Sun Pharma to acquire Insite Vision in US

Sun Pharma is set to acquire InSite Vision Inc, becoming the third Indian drugmaker to execute a major transaction in the US in less than two months.

InSite Vision focuses on developing new specialty ophthalmic products, including three late stage programs, a note from Sun said. And the move will bolster Sun’s ongoing efforts to build a branded ophthalmic business in the US.

The transaction has a total equity value of approximately $48 million on fully diluted basis plus related debt and other transaction costs assuming all shares of InSite Vision are tendered in the offer, Sun said. For the 6 month period ended June 30, 2015, InSite Vision recorded revenues of $ 3.8 million, an EBITDA loss of $ 6.4 million and a net loss of $ 7.5 million. Sun expects tp close the deal by fourth quarter of 2015.

In the last two months, Lupin and Cipla have executed two big-ticket transactions in the US.

The latest acquisition fits into Sun’s ophthalmic business plan, as it had in June in-licensed Xelpros (Latanoprost BAK-free eye drops) from its research company. Along with the InSite acquisition, Sun Pharma will have access to four late stage branded ophthalmic products in the US, it said.

InSite Vision has developed the DuraSite and DuraSite2 drug delivery platforms that are capable of extending the duration of drug retention, thus resulting in lower dosing frequency, and potentially enhanced efficacy, Sun explained.

Product pipeline

Based on this technology, InSite Vision has developed a pipeline of late-stage clinical candidates, and has recently filed a New Drug Application (NDA) with the US FDA for BromSite for the treatment of inflammation and prevention of pain associated with cataract surgery.

It plans to file another NDA in 2017 for DexaSite for the treatment of non-bacterial blepharitis, a common ocular condition for which there is no approved product currently available. It’s AzaSite Plus is currently in Phase-III clinical development for the treatment of eye infections, and ISV-101 is in Phase I-II clinical development for dry-eye disease and inflammation.

InSite Vision also has two commercialised products based on its innovative DuraSite{+ }platform approved for the treatment of bacterial eye infections, AzaSite (azithromycin ophthalmic solution)  and Besivance (besifloxacin ophthalmic suspension), marketed by respective partners.

Sun’s North American business head Kal Sundaram said that the acquisition was  part of its transitioning to a specialty company. Besides dermatology, the company has identified ophthalmics as one of the key segments for a branded presence in the US.

Offer details

Under the terms of the agreement and plan of merger, an indirect wholly owned subsidiary of Sun Pharma will commence a tender offer for all of the issued and outstanding common stock of InSite Vision at a price of $ 35 per share in cash. This is at a 30 per cent premium to the implied price per share under the terminated ‘Amended and Restated Agreement and Plan of Merger’ between InSite Vision and a competing bidder for InSite Vision’s common stock based on the stock price of the competing bidder as of September 11, 2015, Sun said.

The transaction has been approved by the board of directors of the Sun Pharma subsidiary. InSite Vision’s board of directors has also approved the transaction and unanimously recommended that its stockholders tender their shares pursuant to the tender offer.

The acquisition is subject to InSite Vision’s stockholders tendering at least a majority of InSite Vision’s outstanding shares (determined on a fully diluted basis), or, alternatively, InSite Vision stockholders representing a majority of the outstanding shares of InSite Vision’s common stock voting to approve the transaction as required by applicable law, in addition to other customary closing conditions, Sun said.

jyothi.datta@thehindu.co.in