Leawood-based Aratana Therapeutics Inc., a pet therapeutics company focused on developing and commercializing innovative therapeutics for dogs and cats, has agreed to sell for $245 million to Elanco Animal Health.
In conjunction with the transaction, Elanco also announced the formation of a commercial team dedicated to the veterinary specialty business. Aratana's field force has demonstrated the ability to technically communicate with veterinarians on pet therapeutics and if the proposed agreement is consummated, the Aratana field force would transition into this commercial team.
The deal is structured as a stock-for-stock transaction. Subject to the terms of the agreement, upon the closing of the transaction, Aratana stockholders will receive 0.1481 share of Elanco common stock and one contingent value right (CVR) for each share of Aratana common stock. Based on the exchange ratio and the closing prices on April 24, 2019, Aratana's stockholders would receive Elanco shares equivalent to an implied value of $4.75 per Aratana share, representing a premium of approximately 40 percent, plus one CVR per Aratana share. The CVR of $0.25 in cash per Aratana share shall be granted to Aratana stockholders as of the closing date and paid if capromorelin achieves certain sales levels on or before the end of 2021.
Including the CVR, the transaction represents aggregate value of up to approximately $245 million. The proposed transaction remains subject to customary closing conditions, including approval by Aratana stockholders and clearance under the Hart-Scott-Rodino Antitrust Improvements Act. The proposed transaction has been unanimously approved by the Aratana board.
The transaction would allow Elanco to integrate the Aratana portfolio of pet therapeutics into their companion animal therapeutics business, including a pipeline of therapeutic candidates and two marketed products. If the proposed transaction is consummated, we believe Aratana's portfolio will significantly benefit from Elanco's broader on-the-ground presence in the U.S. and Elanco's approach to lifecycle management, specifically the potential to initiate international approvals.
"This proposed transaction acknowledges Aratana's contribution of pet therapeutics to the animal health industry, specifically recognizing our strong track-record as a drug developer and our field team's unmatched expertise delivering innovation to veterinary specialists," stated Craig Tooman, President and Chief Executive Officer of Aratana. "As a newly independent, premier animal health company, we believe that Elanco would help expand our portfolio with their substantial resources and presence within the companion animal segment."
"Aratana has been one of the most innovative start-ups in animal health, bringing breakthrough solutions to the market," said Jeff Simmons, President and Chief Executive Officer of Elanco. "We look forward to putting greater energy behind these brands with our increased share of voice in the field and leveraging Aratana's strong presence in the specialty market to capitalize on new opportunities."