Xeris to Snag Bucks County-based Strongbridge Biopharma for $267 Million

On May 24th, Strongbridge Biopharma announced it will be acquired by Xeris Pharmaceuticals for approximately $267 million. The resulting company, Xeris BioPharma Holdings, will have two therapies in the clinic and one awaiting FDA approval. After the announcement, Strongbridge’s stock soared more than 12%, while Xeris’ lost almost 6%. The deal is expected to close early in the fourth quarter of 2021.

Strongbridge Biopharma is a biopharmaceutical company focused on developing therapies for rare diseases. Its main product is KEVEYIS, an inhibitor of the carbonic anhydrase enzyme used to treat primary periodic paralysis. Additionally, their inhibitor of adrenal steroidogenesis, RECORLEV, is currently under review by the FDA to treat endogenous Cushing’s syndrome. Their pipeline also includes the pre-clinical next-generation somatostatin analog, veldoreotide extended-release, for the treatment of acromegaly.

Xeris Pharmaceuticals specializes in novel formulation technologies, which allow their products to last longer at room temperature, extended stability, and reducing volumes. Their proprietary technologies XeriSol and SeriJect aim to make therapies to be easier to use and administered. Their first commercial product is Gvoke, the first autoinjector for very low blood sugar.

Deal Terms

As per the agreement, Xeris will pay approximately $267 million, and Strongbridge shareholders will receive two forms of pay:

• Strongbridge shareholders will receive 0.784 shares of Xeris for every Strongbridge share. The deal prices every Strongbridge share at $2.72, 12.9% higher than its closing cost from the day before.
• Additionally, each Strongbridge will receive one non-tradable contingent value rights (CRV) per Strongbridge stock worth up to $1 based on regulatory and commercial milestones.

After the deal is finalized, current shareholders of Xeris will own approximately 60% of the new company, and Strongbridge shareholders around 40%.

The rationale for this acquisition was summarized in three major points:

• Diversified and increased revenue growth: With this deal, the new company will have two products in the market and one product under FDA review. Additionally, Xeris has expertise with the launch of endocrinology-based therapeutics, which will help with the launch of RECORLEV if approved by the FDA. In turn, this will make the company more attractive to investors.
• Reduction in cost: The new company will save around $50 million by eliminating redundancies in general, administrative, and other costs. Additionally, the use of existing infrastructure for the launch of RECORLEV.
• Increase in specialized development pipeline: The company will have a robust rare disease and endocrinology-focused pipeline with access to scalable and novel delivery methods.
• After the closing Xeris Chairman and CEO, Paul Edick will act as Chairman and Chief Executive Officer of Xeris Biopharma Holdings.

“Strongbridge’s attractive rare disease portfolio and capabilities are highly complementary with Xeris. Building on the continuing prescription growth of Gvoke® with an enhanced and diversified growth profile, expanded and scalable salesforce, and expected cost-synergies, the combined company will be well positioned to deliver compelling long-term value to shareholders. We look forward to welcoming the Strongbridge team to Xeris and leveraging our differentiated portfolios and technologies to help the patients we serve improve their quality of life.”

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Author

Daniel Ojeda