Cynapsus Therapeutics Up 115% on US$624 million Acquisition by Sunovion Pharmaceuticals

Cynapsus Therapeutics Inc. (NASDAQ:CYNA,TSX:CTH) was up +21.30 or 115.99 percent at $39.65 per share as of Thursday 1pm EST, the day after news of Sunovion Pharmaceuticals‘ US$624 million acquisition of the company. At the close of market house on Wednesday, Cynapsus was only at $18.36.
The definitive agreement was announced late Wednesday, August 31st. As stated in the press release, Cynapsus shareholders will be getting US$40.50 per common share in cash, and holders of warrants and stock options will receive a cash payment equal to the difference between US$40.50 and the exercise price of such warrant or stock option. Funded by Sunovion’s cash on hand, the transaction has been approved unanimously by the Board of Directors of both companies, and is expected to close in the fourth quarter of 2016.

The acquisition is hot on the heels of Cynapsus’ announcement that the US Food and Drug Administration granted Fast Track Designation for its Parkinson’s disease drug APL-130277. This Fast Track Designation expedites the review of the drug and provides an opportunity for accelerated approval and/or priority review.
APL-130277 is “a sublingual formulation of apomorphine hydrochloride, or apomorphine. Apomorphine is the only molecule approved for acute, intermittent treatment of OFF episodes for advanced PD patients, but is currently only approved as a subcutaneous injection in the United States.”

Sublingual thin film delivery of apomorphine, image from Cynapsus Therapeutics

Thus far, Cynapsus has completed its Phase 2 clinical trial for APL-130277 and has initiated Phase 3 of its clinical program, with efficacy trial expected in mid-to-late fourth quarter of 2016.
Sunovion Pharmaceuticals is a Massachusetts-based subsidiary of Sumitomo Dainippon Pharma Co., with “an overarching goal to help people with serious medical conditions lead fulfilling lives.”
Sunovion Chairman and Chief Executive Officer Nobuhiko Tamura says that the focus of the acquisition is the Parkinson’s disease drug, stating that, “We believe that APL-130277 is a novel late-stage candidate with the potential to make a real difference for patients and their families.” He adds, “The acquisition of Cynapsus is well-aligned with Sunovion’s focus on the innovative application of science and medicine to help people with serious medical conditions and complements our robust product pipeline.”

Back in mid-August, BMO Capital Markets Corp. analyst Do Kim predicted that Cynapsus’ drug “will redefine the acute therapy market for Parkinson’s.” The drug has the potential to garner sales of $2 billion worldwide, which includes $1.5 billion in the US, according to estimates based on its “ease of administration combined with its milder safety profile” compared with the Parkinson’s treatment Apokyn.
The transaction is set to be completed via a plan of arrangement under the Canada Business Corporations Act.
Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.