M&A

United Therapeutics bags rival SteadyMed for a bargain basement deal worth up to $216M, eliminating patent threat

United Therapeutics $UTHR CEO Martine Rothblatt won’t be looking over her shoulders as a potential rival to United’s lead drug makes its way through an FDA review, battling over her patents. She bought it instead.

Martine Rothblatt

United this morning handed out a nice premium to acquire little SteadyMed $STDY, paying $4.46 for a stock that closed Friday at $2.65 with a market cap of $70 million. United will also hand over another $2.63 a share based on their progress in scoring an approval for SteadyMed’s drug/device combo for pulmonary arterial hypertension, which uses a reformulation of United’s Remodulin. The total value of the deal — including the contingency payment — stretches up to $216 million.

That’s a bargain.

SteadyMed has been patiently working through a stinging refuse-to-file rejection from the FDA last summer, setting back plans to launch Trevyent. But they endured. The company sat down with regulators and worked out a plan to satisfy some additional data demands, looking to field a “repeat of in vitro Design Verification testing on the final to-be-marketed Trevyent product, supported by pharmacokinetic modelling and Process Validation.”

At the same time, little SteadyMed has been fighting a successful battle to invalidate United’s crucial ‘393 patent for the active ingredient in Remodulin, Tyvaso and Orenitram. The buyout would presumably put an end to that fight. Remodulin made $670 million last year, more than a third of its $1.7 billion in revenue. Treprostinil accounts for the lion’s share of its cash flow.

SteadyMed outlined plans for a comeback application later this year, but its stock remained in the basement, allowing United to scoop it up cheap.


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