction in the pain and skin reactions associated with the injectable form of the drug.
The SteadyMed technology has been tested in two clinical trials. The most common side effects reported were reddening of the skin and swelling. In its annual report, the company says it expects to file for FDA approval of Treyvent in the fourth quarter of this year. SteadyMed has set a preliminary price range of $125,000 to $175,000 annually per patient, which is in line with the cost of the United Therapeutics drugs.
SteadyMed’s board of directors has already approved the acquisition. The deal must also pass a federal anti-trust review. If the deal is scuttled for some reason, SteadyMed may be required to pay United Therapeutics a $4.5 million termination fee, according to the agreement.
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