Cyclo Therapeutics Inc (CYTH)

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Did you catch this news?

Sucampo Acquires Vtesse Inc.

April 3, 2017

Transaction Valued at $200 Million Upfront

Diversifies Pipeline with Late Stage Program in Niemann-Pick Disease Type C1 (NPC-1)

Increases Company Focus on Specialized Diseases with High Unmet Need

Leverages Focus on Orphan and Pediatric Diseases

Expected to be Accretive to Earnings Beginning in 2019

Shareholders and Investors of Sucampo and Vtesse to Establish Foundation to Support Research Related to NPC Disease

Company to Host Conference Call Today at 8:30 a.m. EDT

ROCKVILLE, MD, and Gaithersburg, MD., April 3, 2017 (GLOBE NEWSWIRE) - Sucampo Pharmaceuticals, Inc. (Sucampo) (NASDAQ: SCMP), a global biopharmaceutical company, and Vtesse Inc. (Vtesse), a privately-held rare disease company, today announced that Sucampo has acquired Vtesse for upfront consideration of $200 million. Sucampo funded the acquisition through the issuance of 2,782,678 shares of Sucampo Class A common stock and $170 million of cash on hand; no external financing was utilized.

Strategic and Financial Benefits of the Transaction

Acquisition provides Sucampo with VTS-270, which is in a pivotal study for the treatment of Niemann-Pick Disease Type C1 (NPC-1)
Builds on Sucampo’s capabilities, global development platform and focus on specialized areas of high, unmet medical need
Fully-enrolled global pivotal clinical trial, with results expected in mid-2018
Sucampo provides capabilities and resources to accelerate the global development and potential commercialization of VTS-270
Aligns with Sucampo’s patient-focused mission and contributes to goal of building an increasingly diversified, global biopharmaceutical company
Product is expected to be launched and accretive to earnings beginning in 2019
Vtesse team will continue to support the advancement of VTS-270

About Niemann-Pick Disease Type C1

Rare genetic disorder that begins impacting the lives of those affected from birth to early adulthood.Clinical symptoms do not slow or reverse, with complications from neurological manifestations being the primary cause of eventual fatalities
Incidence of NPC-1 is estimated between 1:100,000 to 1:150,000 live births
Estimated 2,000-3,000 cases globally
NPC-1 results in early death in the vast majority of cases
Currently no approved treatments for the disease in the U.S.

About VTS-270

VTS-270 is a well-characterized mixture of 2-hydroxypropyl-ß-cyclodextrins (HPßCD) with a specific compositional fingerprint that distinguishes it from other HPßCD mixtures. It is administered by an intrathecal infusion to directly address the neurological manifestations of disease. Preclinical and early clinical studies suggest that the administration of VTS-270 may slow or stop certain indicators of NPC-1, an ultra-orphan, progressive and fatal disease caused by a defect in lipid transport within the cell. VTS-270, which is currently in a pivotal Phase 2b/3 trial, has been granted breakthrough therapy designation in the U.S. and orphan designation in both the U.S. and EU. Effective treatment of NPC remains a high unmet need, with no approved products for patients in the U.S. Results from the pivotal trial are expected in mid-2018.

“We are extremely pleased to announce the acquisition of Vtesse. Sucampo brings significant capabilities to Vtesse and its program, and we believe that this acquisition not only has the potential to make an important difference in the lives of patients, their families, and the dedicated physicians who care for them, but also to create value for shareholders. We welcome the employees of Vtesse to our team and look forward to accelerating the global development of VTS-270 in the hopes of bringing this novel treatment to patients afflicted by Niemann-Pick Disease Type C1 in the U.S. and around the globe,” said Peter Greenleaf, Chairman and Chief Executive Officer of Sucampo.

“The Vtesse team remains fully committed to the NPC community and will provide continuity to the patients, families, and clinical sites in cooperation with Sucampo. We recognize that Sucampo shares our commitment to the patients and caregivers of NPC and provides us with the best opportunity to bring this important treatment to NPC-1 patients in the U.S. and around the globe. Together, we will accelerate the global development and commercialization of VTS-270, relying on the complementary capabilities at Sucampo. Our commitment to the patients, families and physicians remains steadfast,” said Ben Machielse, Drs, President, Founder and Chief Executive Officer of Vtesse Inc.

Since its launch in January 2015, the Vtesse team has fully enrolled the registrational study of VTS-270 in NPC-1 at 20 clinical trial sites across the globe, providing broad access for study-eligible patients. The team has also been developing a device to assist healthcare providers with administration of VTS-270 to patients, and has supported compassionate use of the drug candidate.

Terms of the Transaction

Sucampo has acquired Vtesse for an upfront consideration of $200 million, and has agreed to pay Vtesse shareholders contingent consideration based on mid-single digit to double-digit royalties on global net sales of the product based on increasing net sales levels, and a share of net proceeds that may be generated from the monetization of the pediatric review voucher, which is expected to be granted in connection with the approval of the product in the U.S. The upfront payment was made in the form of issuance of 2,782,678 Sucampo Class A common shares to the Vtesse shareholders and the payment of $170 million (subject to a working capital adjustment) in cash on hand. No external financing was required for this acquisition. The Vtesse shareholders have agreed to a three-month lock-up of the common shares that were issued, and Sucampo has agreed to register the common shares for resale after the lock-up expires.

Vtesse employees are expected to join Sucampo to continue the important mission they have embarked upon at Vtesse of bringing an NPC therapy to market.

Additionally, Vtesse and Sucampo intend to establish a foundation after the closing of the acquisition to support research related to NPC disease. The establishment of this foundation is a testament to the high level of commitment the Vtesse and Sucampo teams have to scientific advancement regarding NPC. Subject to finalizing the terms of the foundation, Vtesse’s equity holders have set aside a portion of the transaction proceeds to contribute to the foundation, and Sucampo intends to match the Vtesse shareholder contribution from its corporate funds.

“At the time of Vtesse’s launch in January 2015, Vtesse’s original investors recognized the imperative of driving VTS-270 rapidly through clinical development to secure the data for regulatory approvals and to deliver the drug candidate to the NPC-1 community. Sucampo is a global partner that is fully behind the original mission of Vtesse and its investment group. We’re very proud to join their shareholders in establishing a foundation that will support further research of and awareness-building for NPC disease,” said David Mott, General Partner, NEA, and Vtesse’s Board Chair.
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I'm going on record to say CTDH HAS LOST THIS RACE.

Sure, I could be wrong, but I doubt it.