OPKO Health of Miami announced Thursday it will buy Transition Therapeutics, a Toronto-based clinical stage biotechnology company, in an all-stock transaction valued at about $60 million.
“This acquisition provides OPKO with two late stage drug candidates, each of which holds exceptional market potential,” said Phillip Frost, CEO and chairman of OPKO, in the news release. OPKO gains the potential of being first-to-market for a drug for type 2 diabetes and obesity and gets a phase 2 drug candidate for the treatment of androgen deficiency, or male sex hormone deficiency, he said.
Under the terms of the agreement approved by the boards of both companies, Transition Therapeutics security holders will receive approximately 6.4 million shares of OPKO common stock, or about $1.44 per Transition Therapeutics share. The companies expect the transaction to close during the second half of 2016, subject to approval of Transition Therapeutics stockholders and other customary conditions. The Miami-based law firm Greenberg Traurig represented OPKO in the transaction.
“OPKO is ideally positioned to leverage the potential of Transition’s clinical programs and bring these novel therapeutics to market for the benefit of patients,” said Tony F. Cruz, CEO and chairman of Transition Therapeutics. “OPKO has a strong pipeline of products coming to market that can provide future value for Transition Therapeutics stockholders.”
Last week the publicly traded OPKO announced that the U.S. Food and Drug Administration approved its drug Rayaldee for adults with certain forms of stage 3 or 4 chronic kidney disease and vitamin D deficiency. The “FDA’s approval of Rayaldee represents an important milestone for OPKO. Rayaldee is the first product to receive FDA approval for this important indication and is one of OPKO’s many pharmaceutical products being developed for significant medical problems which will benefit from new treatment options,” Frost said.
OPKO shares have been trading between $7 and $17.50 over the last year. Shares were trading at $9.35 in afternoon trading.
The company recently ranked No. 21 on Forbes’ list of the 100 most innovative growth companies.