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Durata Therapeutics Stock Soars on News of Buyout

Durata-Therapeutics_ActavisDurata Therapeutics, Inc. (NASDAQ: DRTX) stock climbed 69.45% to $23.52 per share, just below the 52-week range of $8.44 to $24.25 due to a buyout from Actavis PLC (NYSE: ACT).

A definitive merger agreement has been confirmed between Durata and Actavis, involving a subsidiary of Actavis making a tender offer to acquire all outstanding shares of Durata common stock for $23 per share in cash, an approximate $675 million transaction.

The deal is in aggregate and contingent value rights (CVRs) whereby the holder will be entitled to additional cash payments up to $5 per share if specific commercial and regulatory milestones relating to DALVANCE, a lead product of Durata’s, is achieved.

DALVANCE was approved by the US Food and Drug Administration (FDA) in May 2014 and the first drug approved as a Qualified Infectious Disease Product (QIDP). This intravenous antibiotic was developed to treat acute bacterial skin and skin structure infections (ABSSSI) and is dosed just once a week for a period of two weeks. With the addition of injectable DALVANCE, Actavis’ Infectious Disease portfolio will be heightened.

In addition, DALVANCE in a single-dose regimen is in the last stage of development to treat ABSSSI in conjunction with a supplemental New Drug Application (sNDA), with filing anticipated by the summer of 2015. Plans to continue development of DALANCE for other indications to include pediatric osteomyelitis and hospital community-acquired pneumonia are also underway.

For Actavis’ emerging infectious disease franchise, the acquisition is a strong strategic fit. This drug also falls in line with Actavis’ long-term growth based on smart and targeted investments. According to Brent Saunders, President and CEO of Actavis, DALVANCE is an innovative antibiotic that will benefit several areas of healthcare.

He adds that DALVANCE will be a complementary drug to Actavis’ current Teflaro product and ceftazidine-avibactam, which is in the final stage of development. Solid documentation supports DALVANCE as being efficient, safe, and tolerable. The acquisition will put Actavis in a position to provide doctors with novel solutions while at the same time offer hospitals and healthcare systems value in moving treatment of patients in both inpatient and outpatient settings forward.

There are specific perks to the transaction to include holders of CVR receiving $1 per share if approved for ABSSSI in Europe, $1 per share if approved by the FDA, and $3 per share if a net global DALVANCE revenue threshold is met within a set period of time.

Durata Therapeutics, Inc. is a pharmaceutical company that focuses on both development and commercialization of therapeutics specific to patients living with acute illnesses and infectious diseases. Currently, patients in two global Phase III clinical trials are enrolled and dosed with the company’s product candidate, dalbavancin or DALVANCE as the trademark name.

Actavis PLC is a specialty pharmaceutical company that maintains headquarters in Ireland. The company develops, manufactures, and commercializes high quality and cost-efficient generic, as well as branded pharmaceutical products used to treat patients all over the world.

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